Wednesday, August 17, 2011

Law Schools Sued Over Placement Stats Fraud

The National Law Journal reports that 2 law schools have been sued in separate actions alleging fraud in their reporting on post-graduate job placement statistics. The article by Jenna Green notes in both suits the plaintiffs are represented by the same firm, Kurzon Strauss in New York.

The schools named in each complaint are New York Law School and Thomas Cooley. While there are only two law schools named, in the article, lawyers with the firm are quoted:

"The moment for law schools to be held accountable is now," David Anziska, of counsel at Kurzon Strauss in New York, who represents the plaintiffs, said during a conference call with reporters. "We picked Cooley and New York Law School because they seemed to be J.D. factories, but this problem is not just confined to those two schools."

Name partner Jeffrey Kurzon added, "This is not about the quality of the education. It's more like a false advertising claim than a products liability claim."
The claims in the two complaints are very similar, varying only in details according to the school being described. In a completely separate action earlier in the year, Thomas Jefferson Law School in San Diego was sued over a similar claim by an unemployed 2008 graduate. All of these suits are class actions.

Sadly, the points are quite familiar to law school administrators and faculty who have been arguing about the same issues and in some anguish over what, exactly, to do about them for quite a while. The problem is that it takes some time to change the course of legal education (at least without either slashing the employees or missing a number of meals, both of which, we truly hate to contemplate). But how fair is this to our students? We are asking ourselves and each other this question, as well. But, most uncomfortably, now litigators from OUTSIDE are asking the questions! Here are some points from the Cooley complaint, lightly edited:
Thomas Cooley in its Mission Statement represents that its underlying purpose is to “prepare its graduates for entry into the legal profession through an integrated program with practical legal scholarship as its guiding principle and focus,” by imbuing them with the requisite skills and knowledge “needed to be a success in the law and a valuable member of society.”

3. Unfortunately, in reality, far from preparing its many, many students for entry into the legal profession and imbuing them with the skills and knowledge necessary to succeed in law, the school consigns most of them to years of indentured servitude, saddling them with tens of thousands of dollars in crushing, non-dischargeable debt that will take literally decades to pay off. The school has done this while blatantly misrepresenting and manipulating its employment statistics to prospective students, employing the type of “Enron-style” accounting techniques that would leave most for-profit companies facing the long barrel of a government investigation and the prospect of paying a substantial civil fine. These deceptions are perpetuated so as to prevent prospective students from realizing the obvious -- that attending Thomas Cooley and forking over nearly $100,000 in tuition payments is a terrible investment which makes little economic sense and, most likely, will never pay off.

4. Specifically, Thomas Cooley, through both its print and internet marketing materials, commits two basic written, uniform misrepresentations. First, the school during the class period claims that a substantial majority of its graduates -- roughly between 75 and 80 percent -- secure employment within nine months of graduation. However, the reality of the situation is that these seemingly robust numbers include any type of employment, including jobs that have absolutely nothing to do with the legal industry, do not require a JD degree or are temporary or part-time in nature. Rather, if Thomas Cooley was to disclose the more pertinent (snip) employment statistic -- i.e. those graduates who have secured full-time, permanent positions for which a JD degree is required or preferred -- the numbers would drop dramatically, and could be well below 30 percent, if not even lower.

5. Second, Thomas Cooley grossly inflates its graduates‟ reported mean salaries, by calculating them based on a small, mostly self-selected subset of graduates who actually submit their salary information. If the Defendants were to disclose salary data based on a broad, statistically meaningful representation of its graduates, by including more graduates who have failed to secure full-time, permanent employment, the reported mean salaries would decline precipitously.

6. Defendants‟ deceptions are all the more shocking considering that they are being perpetuated on na├»ve, relatively unsophisticated consumers -- many of whom are barely removed from college -- who are often making their first “big-ticket” purchase. These students tend to apply to law school with one objective in mind: to attain the kind of job that provides the compensation and lifestyle that are commensurate with and worthy of the enormous time, money and personal sacrifice invested in a legal education.

This is pretty baldly stated and very ugly when put this way. But it is sadly not far from the truth. What they say about non-dischargeable debt is absolutely true. I posted about that some time ago here. Over the years, for whatever reason, Congress has shifted laws and regulations so that student debtors who default are somehow treated as the most terrible felons. And so the loans are no longer dischargeable in bankruptcy. And furthermore, student loans in arrears can be garnished without any judicial action. There are all sorts of appalling rules about student debt, stripping holders of nearly any of the protections offered to any other sort of debtor in America today!

We all know the rationalizations for why it is very difficult to get truthful and complete job and salary statistics the way that law schools gather them now. Career development offices all tell us that it's very difficult to get graduates to report back, and that only the students with good salaries will volunteer their income. But if we think about it creatively, we can also easily imagine some ways that we could better gather such information, if the schools, or NALP or the ABA REALLY wanted to get the information.

This somewhat terrifying litigation story ties back to the previous post about the fight between ABA and NALP over who is going to gather this type of information, and how that argument is only going to further decrease the likelihood of clear and trustworthy information being gathered. This is a terrible time for this showdown to happen!

As an employee at one of the larger law schools, I am also not sure if the angel of death passed by our door or if we are waiting for the other shoe to drop. I don't know, either, what to hope for. This sort of pressure may finally force all of us in legal education to face the music and begin a long-over-due renovation project, that we are all very afraid to tackle.

In fairness to the three schools, the deans have made answers, refuting the charges, in one way and another. Cooley, most notably, has counter-sued the law firm in Michigan court for defamation in its online posts about the original litigation. Dean Matasar of New York Law School was quoted as saying that often the students accept jobs that are less than they had hoped for, in a separate interview with National Law Journal dated July 26, 2011, about his stepping down as dean at New York Law School. The article about the litigation also notes that two of the 3 named plaintiffs against New York Law School are now practicing lawyers.

The image of the big hammer is courtesy of
I just thought it got to the heart of the pressure this litigation brings to legal education!

No comments: