Here’s Something Else For Unemployed Law Grads To Worry About

Damocles, Attorney at Law

Damocles, Attorney at Law

A legal ethics specialist with the D.C. Bar, speaking at the Bar’s mandatory ethics course, opined that a lawyer’s student loan debt could create an irresolvable conflict of interest preventing him or her from taking on certain cases, at least while complying with the ethics rules

I never thought about that before, but horrors!…he’s right!

Rule 1.7 (b) (Conflicts of Interest) of D.C.’s Rules of Professional Conduct (as well as every other jurisdiction’s rules, except for California), reads…

 A lawyer shall not represent a client with respect to a matter if:
(4) The lawyer’s professional judgment on behalf of the client will be or reasonably may be adversely affected by the lawyer’s responsibilities to or interests in a third party or the lawyer’s own financial, business, property, or personal interests.

The only way to get past this prohibition is for the lawyer to receive an informed waiver from the client, and for the lawyer to reasonably believe that the personal interest will not adversely affect his or her judgment on behalf of the client. If, however, a lawyer’s student loan debts are sufficiently crushing, I wonder if the latter conclusion is ever credible or reasonable. Wouldn’t such a lawyer desperately want a client in a contingent fee case to accept a generous settlement offer rather than risk getting nothing in trial? Could such a lawyer’s advice regarding whether to accept such an offer be trusted, ever?

The opinion was rendered during a discussion about how a lawyer’s impending bankruptcy or other extreme financial distress created an ethical requirement to disclose as a conflict of interest to a client or potential client, and how such problems could be so inherently biasing for the lawyer that making objective case-related decisions with financial implications for his own status would be impossible. After all, loan debts can’t be discharged with bankruptcy; they are among the worst kinds of debt. The ways such financial obligations could warp judgement in legal matters are many, including pushing a desperate lawyer to accept or pursue dubious long-shot litigation in hopes of a lucky jury verdict that could yield a big fee…all the better to pay that loan off with.

I have my doubts that a bar counsel would be eager to pursue discipline in such a case, but the fact remains that having a huge debt hanging over a lawyer’s head is not conducive to the objectivity and independence that the ethics rules require.

16 thoughts on “Here’s Something Else For Unemployed Law Grads To Worry About

  1. What is the definition of crushing student debt? When i graduated some 33 years ago with $7k of outstanding student debt on a salary of $18k, I fretted on it a year after graduation….. Then just emptied my bank account because I didn’t want that hanging over me…. A year later I bought a house.

    Don’t know where the scales tip for a new grad Lawyer these days, but I’d have to think something in the ~$150k range would not be considered unreasonable, given the salary potential.

    Some graduates exceed that loan amount, and I would question their judgement as a prospective employee, regardless of whatever the bar association thinks.

  2. I am one of that first generation of lawyers who graduated with crushing law school debt. The student body divided into, for the most part, those with loans and those without loans. For those of us with loans, we called this “putting on the golden handcuffs,” because we all tried to go to the law firms that could pay us the most money but we knew we were signing up for long hours and possibly boring work. Those with little or no debt tended to opt for jobs with government, public interest groups, or went to work on the Hill. I didn’t feel the need to disclose my debt to my clients – but I was paid the same regardless if the firm got a big windfall. I don’t know any lawyers with debt that became solo practioners out of law school because it is too risky. Now that my law school debt is gone, do I need to disclose to clients my mortgage obligations or that I am saving for retirement and my kids’ education? Everyone has financial obligations, a good lawyer will never let that get in the way of his/her client obligations.

    • The question isn’t “should lawyers not let debt or other financial obligations cloud their objectivity”, because the answer is obvious. In a perfect world obviously a lawyer with a 10 trillion dollar debt SHOULD not allow that debt to cloud their professional obligations of objectivity.

      The question comes from the other side, from the client side. “Should clients trust a lawyer with such crushing debt that maybe their lawyer cannot perform objectively”. I don’t think potential clients are obligated to make that assumption when it is their future at stake in the outcome of a particular case or litigation.

    • If the standard is what a “good lawyer” should be expected to do, then this would never be an issue at all, or even in the rules. The standard, however, is what it is reasonable to believe. If a lawyer is in tough financial straits–and that’s the issue, not a particular dollar amount—what ever the cause, it creates a 1.7 b conflict. $150,000 could certainly be enough to do that—I hear from lawyers who are flipping burgers and also owe 6 figures of debt. If a big contingent fee case falls into their lap, are they conflicted? Seems like it to me.

      • OTOH, a student who is willing to borrow and invest that much money on their education might be terrifically motivated to exceed expectations, take on more responsibility and be a very reliable employee… Simply because they have significant financial obligations.

        Got caught up in the housing boom of the 1980s and had 4 houses at one point with a crushing amount of mortgage debt.. Only made me work harder and look for OT…LOL

        • *might* is the word that undoes it all. Might comes with an unspoken *might not*.

          No client should assume a lawyer IS above the temptations caused by massive financial burdens.

  3. Sorry. I feel no sympathy for (1) recent law grads who can’t pay their bills; (2) students who go to law school because they can’t figure out what else to do.

    Too many lawyers. Period. And how many now serve in a feckless Congress?

