By now you have heard about about yesterday's (August 8, 2011) lawsuits against Thomas M. Cooley Law School and against New York Law School for misleading law-students about job prospects. You can get copies of the two complaints on the Current Class Actions page of Kurzon Strauss LLP's website.
The allegations are that the schools misled students by reporting placement rates that were substantially higher than the percent of graduates with full-time jobs that require a JD. According to the complaint against New York :aw School, the school has
consign[ed] the overwhelming majority of [its students] 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.
Complaint, New York Law School, ¶ 3
The "Preliminary Statement" in each complaint that the problem is not limited to the two current defendants:
10. Unfortunately, NYLS’s false and fraudulent representations and omissions are endemic in the law school industry, as nearly every school to a certain degree blatantly manipulates their employment data to make themselves more attractive to prospective students. It is a dirty industry secret that law schools employ a variety of deceptive practices and accounting legerdemain to “pretty up” or “cook” the job numbers, including, among other things, hiring recent unemployed graduates as “research assistants” or providing them with “public interest” stipends so as to classify them as employed, excluding graduates who do not supply employment information from employment surveys, refusing to categorize unemployed graduates who are not “actively” seeking employment as unemployed, and classifying graduates who have only secured temporary, part-time employment as being “fully” employed.
11. Thus, the law school industry today is much like a game of three-card monte, with law schools flipping ace after ace, while a phalanx of non-suspecting players wager mostly borrowed money based on asymmetrical information on a game few of them can win. To a remarkable extent, law schools have been astonishingly successful in carrying out this scheme. Last year law schools awarded over 43,000 JD degrees, an increase of 11 percent from a decade earlier, while law school tuition over the past two decades has risen exponentially, far exceeding both inflation and any increase in attorneys’ starting salaries. Not surprisingly, the debt burden of law school graduates has risen correspondingly, and the average debt burden for graduates of private institutions is now over $100,000.
12. The dramatic increase in law school tuition has dovetailed with the dramatic increase in faculty compensation. Law school professors and deans are perhaps the best remunerated in academia today, enjoying both lavish perks and exorbitant salaries that rival those of Fortune 500 executives. For example, during the fiscal year of 2008-2009, Dean Matasar earned a staggering $543,738 in total compensation, making him one of the highest paid law school deans in the country.
13. After much public hand-wringing and increased scrutiny, the legal profession has finally begun to recognize the systemic fraud the law school industry has been perpetuating. Senator Barbara Boxer of California and Senator Charles Grasserly of Iowa have each sent separate letters to the President of the ABA, taking the organization to task for failing to properly police the law school industry. Additionally, a coalition of 55 law school student body presidents have sent to Congress proposed legislation that would, among other things, create new reporting standards for employment data, require law schools to submit annual employment reports to the Department of Education (“DOE”), and empower the DOE to audit these reports. The problem has grown so acute that even the President of the California Bar Association in a much publicized article in the California Bar Journal openly implored law school deans to adopt more rigorous reporting standards by disclosing the type of detailed employment and salary information that would allow students to get a more realistic picture of their post-graduate financial situation.
14. These entreaties had fallen mostly on deaf ears until now, as the ABA’s committee on accrediting law schools has just recently enacted guidelines that would expressly require law schools to report their true post-graduate employment rate, by disclosing the type of information Plaintiffs are seeking here: the exact percentage of graduates who have obtained permanent, full-time legal employment. Specifically, law schools will be required to break down their employment data so as to indicate whether a position is full-time or part-time, permanent or temporary, funded by the law school or an affiliated university, and whether bar passage or a JD degree is required or preferred.
Complaint, New York Law School, ¶¶ 10-14 (emphasis added). As I noted in ABA, NALP and Transparency on Jobs, the new ABA reporting regime does not really resolve the problem.
It should come as no surprise that Kurzon Strauss LLP is advertising for plaintiffs for similar suits against other law schools:
If you are interested in joining the fight against unscrupulous behavior by certain American law schools to lure students with deceptive post-graduate employment statistics and salary information, please let us know here [link deleted]. We are currently investigating additional law schools throughout the country. (Emphasis added.)
TaxProf has a nice link-post on the lawsuits.
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