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July 31, 2013

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Steve Diamond

Go ahead and be as patronizing as you like BJD. That's a feeble effort to discourage constructive debate.

I was right then and now - I asked for a non profit's 990s. Anyone doing diligence on a non profit would ask the same question. LST claimed to be a non profit and asked for donations. It is reasonable to assume such contributions are deductible and so it is reasonable to ask if the organization has 990s available to provide greater transparency to potential donors. This is best practice.

Guess what, there were no 990s because they had not become a tax deductible organization. But no where did they explain that to their potential contributors. Now they admit no donations prior to late 2012 will be deductible.

I want to see the 990s so that I can learn about their contributors. I would also like to know about their relationship, if any, to class action lawyers who are suing law schools, particularly in light of their effort now to extract payments from law schools to earn their "trust." (Good luck with that.)

BoredJD

Steve- Let's review:

No Steve, "anyone doing diligence on a non profit" would try to figure out what the non profit does before they go digging into their Form 990s. With no evidence and seemingly no familiarity with LST outside of perusing their website, you said "My guess is that LST is really interested in making money not in any serious change...No doubt it will be offering law school applicants some kind of software package that will only add to the cost of going to law school." Not exactly "encouraging constructive debate" wouldn't you say? And clearly not just the innocent inquiry into an organization that you are now trying to say it was.

At one point, you believed that LST had taken its website down out of some fear of your incredible detective skills: "Their website is also now down for some unexplained reason." You assumed I was part of LST simply because I was also advocating for transparency, again without failing to basic questions. You then started blabbering about "angel funding" and "valuations" in a bad parody of a day trader who's read too many Investing for Dummies books.

LST already has given you answers to your questions, either directly or in other media. They admit they receive few donations. I'm not sure why you're trying to find out about their donors, likely a few sympathetic law professors and recent law grads giving $50 a pop. They've admitted they talk to the class action lawyers and to the public relations staff at the very schools those lawyers are suing. I'm mystified at why you're pursing this with such fervor, I'd really like some "transparency" from you before I start theorizing.

Now go ahead and misinterpret everything I've just said.

Steve Diamond

As I made clear in my post Profits of Doom (LUN) my suspicion - now confirmed - that there was a business model at work was first triggered by my experience of the obstinacy of the law school critics in the face of the point I made about the macroeconomic context of the law school. That context is amply and, to my eyes, persuasively, explained in the Simkovic/McIntyre paper.

The obstinacy was so great that when I pointed to the possible business model at work, Derek Tokaz, Research Director for LST, called for a boycott of my classes until I was "forced out" of my teaching position. (That and the death threats I received on ATL are among the reasons, Stan, why I no longer allow comments on my blog.)

To this silliness that non-profits don't have business models, well just ask yourself if the board of directors of the Gates Foundation has a business model - since two of those directors are Bill Gates and Warren Buffett, what do you think?

As for disclosure by LST, no, my questions have not been answered and it would appear from the post today by Brian Leiter, LST has created a whole new raft of questions among law school deans.

LST does't just "talk" to class action lawyers, they write op-eds in support of the class action lawsuits (one of which was, once again, this time in a federal appellate court, thrown out). So yes, I would like to see a list of their contributors as well as the names of their advisory board members to see if any of those lawyers are more closely involved. One of the neat little tricks, of course, is that by delaying the filing for non-profit status - out of misfeasance or malfeasance, I don't know - they did not have to file the 990s and so avoided public scrutiny until now.

Steve Diamond

Correction: LST delayed the filing for "tax exempt" status, not non-profit status.

BoredJD

"that there was a business model at work was first triggered by my experience of the obstinacy of the law school critics in the face of the point I made about the macroeconomic context of the law school"

Your prediction about LSTs "business model" was akin to me saying that tomorrow it would be sunny, watching it snow, and then celebrating the fact that I predicted “weather”. What you actually said, again, was this: "My guess is that LST is really interested in making money not in any serious change...No doubt it will be offering law school applicants some kind of software package that will only add to the cost of going to law school."

That's nowhere near what LST has attempted to do with their certification program, which I don't think is going to work for other reasons we could debate if you stop ranting about extortion. All you managed to prove is that non-profits need money to run. If you want to label that a "business model" because it’s a neat turn of phrase you read in Business for Dummies, then go ahead. But labeling something a "business model" doesn't make the organization a business or give the founders secret profit motives. Yet again, you have seriously overstepped and refuse to acknowledge it.

