Summary
If you are considering law school, congratulations. Pursuing a degree in law will open new, and interesting, doors. But like all good things, it comes at a cost. The purpose of this article is to break down exactly what those costs are, and to shed some light on the world you are considering joining.
Before diving in, I want to make something clear. I loved law school. I made some of my best friends over those three years. The educational experience was invigorating, and I very much felt qualified to join the ranks of a noble profession. So, this is not an admonishment of law school. Nor is this meant to be a rebuke of the corporate law world which I subsequently joined.
You Should Worry About It
If you haven’t been told already, someone will likely tell you prior to, or during your academic career, not to worry about the cost of law school because the profession is lucrative, and paying back debt will be quick and easy. It may be your financial advisor (as in my experience), your colleagues, your family or your friends. Similarly, once you begin practicing, you will likely be told not to worry about affording that new house, new car, expensive vacation, etc., again because of your high earning potential.
The purpose of this article is to try and force you to worry about it. This is about sharing one person’s experience, layered with the experience of many others with whom I shared the journey, with the hope of giving prospective law students an honest account of what is in store. This article will discuss the costs of law school, your earning potential upon graduation, and the reality of repaying the costs of law school.
The Costs of Law School
The Law School Admissions Council (LSAC) estimated that in 2018-2019, the cost of law school was between $10,000-$20,000 a year, including tuition and living expenses.1 Personally, I was on the upper end of the LSAC’s estimation and three years of law school cost me upwards of $60,000.
Canadian Lawyer Magazine published the cost of law school to be approximately $17,000/year in Canada (excluding Québec) for 2017-2018, and the costs are only rising.2 Because many of us don’t have roughly $20,000/year burning a hole in our pockets, attending law school likely means taking on debt.
A study published by the Law Students Society of Ontario in 2018 estimates that 75% of law students secured a bank line of credit, and after three years, law students have incurred over $83,000 in debt.3 Financial institutions love law students. Some will offer you a line of credit up to $150,000 based on your earning potential after graduation and you will be encouraged to take it.
To make a conservative estimate, let’s assume that each year of law school will require borrowing of $18,000 and your total debt load will be $54,000 at the end of three years.
Earning Potential
Your earning potential right out of law school is high compared to most jobs with minimal work experience. I reached out to friends working as lawyers in large law firms (over 100 lawyers) in the provinces of Alberta, British Columbia, Ontario, and Quebec to determine salary as an articling student (0-1 years out of law school), first year associate (1-2 years out of law school) and as a second year associate (between 2-3 years out of law school). Here are the numbers:
| Alberta | Before Tax | Annual After Tax (AT) | Monthly AT | Bi-Weekly Salary |
| Articling Student | $65,000 | $49,146 | $4,095.50 | $2,048 |
| 1st Year | $82,500 | $61,309 | $5,109.08 | $2,555 |
| 2nd Year | $105,000 | $76,518 | $6,376.50 | $3,188 |
| British Columbia | Before Tax | Annual After Tax (AT) | Monthly AT | Bi-Weekly Salary |
| Articling Student | $65,000 | $50,179 | $4,181.58 | $2,091 |
| 1st Year | $103,000 | $76,477 | $6,373.08 | $3,187 |
| 2nd Year | $116,000 | $84,499 | $7,041.58 | $3,521 |
| Ontario | Before Tax | Annual After Tax (AT) | Monthly AT | Bi-Weekly Salary |
| Articling Student | $95,000 | $69,915 | $5,826.25 | $2,913 |
| 1st Year | $110,000 | $78,526 | $6,543.83 | $3,272 |
| 2nd Year | $110,000 | $78,526 | $6,543.83 | $3,272 |
| Quebec | Before Tax | Annual After Tax (AT) | Monthly AT | Bi-Weekly Salary |
| Articling Student | $78,000 | $54,030 | $4,502.50 | $2,251 |
| 1st Year | $106,000 | $70,561 | $5,880.08 | $2,940 |
| 2nd Year | $114,000 | $74,337 | $6,194.75 | $3,097 |
These are on the higher end of what you can expect graduating from law school if you go to work for a large corporate law firm. If you are like me, your eyes might immediately be drawn to the 2nd year salary line and think “hey, that’s not so bad” and you’d be like many others. But let’s take stock of where we are.
