Present value comparison: Law vs Medicine (excel sheet)

[randombetch]

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I wanted to compare the amount of money one could make as a lawyer vs as a doctor, but most comparisons I see don't take into account the interest rate (making $1 now is much better than making $1 10 years from now).

I made some assumptions:

• T14 law school graduate, managed to get a job at a large law firm in 2013 that gave a starting salary of 170k
• 6 year residency+fellowship, starting salary in present dollars is $230k (I was thinking of an oncologist working in private practice)
• The lawyer and doctor have salary increases of the same %

I think these are reasonable assumptions.

"Law" means lawyer salary
"LSum" means sum of all salary so far
"PV Law" means the present value of that lawyer's salary, taking into account an interest rate (which you can change if you want)
"PV Lsum" means the present value of that lawyer's total income
And medicine has the same analogous columns.

You'll notice that at the end of 28 years, the hypothetical oncologist is making $908k a year. That might appear totally ridiculous at first, but you have to consider inflation. $908k 28 years from now is actually only $397k today (3% inflation, you can adjust this if you want in the excel sheet to change the starting salary of the oncologist - I assumed a fixed $170k starting salary for new lawyers 3 years from now). I would argue, looking at salary compensation surveys, that $397k today for a private practice oncologist with 24 years of experience is not unreasonable.

My conclusion is that lawyers in top law firms actually don't make that much more than private practice oncologists do. I was expecting lawyers to be making much, much more.

Tell me what you guys think!

 

[thamsenman]

I wanted to compare the amount of money one could make as a lawyer vs as a doctor, but most comparisons I see don't take into account the interest rate (making $1 now is much better than making $1 10 years from now).

I made some assumptions:

• T14 law school graduate, managed to get a job at a large law firm in 2013 that gave a starting salary of 170k
• 6 year residency+fellowship, starting salary in present dollars is $230k (I was thinking of an oncologist working in private practice)
• The lawyer and doctor have salary increases of the same %

I think these are reasonable assumptions.

"Law" means lawyer salary
"LSum" means sum of all salary so far
"PV Law" means the present value of that lawyer's salary, taking into account an interest rate (which you can change if you want)
"PV Lsum" means the present value of that lawyer's total income
And medicine has the same analogous columns.

You'll notice that at the end of 28 years, the hypothetical oncologist is making $908k a year. That might appear totally ridiculous at first, but you have to consider inflation. $908k 28 years from now is actually only $397k today (3% inflation, you can adjust this if you want in the excel sheet to change the starting salary of the oncologist - I assumed a fixed $170k starting salary for new lawyers 3 years from now). I would argue, looking at salary compensation surveys, that $397k today for a private practice oncologist with 24 years of experience is not unreasonable.

My conclusion is that lawyers in top law firms actually don't make that much more than private practice oncologists do. I was expecting lawyers to be making much, much more.

Tell me what you guys think!

As in all things in economics or finance, the problems lie in the assumptions. I have a friend this year at Stanford Law School who went on 31 job interviews and could not land a big firm job anywhere. So now he's thinking about public interest law (with its ~40-50k salary) and is leaving Stanford with no chance to make 100k+ and crushing debt (180k+)....

 

[the duck]

As in all things in economics or finance, the problems lie in the assumptions. I have a friend this year at Stanford Law School who went on 31 job interviews and could not land a big firm job anywhere. So now he's thinking about public interest law (with its ~40-50k salary) and is leaving Stanford with no chance to make 100k+ and crushing debt (180k+)....

Agreed. Your statistics assume the best possible outcome for a lawyer, going to the best possible schools. The vast majority of lawyers (my dad for example) make no where near that amount. For this to be accurate, you would have to compare your "lawyer" salaries to that of doing spinal ortho/nuro surge, or whatever the highest paying speciality is.

 

[ChiDO]

Agreed. Your statistics assume the best possible outcome for a lawyer, going to the best possible schools. The vast majority of lawyers (my dad for example) make no where near that amount. For this to be accurate, you would have to compare your "lawyer" salaries to that of doing spinal ortho/nuro surge, or whatever the highest paying speciality is.

Agreed, making close to $200k as a lawyer is probably the equivalent of making $500k as a doctor after residency.

OR

Compare the $250k doctor with a $100k lawyer (if not less).

