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Once considered a worthwhile investment, law schools are now under intense attack from critics, alumni and even law professors -- many of whom say students are better off not going at all than to be left underemployed, disillusioned and with crushing amounts of debt.

The 2008 financial crisis has had crippling effects on the historically lucrative law profession. Starting salaries of recent law school graduates declined by 20 percent between 2009 and 2012, according to National Association for Law Placement data. Only 56.2 percent of 2012 law school graduates had full-time, long-term legal jobs nine months after graduation, according to the American Bar Association. And prospective applicants are taking note of the trend. Law school applications dropped more than 15 percent in 2012 from the year before, according to the ABA.

But a new report tells a very different side of the story. It suggests that earning a law degree will, in fact, pay off.

“The Economic Value of a Law Degree” report was written by Michael Simkovic, who is an associate law professor at Seton Hall University School of Law, and Frank McIntyre, an assistant professor of finance and economics at Rutgers University Business School.

The high unemployment rates, the decline in starting salaries, the decline in law school applications -- these are all trends that are “really happening,” Simkovic said. “But that doesn’t tell us very much.”

What he and McIntyre sought to find out is if a law degree typically increases the earnings of law graduates compared to what such individuals would likely have earned with only a bachelor’s degree. Their report says that earnings dropped for both bachelor’s- and law-degree recipients after the recession, but that law graduates maintained their relative advantage.

“It’s not the case that the law degree stopped working. It’s just the case that it’s a recession,” Simkovic said. “And the people with law degrees are still doing a lot better than people with only bachelor’s degrees.”

The professors analyzed long-term outcomes data from the United States Census Bureau’s Survey of Income and Program Participation and the National Education Longitudinal Study, while using appropriate statistical controls.

While Simkovic acknowledged that recent law school graduates may not be faring well right now, he said those graduates need to be looked at in the context of the labor market. The earning premiums of law school graduates have been cyclical rather than steady over time, Simkovic said. He also said it is more effective to look at lifetime earnings rather than starting salaries to get a better picture of the economic value of a law degree, since starting salaries “don’t tell you what you’re going to make for your entire life.”

After factoring in opportunity and financing costs, the professors found that the mean value of a law degree is around $1 million. That means that, on average, a law school graduate will make $1 million more over his or her lifetime than a peer who only has a bachelor’s degree. The median value is $610,000, and the 25th and 75th percentiles are $350,000 and $1.1 million respectively. These numbers do not include tuition costs or taxes. Simkovic said he did not factor in tuition costs because they are so varied across law schools.

“People are paying so many different prices. It would be really complicated and take up a lot of space to include a lot of the possibilities,” he said.

The report says that the results suggest that even at the 25th percentile, the value of a law degree exceeds typical net-tuition costs by hundreds of thousands of dollars.

“We therefore reject the claim that law degrees are priced above their value,” the study says.

The professors also found that law students are not likely to default on their student loans.

One limit to Simkovic’s and McIntyre’s data is that the most recent data from the Survey of Income and Program Participation are from law school graduates who graduated in 2008. It reports on their earnings through 2011. Simkovic said that although the report does not include the most recent law school graduates, it still includes those who are young.

Additionally, the study does not address what effect going to a top-ranked vs. a lower-ranked law school will have on earnings or employment rates. Simkovic said the data show that even those in the bottom percentile are “doing pretty well,” and presumably all of the graduates in that category could not have gone to a top-10 law school.

But Brian Tamanaha, a law professor at Washington University Law School and author of "Failing Law Schools," said this is the article's biggest flaw. While a law degree may pay off for students at top law schools and for top students at lower-ranked law schools, it does not pay off for many students at bottom law schools or for bottom students at middle law schools, Tamanaha said in an e-mail.

"The study blends the winners and losers, to come up with its $1,000,000, earnings figure, but that misses the point of my book: which is that getting a law degree outside of top law school -- and especially at bottom law schools -- is a risky proposition," Tamanaha said. "Nothing in the article refutes this point."

Finally, the study does not address whether a person with a law degree would make more or less over a lifetime than someone with another advanced degree.

“We’re not saying that everyone should go to law school,” Simkovic said. “We’re really looking at the choice between going to law school and stopping at a bachelor’s degree.”

Kyle McEntee, who the co-founded the website Law School Transparency, said that even if the analysis shows that an investment in law school has a positive value in the long run, the authors have “missed the point.”

“Law schools have made a habit out of capturing as much value out of their students as possible -- and for a long time, used deceptive and immoral marketing tactics to do so,” McEntee said in an e-mail. “Tens of thousands of law graduates leave school each year wondering how they're going to manage to pay off their six-figure loans. That's what motivates critics and frightens prospective law students.”

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