    I know people who have gone to law school. passed several bar exams, and then turned those graduate degrees and bar memberships into something more meaningful than either defending criminals, becoming DAs, or defending corporations.

    Used to be that any graduate degree proved only that one could excel beyond the BA level. Now there is no creativity on the part of law school grads. The law owes you nothing. All you have done is prove that you can suffer through 3 years of awful graduate education; that should be worth more than an associate position at a big law firm… where you work 18 hours a day in hopes of making partner.

    I almost accepted a teaching assistantship at the University of Chicago for a Ph.D. in English literature. Figured out quickly that aside from gazing at my navel over literature (which I really do love and consider an art) all I could do with it was teach. Ugh.

    Grow up, people. You can translate a law or English or psych graduate degree into a thousand different, and far more interesting careers.

    Medical degrees are something else… One might really help people, in addition to making money. I am just sick to death of grad school graduates who think they’re owed something. You make your own future, kiddos.

  4. As a recent law grad who has trouble paying his bills, I take issue with the generality of your comment. While there are admittedly many recent law grads who went to law school for the wrong reasons, there are also enough of us who racked up an impressive amount of debt to receive degrees from quite expensive law schools, only to then got royally screwed by the bottom dropping out of the legal market (and even the quasi-legal market). You seem to think that there are just loads of potential employers waiting in the wings in “more interesting careers,” eager to hire people who they see as having a very focused education (and little practical experience) over others who are younger, more malleable, and above all, who have spent the last three years working in that “more interesting career” instead of being in law school.

    When I was in law school, I did not focus on grade optimization, despite my 1L professor’s advice. I instead chartered an international non-profit law student organization and put my school on the national security law map. When I graduated, I applied to law firms, government agencies, non-profit organizations, and Congress for both legal jobs and policy jobs. The legal jobs passed me over because I did not have a 4.0, giving the jobs to my classmates who had taken relatively straightforward core courses when I was fighting through seminars in “Foreign Relations Law” and “Law and American Intelligence.” The policy jobs passed me over because I had no policy experience. Congress provided a uniquely surreal job-hunting experience. I was told that I was not chosen for a Legislative Assistant position because I had no Hill experience, and when I applied for the next step down (Staff Assistant) to get Hill experience, I was told that they wouldn’t hire me because I was overqualified.

    So I charted my own course, creating my own non-profit law firm and fighting to make a name for myself, all while trying to pay off six-figure loans. I also teach courses when I can, and on the weekends I am a concierge to try and make ends meet. So you’ll understand if I have a problem with your disdain.

    (As for medical degrees, might I point out that the last career you want people going into for money is medicine? I was in medicine before I went to law school, and let me tell you, you really don’t want any of my classmates operating on you who toughed their way through med school for the paycheck instead of leaving like I did because it wasn’t a good fit.)

    • Well, at least you’re trying. My disdain was not directed toward you personally, of course, And you may in fact make your mark on the legal and world community. Law schools cost too much too much, and leave too many young people in debt based on “the big lie” about what a J.D. will mean over the course of the student’s life. I know many many law school graduates who have turned down the life of a law firm — or related jobs — and made something else and good out of their degrees. Having a JD means to many that one can get through a rigorous program successfully, may have taught you to think and analyze better than others, and that that proves something about one’s character.

      Others, because they spent so much money, got good grades, made Law Review, expect the world owes them something. It doesn’t.

      Frankly, I wasn’t going after law school students in general, but about the law schools that convince kids that the law will make them rich, happy, and successful. And really, a law degree can in fact be a credential that means something beyond the practice of the law.

      Good luck to you. At least you have guts.

      Finally, why did you move from medicine to law? Just interested. Yes, there are lawyers and doctors who go into it for the money… but there are ways to check on doctors and lawyers so you don’t get stuck with some inept, unethical lawyer or doctor. Believe me, my internist was checked by me tens ways from Sunday, and he’s great. (Or at least I’ve not been misdiagnosed and am not dead so far…)

      Just because a law school promises you the world, and charges you for that promise, doesn’t mean you should believe it. And I know too many people who went to law school because “it was the thing to do” — only to find out that the law is tremendously over-populated, and absent any ethics, go into politics. Great system.

      Kudos to you for working through your problems as best you can.

      • Second oldest reason in the book (first oldest is of course, “a girl”). Just didn’t like med school. Don’t get me wrong, I’m definitely of a scientific bent, but biology, anatomy, and physiology were never my cup of tea; I’m more of a physics nerd. I went to med school to become a psychiatrist (psych being my second love) and was promptly rendered miserable by the endless slog through not one or two classes in one of my least favorite fields, but a program where all of the classes were in it. Add to that the creativity-crushing teaching philosophy of my particular school, which rewarded compliance and brutally punished anything approaching curiosity or independent thought, and I was soured on the whole thing.

  5. My husband owed $120k coming out of law school, and that was only because his undergraduate degree was paid for with scholarships. He hasn’t been able to find paying legal work, and I don’t make enough to support him while he takes pro bono. With so many experienced lawyers unemployed, no one (NO ONE) will hire one without experience. So he’s working in retail management. The same job I have, with an associate’s. We’re just treading water, hoping for a break.

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