Also, the amount of debt you consider to begin with is laughable. Only $40k/year...I'm pretty sure over half of the medical schools have tuition that is over $40k/year, and that is not even considering CoA. Also need to add in compounding interest on those loans during residency. (I'd say $60k/year for medical school with additional $100k of interest during residency).

Another thing, I think I'm reading it correctly, but you are saying that you'll be making $74k by the last year of residency? I'm pretty sure you'll start at ~$50k and end at like ~$56k by your 5th year (resident salary goes up by like $1k each year).
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I changed the numbers in your chart and put in $500k for the doctor, year 13 the doctor passes the lawyer, and by the end is $2mil ahead.

If you put in $100k for the lawyer, the doctor passes the lawyer at year 15, and is only ahead by less then $1mil at the end.

 

[randombetch]

For top 14 law school graduates, it's not that difficult to get a job at a large law firm. I made this chart for myself, and 60-70% of law school applicants get into a top 10 law school from my undergrad. Considering I'm in the top 20% at my school, I'm very confident I would get into a top 14 law school if I choose to apply. And most top 14 law school graduates end up working for large law firms.

Maybe this year it was harder than usual, but that's not usually the case - and it certainly won't be the case 5 years from now when I would be looking for a job.

If you look at a place like Columbia:
http://www.ilrg.com/rankings/law/view.php/21

Historically, 99% have graduated with job offers.

 

[cardiology88]

Law is no where near as good of a career as it used to be back in the day. You can say the same for medicine but at least we have guaranteed employment at a reasonable salary. If you really want to compare earning powers compare medicine to public accounting or finance, then you will see how behind medicine actually is.

 

[thamsenman]

For top 14 law school graduates, it's not that difficult to get a job at a large law firm. I made this chart for myself, and 60-70% of law school applicants get into a top 10 law school from my undergrad.

Maybe this year it was harder than usual, but that's not usually the case.

If you look at a place like Columbia:
http://www.ilrg.com/rankings/law/view.php/21

Historically, 99% have graduated with job offers.

Well, I can tell you plenty of people this year that would argue with you. This year has been devastating.

 

[randombetch]

Well, I can tell you plenty of people this year that would argue with you. This year has been devastating.

Why would they argue with me when I'm agreeing that this year was much harder than most other years?

 

[ChiDO]

For top 14 law school graduates, it's not that difficult to get a job at a large law firm. I made this chart for myself, and 60-70% of law school applicants get into a top 10 law school from my undergrad. Considering I'm in the top 20% at my school, I'm very confident I would get into a top 14 law school if I choose to apply. And most top 14 law school graduates end up working for large law firms.

Maybe this year it was harder than usual, but that's not usually the case - and it certainly won't be the case 5 years from now when I would be looking for a job.

If you look at a place like Columbia:
http://www.ilrg.com/rankings/law/view.php/21

Historically, 99% have graduated with job offers.

The link you provided shows law students who go into the private sector at $145k avg (a lot less then your $175k in your excel). Also, the public laywers are only at 55k; it would be nice if they also had a %% of students who went into public vs. private.

I have a bunch of college friends who are graduating law school this year or have already done so. One of my good friends, he is working at a big law firm in NY making $150k/year. Once the economy hit the ****ter, they told him he can either take a pay cut of $100k or be laid off...he took the pay cut and is now making $50k/year. As for those who are graduating, a lot of them are struggling to get offers from their interships from the previous years and all of the offers are under $100k thus far.

 

[thamsenman]

Why would they argue with me when I'm agreeing that this year was much harder than most other years?

History tells you nothing about future movements in the legal market or in the economics of medicine.

 

[randombetch]

The link you provided shows law students who go into the private sector at $145k avg (a lot less then your $175k in your excel). Also, the public laywers are only at 55k; it would be nice if they also had a %% of students who went into public vs. private.

That was in 2006. For 2008, the median starting salary for a lawyer in a large law firm was $160k.

http://www.law.columbia.edu/careers/career_services/admitted

And 99% had a job at graduation. 82% of those went to work at a law firm.

I have a bunch of college friends who are graduating law school this year or have already done so. One of my good friends, he is working at a big law firm in NY making $150k/year. Once the economy hit the ****ter, they told him he can either take a pay cut of $100k or be laid off...he took the pay cut and is now making $50k/year. As for those who are graduating, a lot of them are struggling to get offers from their interships from the previous years and all of the offers are under $100k thus far.