“The obstinacy was so great that when I pointed to the possible business model at work, Derek Tokaz, Research Director for LST, called for a boycott of my classes until I was "forced out" of my teaching position.”

It may have been that, or, more likely, it was your conduct over a long series of posts in which you attempted to say that SCU had done something (I am still unsure what) about tuition, and everyone pointed out that tuition had risen by thousands starting in 2007 and that this rise was greater than Stanford’s. Derek pointed out that students should evaluate those posts to see if they’d be interested in taking classes from somebody who refused to admit very basic economic facts about their own law school:

http://www.constitutionaldaily.com/index.php?option=com_content&view=article&id=1901:santa-clara-prof-steve-diamond-approaches-escape-velocity&catid=42:news&Itemid=71

"they write op-eds in support of the class action lawsuits."

Information that surprised nobody but yourself, just like the fact that LST was associated with Derek Tokaz or DJM, that they didn’t have to file a 990 because they don’t have enough in donations (puts the whole kibosh on the shadowy rich plaintiff’s lawyer behind the curtain theory), and other things that you had to be told by very patient commenters. One of LST's founders even disclosed his entire work history since founding the organization, including salaries. I'm not sure how forthcoming LST can continue to be with you without running into the "Orly Taitz" problem.

anon

The entertainment continues.
Some of you are engaged in endless name calling, insulting comments and almost constant accusations against those you clearly perceive to be your "enemies"?
Is this all the fault of the "others" who "force" you to behave so badly?

Learned Hand

How is LST (a non profit) seeking to monetize its services any different from law professors and non-profit law schools monetizing the publication of legal scholarship? LST put in a lot of work to produce data, which arguably has some value. Law professors put in a lot of work to produce legal scholarship, which arguably has some value.

Deborah J Merritt

Unfortunately, many law schools are still failing to provide transparent information to prospective students. LST performed an audit of law school websites in early January 2013 and found that two-thirds of law schools had not complied even with the ABA's very minimum standards. After receiving that information from LST, deans and associate deans from about 100 law schools communicated with LST's executive director, Kyle McEntee. He helped many of them improve their transparency--although one-third of law schools still failed to meet the ABA's standard as of late February.

LST charged no one for either the audit or the counseling. And this was the second year of providing free services; Kyle and his colleagues performed similar reviews in 2011-2012, notifying schools of glaring omissions in their disclosures or problems with the manner of in which they made those disclosures.

As professors, we may not like the idea that law schools are dragging their feet on transparency--but the facts are pretty clear. The above information comes from the LST site (transparency index) and SSRN papers linked from that site. So the question is: How do we restore trust in legal education? We, as faculty, could work closely with our schools, assuring that each of our schools reports data appropriately. We could also police the sites of other schools for failures that harm our collective reputation. But do we want to do that?

Alternatively, we could donate to LST. I've done that for the last two years, as I note in this post: http://www.lawschoolcafe.org/thread/assuring-transparency/. But relatively few faculty have donated to LST and the organization can't exist on good intentions alone.

That leaves two other options: charging law schools for the type of services LST has been providing or charging prospective students for access to the information LST generates. I think LST made a wise decision to ask schools, not prospective students, to pay for the service. We will restore trust in our schools much faster if schools themselves step forward. If prospective students have to pay for information about the trustworthiness of schools' scholarship and employment information, that seems like yet another deterrent to pursuing law school.

In creating the certification process, LST suggested that schools seek private donations to cover the cost of certification. I am willing to be that donor at the school where I teach. We have a good record of transparency, but I think it is well worth outsourcing some of the work we do to preserve that record--while helping assure that legal education generally regains the trust it should have.

I encourage other faculty to support LST, either through personal donations or by supporting the certification effort. Commitments to transparency are easy for schools to make; it's the actions that count.

harold

I think this post - as applied to Leiter & Diamond and their views on law school reform, is pretty fitting:

http://krugman.blogs.nytimes.com/2013/08/07/the-year-of-living-stupidly/

"To this day, one often hears pundits and establishment types in general talking as if we had a clear distinction between the elite, who know How Things Work, and the great unwashed who need to be led to elite wisdom. The reality, however, is nothing like this."

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