Debt and Access to the Legal Profession

Today is the payment deadline for the $3,164 fee levied by the Law Society of Upper Canada to fund its controversial new Law Practice Program, an alternate pathway to licensing for those unable or unwilling to secure articles. Regular readers of Slaw will recall that when the fee was announced in February, law students rallied against it – a petition calling for a more just and equitable model of funding the experimental program garnered more than 800 signatures.

While a few sympathetic benchers spoke up at Convocation in favour of the petition, the Law Society took no action. The chair of its professional competence & development committee, Janet Minor – since elected Treasurer of the LSUC – wrote licensee candidates a letter, promising that the fee would be re-evaluated in the next budget cycle and directing the students toward monthly payment schemes and loans.

Treasurer Minor’s message is depressingly familiar for those of us who oppose the high fees that act as access barriers to the profession – including bar fees, astronomical law school tuition, and now the LPP fee. The response to our lobbying efforts is always the same: If you can’t afford it, go into debt.

The controversy over the LPP fee has highlighted the Ontario bar’s increasing reliance on debt as a mechanism for providing the next generation of lawyers access to membership in the legal profession. This reliance has tremendous negative effects for law students, recent graduates, and the public in need of legal services. It is high time that the legal profession demonstrated some leadership and addressed the problem.

Only the very wealthy can afford to graduate from law school debt free. At the low end, law tuition in Ontario is more than $15,000 per year – and at the high end, more than $30,000. A study commissioned by Ontario’s law deans found that in 2004, 40% of law students graduated with personal debt of more than $40,000; a third of those expected to graduate more than $70,000 in debt. In the ten years since that study, law tuition in Ontario has increased 150-200%. It is a safe bet that debt levels have increased at the same rate.

For law students, tremendous personal debt means curbing our career expectations and tailoring our conduct to the expectations of a conservative hypothetical employer. A friend told me last year that while she would have preferred to apply to Legal Aid or a community clinic, she felt forced by her debt to apply to full-service corporate/commercial firms. The Deans’ report found that my friend isn’t alone: 1 in 3 second year law students reported that their debt had a substantial impact on their articling and practising decisions. The report states that many of these students “felt obliged to seek out high-paying positions rather than those in public service or smaller communities.” In fact, for these students, “the area of law in which they hoped to practise was the aspect of their academic and personal lives they believed was most affected by their debt.”

There is nothing wrong with wanting to work in national, full-service firms or to practise corporate/commercial law. But law students should not feel coerced to practise in those fields of law for fear of not otherwise being able to pay back a mountain of personal debt – particularly when there is a pressing need for low-cost legal services in criminal, family and civil law in Ontario.

For graduates, the high debt levels required to provide access to the legal profession exacerbate existing gender and race inequality. The simple, unjust truth is that wage discrimination is alive and well in the Ontario bar. A 2010 study sponsored by the LSUC found that white male lawyers started their careers with a $4,000-$8,000 lead in average annual salary over racialised persons and women in the profession. And that lead only widens with age – by 35, white male lawyers made, on average, $50,000 more per year than lawyers of colour.

Differences in income mean differences in the rate at which loans can be repaid. Those making more will pay back their loans more quickly, accruing nominal interest; those making less will take longer, and will likely pay tens of thousands of dollars in interest alone. By relying on debt to finance access to membership in the legal profession, we effectively give the rich and privileged a discount on becoming lawyers.

Finally, the public is adversely affected by the impact of debt on law students and graduates. Licensee candidates will be attracted to articling and associate positions with corporate/commercial firms in large urban centres, where in addition to a very attractive salary, they can expect to have the LPP fee, bar fees, and even tuition in some cases subsidized or paid in full. Smaller firms in smaller cities and community clinics – those doing most to fulfill the profession’s mandate for providing access to justice – cannot offer the benefit of such subsidies. Recent law graduates cannot focus on providing affordable legal services when their degree comes with six figures of debt.

Faced with increasing costs, law schools and professional regulators have succumbed to the temptation to shift the burden of paying to the next generation of lawyers. They deal with the associated access barriers by facilitating and promoting government loans and personal lines of credit. But easy solutions are rarely the best – our heavy reliance on debt to provide access to membership in the legal profession has a significant adverse impact on students, graduates and the public at large.