Wow, that sucks. Which law schools did they graduate from? T14 ones?

 

[randombetch]

History tells you nothing about future movements in the legal market or in the economics of medicine.

No, but it tells you what you can expect.

http://en.wikipedia.org/wiki/Expected_value

 

[thamsenman]

No, but it tells you what you can expect.

http://en.wikipedia.org/wiki/Expected_value

Provided nothing changes or things change reliably or predictably, which I don't think is probable with these two fields particularly.

 

[randombetch]

Provided nothing changes or things change reliably or predictably, which I don't think is probable with these two fields particularly.

Well, I think they'll change quite predictably. In the long run, salaries will have to go up because there's no way demand for lawyers or doctors is going to drop dramatically in the long run. Supply of good lawyers and good doctors will remain quite stable as well.

I predict that by 2015, if our economy is back on track and unemployment is <6%, then new lawyers at top law firms will get a starting salary of around $170k.

I predict that over the next 30 years, salaries in medicine will rise as fast as salaries in other fields because I don't think Americans will be willing to decrease the quality of doctors in exchange for cheaper doctor salaries.

 

[Tutmos]

$170k average starting salary for a new law school graduate? Are you insane? Does the person also have a science based PhD? Maybe you meant those related to partners in large firms?

For top 14 law school graduates, it's not that difficult to get a job at a large law firm. I made this chart for myself, and 60-70% of law school applicants get into a top 10 law school from my undergrad. Considering I'm in the top 20% at my school, I'm very confident I would get into a top 14 law school if I choose to apply. And most top 14 law school graduates end up working for large law firms.

Maybe this year it was harder than usual, but that's not usually the case - and it certainly won't be the case 5 years from now when I would be looking for a job.

If you look at a place like Columbia:
http://www.ilrg.com/rankings/law/view.php/21

Historically, 99% have graduated with job offers.

 

[randombetch]

$170k average starting salary for a new law school graduate? Are you insane? Does the person also have a science based PhD? Maybe you meant those related to partners in large firms?

$160k is the starting salary now at large law firms, you think that's not going to go up in 3-5 years? Are you dumb?

There are partners in large law firms that charge $1000/hr, and half of it goes directly into their wallets. I remember reading that the average salary for a partner in a large law firm is around $500k.

 

[Drrrrrr. Celty]

Hmm... I'd say dont go into law unless you've got connections. Once upon a time i also liked law.. and wanted to go into it... However i once i realized law is completely saturated with lawyers and the reality that the career is not that useful.

Anyway as i say.. I'm doing medicine because incase of the Apocalypse i got a skill that makes my life slightly valuable.

 

[JaggerPlate]

It's my understanding that law is rough right now. Too many schools, not enough positions. I've heard stories of people really searching for work, coming out of non T-14 and making mid 5 figures, not ever making partner, etc. This really isn't the same story for medicine. Even if you graduate from a lower ranked (whatever) med school and go in a PCP residency, you're still essentially guaranteed a six figure salary (unless you do some academic thing).

 

[randombetch]

It's my understanding that law is rough right now. Too many schools, not enough positions. I've heard stories of people really searching for work, coming out of non T-14 and making mid 5 figures, not ever making partner, etc. This really isn't the same story for medicine. Even if you graduate from a lower ranked (whatever) med school and go in a PCP residency, you're still essentially guaranteed a six figure salary (unless you do some academic thing).

Definitely agree with you there. That's why I had to state the assumptions that this person is smart enough to graduate from a T14 law school and good enough to get a job in a top law firm.

 

[randombetch]

Agreed. Your statistics assume the best possible outcome for a lawyer, going to the best possible schools. The vast majority of lawyers (my dad for example) make no where near that amount. For this to be accurate, you would have to compare your "lawyer" salaries to that of doing spinal ortho/nuro surge, or whatever the highest paying speciality is.

You make a valid point, but I chose oncology because I made the chart for myself and that's the specialty I'm currently most interested in.

 

[thamsenman]

Well, I think they'll change quite predictably. In the long run, salaries will have to go up because there's no way demand for lawyers or doctors is going to drop dramatically in the long run. Supply of good lawyers and good doctors will remain quite stable as well.

I predict that by 2015, if our economy is back on track and unemployment is <6%, then new lawyers at top law firms will get a starting salary of around $170k.