So…. What’s the Problem?
First, these are some of the highest paying jobs available to law school graduates. Not everyone is interested in being a corporate lawyer, fewer people secure these positions despite being interested, and even fewer stay beyond three years. So, it is likely that you will be earning less than what is set out above immediately after graduating.
Second, let’s take a deeper look at paying back your legal education. To make this simple, I have averaged out the monthly after-tax salaries of each year:
| Average Monthly Salary | |
| Year 1 | $4,651.46 |
| Year 2 | $5,976.52 |
| Year 3 | $6,539.17 |
Taking the average here, an articling student can expect to earn a monthly after-tax salary of $4,651.46. First year lawyer earns on average $5,976.52 and a second year lawyer $6,539.17.
Repayment
Here is where we can discuss the repayment of the $54,000 in debt. For simplicity, let’s assume the interest rate on your debt is 2.45% (prime interest rate)4 plus 1.00%, and you don’t start accruing interest until the start of year 1. Additionally, let’s assume you choose an aggressive repayment schedule and dedicate 20% of your after-tax salary to paying off your debt.
Where does this leave us? If you dedicate 20% of your salary, have rock bottom interest rates, and secure one of the highest paying jobs after law school, it will take you 5 years and 2 months to pay off your debt:
| Year 1 | Month 1 | Month 2 | Month 3 | |
| Principal | $54,000 | $53,247.46 | $52,492.44 | |
| Interest | $177.75 | $175.27 | $172.79 | |
| Payment (20%) | $930.29 | $930.29 | $930.29 | |
| $53,247.46 | $52,492.44 | $51,734.94 | ||
| Year 5 | Month 1 | Month 2 | ||
| Principal | $2,021 | $719.69 | ||
| Interest | $6.65 | $2.37 | ||
| Payment (20%) | $1,307.83 | $1,307.83 | ||
| $719.69 | ($585.77) |
For the purpose of the above analysis, salary is frozen at year 3 levels onwards.
If you have other financial commitments and can only afford to put 15% of your salary towards repaying your debt, then your timeline for repayment is 6 years and 7 months. At 10% of your salary the timeline is extended to 9 years and 6 months.
Below is a summary of time, and how much interest you will pay over the 20%, 15%, and 10% repayment schedules:
| Total Interest | Time | |
| 20% | $4,916.02 | 5 years, 2 months |
| 15% | $6,547.18 | 6 years, 7 months |
| 10% | $10,143.81 | 9 years, 6 months |
Conclusion
Law school remains a commitment long after you have graduated. While it’s true that becoming a lawyer tends to raise the floor of your salary for the rest of your career, there are significant costs to becoming a lawyer.
As mentioned at the beginning of this article, the purpose here is not to dissuade anyone from pursuing a career in law, but to force you to consider the long-term costs of the decision. In other words, worry about the costs of law school upfront and you could be saving yourself thousands of dollars down the road.
1 https://www.lsac.org/choosing-law-school/find-law-school/canadian-law-schools#:~:text=Paying%20for%20your%20Legal%20Education&text=Tuition%20costs%20at%20Canadian%20law,to%20%2420%2C000%20per%20academic%20year.
2 https://www.canadianlawyermag.com/resources/legal-education/the-debt-burden/275350
3 https://s3.amazonaws.com/tld-documents.llnassets.com/0010000/10102/law%20students’%20society%20of%20ontario%20-%20just%20or%20bust%20report.pdf, page 5)
4 https://www.bankofcanada.ca/rates/daily-digest/