So what can we do about it? The LPP fee is perhaps the easiest to address. The Law Society could increase licensing fees to lawyers by about $100 and do away with the fee almost entirely. If you are a bencher, bring it up at the next meeting of the Convocation; if you are a lawyer, reach out to benchers with whom you have connections and encourage them to establish a more equitable means of financing access to the legal profession.

Law tuition fees pose a more difficult problem. The profession is not responsible for setting these fees; that task falls to each individual university’s Board of Governors, which sets it budget in the context of woefully inadequate post-secondary funding. To reduce law school tuition would require Boards of Governors willing to demonstrate leadership, government willing to invest, and lawyers ready to pay their proportionate share in higher taxes.

Lawyers can help by writing to their colleagues and contacts within government and university administration, encouraging them to take action. Boards of Governors should be encouraged to freeze tuition immediately and to demand sufficient investment from government to allow fees to be gradually reduced and eliminated. Government should be shown that there is political will for higher proportional taxation to fund that sort of investment. Ours is one of the wealthiest professions in the country – we must show government that we are willing to pay our fair share so that we can secure the future of the next generation of lawyers.

The profession isn’t powerless to act in this sphere, either. As professional regulator and accrediting body, the Law Society can demand that law schools develop a plan to reduce tuition fees in order to maintain accreditation. They no doubt have significant sway in the offices of government: adding their voice to the chorus calling for action on law tuition would go a long way.

Our profession’s reliance on debt to finance access for future members is heavily entrenched, at least in Ontario. Setting things right will take a lot of hard work. But set things right we must, if we care about the well-being of law students, income equality amongst law graduates, and access to legal services for the public. I am confident that we do, and that we will rise to the challenge.

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You can follow Chris Rudnicki on twitter @rudniculous

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Comments

  1. As Chair of the Law Society of Alberta’s Access to Justice Committee – I commend this blog and have commented here on a few occasions – and I think you raise some interesting points – however – my concern with your comments, candidly, is similar to many of my concerns with Access to Justice. Namely, that the burden of fixing the problems of 35 million people is sought to be placed upon perhaps 60,000 lawyers.

    Now – consider beyond that basic statistic, the primary areas of A2J need are being felt by only a fraction of those 60,000 lawyers – namely, lawyers practicing poverty law, criminal law, and family law – among the lowest paid areas of practice.

    So.

    Then.

    Imagine you are a criminal lawyer or family lawyer doing a fair bit of pro-bono and/or legal aid work, earning income at levels far below those of your former classmates in large downtown Toronto, Calgary and Vancouver firms – and the suggestion is that to reduce the burden on lawyers seeking to come into practice, you “ONLY” need to pay an additional $100.00.

    You see the problem.

    Because the same articling student who graduates with a boatload of debt, will be a practicing lawyer in a year, and then THEY will be saddled with that “minor” financial burden.. in addition to every other increasing cost of doing business.

    Personally I think that the time has come for the Canadian public to focus a little more on the economics of a grossly expanding expectation of government regulation of our actions, and a dropping capacity on the part of the public to understand and interact with that regulation without a lawyer, followed by a diminished capacity to pay those lawyers (See the NSRLP – http://representingyourselfcanada.com/)

    So – while I think the point is very valid – particularly your comment regarding impact of the costs of legal education on diversity, its impact on lawyers in smaller communities, and upon lawyers in practice areas of more modest income (see, again, poverty, criminal and family law) – I think it is, perhaps, dangerous to “eat our own” in an effort to solve the problem.

    At the core, perhaps – is a need for an improved dialogue with government and the public about the very real business case to be made for improved access to legal assistance – which, in part, would include reducing barriers to becoming a lawyer.

    Anyway.

    Just some of my meandering thoughts on the subject from a Bencher who has worked the pavement in family law for some 28 years.

  2. There are two separate issues here.

    Does high tuition result in people rejecting “poverty law” or “community law” jobs in favour of “full-service corporate/commercial”? This is a claim that is commonly made, but of debatable varacity for a number of reasons.

    First, the reality is that the nature of the legal profession is that there aren’t a lot of jobs for young lawyers and new calls in legal aid clinics, non-profits, etc. People start their career in corporate/commercial firms because (i) that’s where most of the legal work is (something like 80% of the bar are solicitors), and (ii) they have the resources to hire and train someone who knows diddly-squat about the practice of law (i.e., most law school graduates). In contrast, a legal aid clinic or non-profit often can’t afford to train a new call or need someone who already knows the ropes (which is why they tend to hire more established lawyers). That’s not a funciton of high tuition, so much as lot funding for those sorts of jobs (indeed, if the goal is to promote “community law” type jobs, surely subsidizing a bunch of corporate lawyers by reducing tuition is a less efficient response, than subsidizing those particular types of jobs (or the people who take them) with increased grants, debt forgiveness, etc.)