I predict that over the next 30 years, salaries in medicine will rise as fast as salaries in other fields because I don't think Americans will be willing to decrease the quality of doctors in exchange for cheaper doctor salaries.

What about a thriving economy requires lawyers making money? or a lucrative law field in general?

Let's wait until this health-care discussion and political debate is over, before we start prognosticating about physician salaries. There are plenty of ways to deliver care and advice without doctors (sorry to say it). NPs, PAs, nurses, etc.

 

[Drrrrrr. Celty]

What about a thriving economy requires lawyers making money? or a lucrative law field in general?

Let's wait until this health-care discussion and political debate is over, before we start prognosticating about physician salaries. There are plenty of ways to deliver care and advice without doctors (sorry to say it). NPs, PAs, nurses, etc.

Tell a nurse to work 60 hours a week and preform intensive surgery on a person. Yah.. would you also like to have a nurse do that surgery on you?

 

[thamsenman]

Tell a nurse to work 60 hours a week and preform intensive surgery on a person. Yah.. would you also like to have a nurse do that surgery on you?

That's not the point. It's that there's less of a necessary role for doctors now than there's ever been. Obviously, in some high skill areas doctors will remain in demand.

 

[randombetch]

What about a thriving economy requires lawyers making money? or a lucrative law field in general?

Let's wait until this health-care discussion and political debate is over, before we start prognosticating about physician salaries. There are plenty of ways to deliver care and advice without doctors (sorry to say it). NPs, PAs, nurses, etc.

http://en.wikipedia.org/wiki/Coase_theorem

If it were more economically efficient for NPs, PAs, and nurses to be delivering the same types of health care doctors deliver, then they would be doing so.

A thriving economy means aggregate demand is up, and since legal services is a normal good, demand for lawyers would be up. Increase in demand with a stationary supply of good lawyers --> increased wages for lawyers.

(I'm an econ major btw)

I can debate economics with people who know nothing about economics all day, but I think I'm going to go study now before going drinking. Talk to you all later! Glad I was able to spark some discussion with the excel sheet.

 

[Tutmos]

$160k is the starting salary now at large law firms, you think that's not going to go up in 3-5 years? Are you dumb?

There are partners in large law firms that charge $1000/hr, and half of it goes directly into their wallets. I remember reading that the average salary for a partner in a large law firm is around $500k.

In case you hadn't noticed the economy changed a little bit in the last couple of years. A bad economy can mean no activity for entire departments of large firms and wiping out small ones. Businesses tighten their belts and sit on plans for things that require lawyers in times like this.

 

[thamsenman]

http://en.wikipedia.org/wiki/Coase_theorem

If it were more economically efficient for NPs, PAs, and nurses to be delivering the same types of health care doctors deliver, then they would be doing so.

A thriving economy means aggregate demand is up, and since legal services is a normal good, demand for lawyers would be up. Increase in demand with a stationary supply of good lawyers --> increased wages for lawyers.

(I'm an econ major btw)



I can debate economics with people who know nothing about economics all day, but I think I'm going to go study now before going drinking. Talk to you all later! Glad I was able to spark some discussion with the excel sheet.

the coase theorem breaks down in accounting for externalities in markets when 1) transaction costs are high and 2) market participants are irrational.

Both of those things are definetly true in medicine.

 

[ChiDO]

Wow, that sucks. Which law schools did they graduate from? T14 ones?

My friend in NY went to Harvard Law (05 grad). But a bunch of my friends who are having trouble now are from all over: UofChicago, UofIllinois, and Colorado.

(I looked up the rankings, so only one goes to a top 14 (UofChicago @6) school, but I'd say UofIllinois at 23 and Colorado at 45 is not too shabby)

 

[roseglass6370]

Um, not to be "that guy" (...girl, whatever), but how is this thread relevant to anything?

 

[RogueUnicorn]

Um, not to be "that guy" (...girl, whatever), but how is this thread relevant to anything?

my thoughts exactly... but maybe op was trying to provide a tool for people to compare prospective earning power differences between careers they're considering... which i suppose is valid if one is genuinely torn between med and something else.

 

[thesituationPhD]

"I predict that by 2015, if our economy is back on track and unemployment is <6%, then new lawyers at top law firms will get a starting salary of around $170k.

I predict that over the next 30 years, salaries in medicine will rise as fast as salaries in other fields because I don't think Americans will be willing to decrease the quality of doctors in exchange for cheaper doctor salaries. "

how do you make these predictions?
you don't. you haven't got a clue, you're a pre med

this topic is almost as bad as that kid who said he could save all of his wages as a PA.

Good try.

 

[Ag2007]

I wanted to compare the amount of money one could make as a lawyer vs as a doctor, but most comparisons I see don't take into account the interest rate (making $1 now is much better than making $1 10 years from now).

I made some assumptions:

• T14 law school graduate, managed to get a job at a large law firm in 2013 that gave a starting salary of 170k
• 6 year residency+fellowship, starting salary in present dollars is $230k (I was thinking of an oncologist working in private practice)
• The lawyer and doctor have salary increases of the same %

Even before the recession hit, I had heavy doubts about the law profession as a whole because quite frankly, there are too many law schools. You never read about a nation wide shortage of attorneys like you do about a nationwide shortage of healthcare professionals.

Also, as others have mentioned, I doubt you'll find many top tier law school graduates graduating into that kind of money. Family Law use to always be the fallback job in tough times for attorneys. However, for $29.95 plus tax at Office Depot, you can get any number of legal programs that help you write your will, get a divorce, incorporate yourself, etc. which used to be several hundred or thousand dollar accounts for law guys.

I had a will made for me once and really, about 95% of what the attorney had was a template and he just sat down with me, took names of where I wanted my assets to go, and we both had it notarized and I went on my way. These self-help law programs and websites are making a kill for the creators of them but are killing potential clients for the attorneys in your area.

 

[brygguy1]

Interesting. I applied to law school last year and got in to several of my choice schools, but decided that medicine would be a more fulfilling field. As far as I could tell, I likely would make much more money as a patent attorney than I will in any specialty as a physician.

Unfortunately my computer cant open the file you posted though so I cant read your excel spreadsheet.


A few of my favorite lawyer jokes:

Q: What do you call 5,000 lawyers at the bottom of the ocean?
A: A good start

Q: What do you need when you have a lawyer up to his neck in cement?
A: More cement.

Q: Why did New Jersey get all the toxic waste dumps, and Seattle got all the lawyers?
A: New Jersey got first choice.

Q: How many lawyers does it take to screw in a light bulb?
A: How many can you afford?

 

[randombetch]

"I predict that by 2015, if our economy is back on track and unemployment is <6%, then new lawyers at top law firms will get a starting salary of around $170k.

I predict that over the next 30 years, salaries in medicine will rise as fast as salaries in other fields because I don't think Americans will be willing to decrease the quality of doctors in exchange for cheaper doctor salaries. "

how do you make these predictions?
you don't. you haven't got a clue, you're a pre med

this topic is almost as bad as that kid who said he could save all of his wages as a PA.

Good try.

I don't make predictions? I just did. How did I do it? By what's called "inference."

"this topic is almost as bad as that kid who said he could save all of his wages as a PA."
Interesting how you compare a topic to a person. Grammar is good stuff - you should check it out.

But of course, you're totally right. I'm pre-med, therefore I cannot possibly make inferences about the economy and the wages of lawyers. How silly of me 🙄

I'd bet money that the median salary of Columbia graduates working in large law firms for the class of 2015 will be at least $170k. You don't even need an econ background like mine to make such an obvious inference.

 

[thamsenman]

I don't make predictions? I just did. How did I do it? By what's called "inference."

"this topic is almost as bad as that kid who said he could save all of his wages as a PA."
Interesting how you compare a topic to a person. Grammar is good stuff - you should check it out.

But of course, you're totally right. I'm pre-med, therefore I cannot possibly make inferences about the economy and the wages of lawyers. How silly of me 🙄

I'd bet money that the median salary of Columbia graduates working in large law firms for the class of 2015 will be at least $170k. You don't even need an econ background like mine to make such an obvious inference.

Really? a lot of top law firms went under last year, I'm not so sure I could make that wager.

btw: a lot of people entered law with the same very certain notions about what the demand for their services would be. The truth is there a lot of lawyers and not a lot of high paying jobs for lawyers. Something has to give.

 

[johncalvin]

I don't make predictions? I just did. How did I do it? By what's called "inference."
...

But of course, you're totally right. I'm pre-med, therefore I cannot possibly make inferences about the economy and the wages of lawyers. How silly of me 🙄

...