    Second, I’m always skeptical of people who claim that they “felt forced by [their] debt to apply to full-service corporate/commercial firms”, because they’re inherently self serving. I mean, realistically, these are people who are “forced” to accept higher paying jobs, which often provide better training (not universally true, admitedly) and open the doors to better opportunities down the road. Moreover, because the alternatives either (i) don’t exist (see above), (ii) or are hard to find (it’s a lot less work to get hired on Bay Street than by a sole practitioner in Wawa), they’re jobs that most people would naturally tend to take. Every time I hear this claim, I find myself wondering, if this person had no student debts, would they REALLY be willing to give up the 6-figure starting salary for the life of a sole practitioner/poverty law practitioner? If they are honest with themselves, I think the answer is usually “no”.

    The problem with access to justice has nothing to do with tuition, it has to do with the reality that most lawyers are smart, high-achieving people who, quite reasonably, aren’t willing to work for an hourly rate that Joe and Jill Q. Public can afford. I mean, let’s be honest, how many middle-class Ontarians can readily afford to pay the legal aid tariff rate for a meaningful criminal trial or a contested divorce? Most lawyers, if they weren’t lawyers, could find other, well-paying and rewarding jobs. That imposes a floor on what they’re willing to accept as compensation for being lawyers. Tuition fees are neither here nor there, because even in the absence of loan repayment obligations (and some schools, like UofT, for example, have fairly generous loan repayment programs), there aren’t too many lawyers willing to practice “poverty law” if it means that they have to live in relative poverty. The solution, if there is one, is either to (i) provide greater public subsidies for legal aid/community clinics to serve a broader range of Ontarians or (ii) change the regulatory environment to allow for the cheaper provision of “routine” legal services by paralegals (this latter approach, I suspect, would go over like a lead balloon amongst my fellow lawyers).

    All that being said, I think students have a fair beef about both law school tuition fees and, especially, the LPP fee. With respect to tuition fees, I think it’s fair for students to ask if they’re really getting what they’re paying for. UofT’s tuition has double since I went there, has the quality of the program improved? Questionable. If I were advising a student today, I’d tell them to go to Queens or Western. The reality is that the education is the same, if UofT does better at placing its students, its because it only accepts the top students. If you can get into UofT, you’ll do fine at any other school. It’ll take a while, but eventually students will figure that out (not for nothing, but in the US, where tuition fees are exgregious and bear little relation to the quality of education, weaker schools are having to cut tuition fees, or indeed, shut down programs, as would-be students have figured out that the degree isn’t worth what they’re being asked to pay for. There’s a solution to high tuition fees, don’t pay them.

    As for the LPP fee, well, that was a disgraceful peformance by the LSUC. The benchers are shameless, but forcing articling students to pay for the LPP program was a profound failure of leadership on the part of the LSUC. I had a long-winded rant on that subject back when their decision was announced (http://ifiwantedyouropinion.com/2014/02/11/ontario-law-society-sticks-it-to-law-students-im-embarassed-to-be-a-member/). The only two principled ways of dealing with the LPP program was to either (i) make LPP participants pay for their own program (they get the benefit of it, they should have to bear the cost), or (ii) make all lawyers pay for the program (we have an obligation to the future of the profession, we should bear the cost). True to form, the law society chose the most cowardly possible result by shifting the cost of the program to people who (i) get no benefit from it, (ii) can least afford to pay for and (iii) get absolutely no say in who should pay for it. This is the sort of unprincipled decision making you come to expect from the LSUC.

  3. To echo the last comment, I graduated with a large debt (undergrad, JD, LL.M.). It then took me 8 months to find an articling position, at a public interest clinic in a smaller market. Having moved back to Toronto for call I’ve been looking for a position since the fall, and while my LSUC fees are less than those of a practicing lawyer they’re not zero. I’m sorry that some students feel pressure to take relatively high jobs, but I’m a lot closer to the cited 35 than 25 and I know I’m not alone in my predicament. $100 is not insignificant.

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