While I don't agree with some of your numbers, randombetch, I appreciate you making the chart. Most people on SDN qualitatively grasp NPV, but fail to apply it quantitatively. For example, someone mentioned the lack of compound interest as a "flaw" in your calculations--failing to realize that multiple years' investments are compounded through the cost of capital assumed while calculating the NPV.

On a similar note, I think a better application of NPV would be comparing salary potential of MD vs. MD/PhD (the latter has vastly fewer investments, yet a longer incubation time before earnings)...

 

[randombetch]

While I don't agree with some of your numbers, randombetch, I appreciate you making the chart. Most people on SDN qualitatively grasp NPV, but fail to apply it quantitatively. For example, someone mentioned the lack of compound interest as a "flaw" in your calculations--failing to realize that multiple years' investments are compounded through the cost of capital assumed while calculating the NPV.

On a similar note, I think a better application of NPV would be comparing salary potential of MD vs. MD/PhD (the latter has vastly fewer investments, yet a longer incubation time before earnings)...

Thanks john!

Well, I think it's pretty intuitive that the opportunity cost of 4 additional years of school far exceeds the ~$60k or so you get ($40k to cover tuition + $20k stipend) for doing the PhD. Also, MD/PhD's tend to go for lower paying jobs anyway (research oriented jobs).

 

[thamsenman]

Thanks john!

Well, I think it's pretty intuitive that the opportunity cost of 4 additional years of school far exceeds the ~$60k or so you get ($40k to cover tuition + $20k stipend) for doing the PhD. Also, MD/PhD's tend to go for lower paying jobs anyway (research oriented jobs).

An MD is a waste of money and an MD/PhD is a waste of time.

And a JD is a waste of time AND money.

 

[randombetch]

Also, the amount of debt you consider to begin with is laughable. Only $40k/year...I'm pretty sure over half of the medical schools have tuition that is over $40k/year, and that is not even considering CoA. Also need to add in compounding interest on those loans during residency. (I'd say $60k/year for medical school with additional $100k of interest during residency).

Another thing, I think I'm reading it correctly, but you are saying that you'll be making $74k by the last year of residency? I'm pretty sure you'll start at ~$50k and end at like ~$56k by your 5th year (resident salary goes up by like $1k each year).

Haha, well the average debt for a recent med school grad $140k in debt, so I really don't think the $175k debt that gets accumulated in my example is underestimating debt. And cost of living? Why would I only take into account cost of living only during medical school? You're going to be paying rent and for food your entire life, not just medical school.

And yes, if you start at $53k, you'll likely end making around $74k in the end. You're forgetting about inflation. Resident salary goes up by around $2k unadjusted for inflation a year according to this:
http://mdsalaries.blogspot.com/2005/10/residency-salaries.html
which of course means that the differential increases by $2k*1.03^n, where n is the number of years since the start of the residency.

So if you start residency today and make $46k now, then you'll end making 56.5*1.03^6= $67k in your 6th year assuming the wages increase at the same rate of inflation (which I'm guessing they have to, unless they think residents will be willing to accept an even lower standard of living).

Taking those figures, $46k = $53k 4 years from now. And $56.5k = $73.7k 9 years from now. My figures are consistent with those of mdsalaries.blogspot.com.

As for the "compounding interest" - I've taken that into consideration. Read john's post above.

 

[randombetch]

An MD is a waste of money and an MD/PhD is a waste of time.

And a JD is a waste of time AND money.

Hahaha, some people are good enough to make lots of money with either.

 

[amine2086]

I wanted to compare the amount of money one could make as a lawyer vs as a doctor, but most comparisons I see don't take into account the interest rate (making $1 now is much better than making $1 10 years from now).

I made some assumptions:

• T14 law school graduate, managed to get a job at a large law firm in 2013 that gave a starting salary of 170k
• 6 year residency+fellowship, starting salary in present dollars is $230k (I was thinking of an oncologist working in private practice)
• The lawyer and doctor have salary increases of the same %

I think these are reasonable assumptions.

"Law" means lawyer salary
"LSum" means sum of all salary so far
"PV Law" means the present value of that lawyer's salary, taking into account an interest rate (which you can change if you want)
"PV Lsum" means the present value of that lawyer's total income
And medicine has the same analogous columns.

You'll notice that at the end of 28 years, the hypothetical oncologist is making $908k a year. That might appear totally ridiculous at first, but you have to consider inflation. $908k 28 years from now is actually only $397k today (3% inflation, you can adjust this if you want in the excel sheet to change the starting salary of the oncologist - I assumed a fixed $170k starting salary for new lawyers 3 years from now). I would argue, looking at salary compensation surveys, that $397k today for a private practice oncologist with 24 years of experience is not unreasonable.

My conclusion is that lawyers in top law firms actually don't make that much more than private practice oncologists do. I was expecting lawyers to be making much, much more.

Tell me what you guys think!

You are comparing top lawyer with an average doctor. I think a better comparison would have been between an average lawyer and an average doctor. Also for some comparison, you have to put money aside and this is one of them. Most people go to medicine not only because it offers decent salary and great job security but also because of their commitment to service.

 

[randombetch]

You are comparing top lawyer with an average doctor. I think a better comparison would have been between an average lawyer and an average doctor. Also for some comparison, you have to put money aside and this is one of them. Most people go to medicine not only because it offers decent salary and great job security but also because of their commitment to service.

Again, the initial setup is just like that because I did this for myself. If I were to go into law, I would work in a large law firm. If I were to go into medicine, I'd be most interested in oncology.

If you want to compare and average lawyer to an average doctor, all you have to do is change the initial values.

As for the other compensation differentials you mentioned, those would be kind of hard to put into an excel sheet, don't you think? This was meant to compare PV incomes, nothing more.

 

[CaptainSSO]

Damn, kind of thought that for most people, trying to become a doctor was about more than just a desire for money. Sort of depressing thread.

But anyway, I personally wouldn't even have the stomach to do the kind of **** a lawyer does, with all their billable hours and whatnot. Science is where it's at.

 

[randombetch]

Damn, kind of thought that for most people, trying to become a doctor was about more than just a desire for money. Sort of depressing thread.

But anyway, I personally wouldn't even have the stomach to do the kind of **** a lawyer does, with all their billable hours and whatnot. Science is where it's at.

What about this thread makes you feel like a desire for money is the only factor for most of us? Even if it's not a primary concern, one should still think about things such as "opportunity cost" and income.

 

[Mackey]

What about this thread makes you feel like a desire for money is the only factor for most of us? Even if it's not a primary concern, one should still think about things such as "opportunity cost" and income.

I don't know.

Heres your first statement:

My conclusion is that lawyers in top law firms actually don't make that much more than private practice oncologists do. I was expecting lawyers to be making much, much more.

Heres your last:

My conclusion is that lawyers in top law firms actually don't make that much more than private practice oncologists do. I was expecting lawyers to be making much, much more.

Did I miss the part where it was implied that your desire to go either medicine or law was for the good of community? I must have. Whoops. My bad.

Troll. Buh-bye.

 

[Tutmos]

It's starting to sound like someone either just finished or just had their first exam in an econ class.

 

[Law2Doc]

Agreed, making close to $200k as a lawyer is probably the equivalent of making $500k as a doctor after residency.

OR

Compare the $250k doctor with a $100k lawyer (if not less).

Also, the amount of debt you consider to begin with is laughable. Only $40k/year...I'm pretty sure over half of the medical schools have tuition that is over $40k/year, and that is not even considering CoA. Also need to add in compounding interest on those loans during residency. (I'd say $60k/year for medical school with additional $100k of interest during residency).

Another thing, I think I'm reading it correctly, but you are saying that you'll be making $74k by the last year of residency? I'm pretty sure you'll start at ~$50k and end at like ~$56k by your 5th year (resident salary goes up by like $1k each year).
----------
I changed the numbers in your chart and put in $500k for the doctor, year 13 the doctor passes the lawyer, and by the end is $2mil ahead.

If you put in $100k for the lawyer, the doctor passes the lawyer at year 15, and is only ahead by less then $1mil at the end.

Having gone partially down each of these paths so far, I actually don't disagree with a lot of the assumptions. My tweaks would be as follows:
(1) the large firms in big cities tend to start at about $140k each year, not $170k. However in lucrative years (not the last few) you could get that difference in a bonus. You sort of negate the concept of bonuses with your linear raises, which tends to be more true in medicine (where income is a constant function of logging reimbursable hours) versus law, where bigger cases can make for bigger payoffs. I agree that in the first handful of years your salary in law is linear, but it doesn't always stay that way.

(2) In law in 7-10 years some percentage of the employees will be given the opportunity to buy into partnership. This tends to make for a slight decrease in salary during the buy in year, but can be dramatic increase in salary thereafter if the firm is doing well (sometimes double or more). Other people leave to be the big fish in smaller (or even solo) firms, and can see their salary change dramatically in either direction. So again, the linear model isn't perfect for law. It is very much a career where you won't be staying in the same job description forever. Which makes it very hard to plot on a graph.

(3) Residents these days make around $40-50k a year, and this tends to go up by about $2-3K per year. There are some geographically based cost of living adjustments regionally. But no way you will be making $75k while a resident. You will be scrounging for the meetings with the free food.

(4) Agree the debt is too low -- the amount of debt plus interest most accumulate on the medicine path is going to be in the $200k+ range, with $300k not unheard of. For law (which is cheaper and shorter), it's going to be about $90k, and you won't have years of residency where interest grows unchecked.

(5) I do not, however agree with the folks who say that you need to compare $500k doctors to $100k lawyers. Most of the folks who get into med school could have gotten into law school based on their undergrad stats. The same doesn't hold true the other way round. The average lawyer in the US probably earns $50k, but a person who devotes the time and effort getting into law school that most premeds devote getting into med school isn't going to end up average. They are going to get themselves into a high end law school and put in the kind of time needed to make law review and then get that cushy job where they will be regarded as really willing to burn the midnight oil. It's a lot less about aptitude (as some suggest on SDN) and a lot more about being willing to work extraordinarily hard and about having a good head on your shoulders. I saw a lot more people in medicine who had the work ethic and brains to become top lawyers than I did in my law school, honestly; not just the ROAD or ortho crowd. I personally would compare the average hardworking IM type to the typical big firm grunt. So yes, the right analysis, IMHO based on having gone down both rabbit holes, is to compare the average doctor to the top firm lawyer. That's the closest you'll get to apples and apples, based on the work level involved and having a good head on your shoulders. The decision for the typical smart college student isn't law vs derm, it's more often top law school vs non-top ranked med school. The hurdle is simply higher for med school.

 

[loljkttyl]

(3) Residents these days make around $40-50k a year, and this tends to go up by about $2-3K per year. There are some geographically based cost of living adjustments regionally. But no way you will be making $75k while a resident.

Just wanted to point out that residents these days make around $50-60k a year. I know this b/c I'm interviewing now and was pleasantly surprised.

 

[Law2Doc]

Just wanted to point out that residents these days make around $50-60k a year. I know this b/c I'm interviewing now and was pleasantly surprised.

Um, my pay stub (and that of virtually all of my med school colleagues who are now interns) would disagree with you. In most of the country $45-47k is a pretty common intern salary. I've seen quite a few grand less, and more rarely, a few grand more. Nobody starts at close to $60k, and very few get to close to that number during residency unless they are doing a very long residency. I'm sorry but you are likely looking at outlier programs in high cost of living areas such as Manhattan if you are being quoted high $50k to $60k numbers.

 

[roseglass6370]

What about this thread makes you feel like a desire for money is the only factor for most of us? Even if it's not a primary concern, one should still think about things such as "opportunity cost" and income.

If it was about opportunity cost and income, then maybe you'd narrow your focus to looking at different specialties rather than broadening it to include law (which is entirely unrelated to medicine). Rather, you choose to compare two jobs that have a reputation for being two of the highest paying and prestigious fields. If you can't see why people would assume that you're in it for the money, you're being very, very naive.

My advice, randombetch, is to find a field that you're genuinely passionate about (be that law, medicine, or something different entirely) and pursue that. In the long run, having money isn't going to play the biggest role in determining your career satisfaction. Studies support this.

However, I doubt you take any of my advice.

 

[womp]

So yes, the right analysis, IMHO based on having gone down both rabbit holes, is to compare the average doctor to the top firm lawyer. That's the closest you'll get to apples and apples, based on the work level involved and having a good head on your shoulders. The decision for the typical smart college student isn't law vs derm, it's more often top law school vs non-top ranked med school. The hurdle is simply higher for med school.

Sure hope it stays that way. Medicine deals with lives. There aren't really any "easy cases" for medicine, they could all go really wrong. It's also why this current movement to give midlevels (NPs, PAs, pharmacists) even more diagnostic autonomy seems rather dangerous and short-sighted. Competition from midlevels (say CRNAs over anesthesiologists) is something the OP's Excel spreadsheet cannot anticipate.