THE LAWYER BUBBLE — Early Reviews and Upcoming Events

The New York Times published my op-ed, “The Tyranny of the Billable Hour,” tackling the larger implications of the recent DLA Piper hourly billing controversy.

And there’s this from Bloomberg Business Week: “Big Law Firms Are in ‘Crisis.’ Retired Lawyer Says.”

In related news, with the release of my new book, The Lawyer Bubble – A Profession in Crisis, my weekly posts will give way (temporarily) to a growing calendar of events, including:

TUESDAY, APRIL 2, 2013, 10:00 am to 11:00 am (CDT)
Illinois Public Media
“Focus” with Jim Meadows
WILL-AM – 580 (listen online at http://will.illinois.edu/focus)

TUESDAY, APRIL 2, 2013, 1:00 pm to 2:00 pm (CDT)
“Think” with Krys Boyd
KERA – Public Media for North Texas – 90.1 FM (online at http://www.kera.org/think/)

THURSDAY, APRIL 4, 2013, 11:00 am to Noon (EDT)
Washington, DC
The Diane Rehm Show
WAMU (88.5 FM in DC area) and NPR

FRIDAY, APRIL 5, 2013, 10:45 am to 11:00 am (EDT)
New York City
The Brian Lehrer Show
WNYC/NPR (93.9 FM/820 AM in NYC area)
(http://www.wnyc.org/shows/bl/)

SATURDAY, APRIL 6, 2013, Noon (EDT)
New Hampshire Public Radio
“Word of Mouth” with Virginia Prescott
WEVO – 89.1 FM in Concord; available online at http://nhpr.org/post/lawyer-bubble)

WEDNESDAY, APRIL 10, 2013, 8:00 am to 9:00 am (CDT)
The Joy Cardin Show
Wisconsin Public Radio (available online at http://www.wpr.org/cardin/)

FRIDAY, APRIL 12, 2013
The Shrinking Pyramid: Implications for Law Practice and the Legal Profession” — Panel discussion
Georgetown University Law Center
Center for the Study of the Legal Profession
600 New Jersey Avenue NW
Location: Gewirz – 12th floor
Washington, D.C.

TUESDAY, APRIL 23, 2013, 7:00 pm (CDT) (C-SPAN 2 is tentatively planning to cover this event)
The Book Stall at Chestnut Court
811 Elm Street
Winnetka, IL

Here are some early reviews:

The Lawyer Bubble is an important book, carefully researched, cogently argued and compellingly written. It demonstrates how two honorable callings – legal education and the practice of law – have become, far too often, unscrupulous rackets.”
—Scott Turow, author of Presumed Innocent and other novel

“Harper is a seasoned insider unafraid to say what many other lawyers in his position might…written with keen insight and scathing accusations…. Harper brings his analytical and persuasive abilities to bear in a highly entertaining and riveting narrative…. The Lawyer Bubbleis recommended reading for anyone working in a law related field. And for law school students—especially prospective ones—it really should be required reading.”
New York Journal of Books

“Anyone looking into a career in law would be well advised to read this thoroughly eye-opening warning.”
Booklist, starred review

“[Harper] is perfectly positioned to reflect on alarming developments that have brought the legal profession to a most unfortunate place…. Essential reading for anyone contemplating a legal career.”
—Kirkus Reviews

“[Harper] burns his bridges in this scathing indictment of law schools and big law firms…. his insights and admonitions are consistently on point.”
—Publishers Weekly

“Imagine that the elite lawyers of BigLaw and the legal academy were put on trial for their alleged negligence and failed stewardship. Imagine further that the State had at its disposal one of the nation’s most tenacious trial lawyers to doggedly build a complete factual record and then argue the case. The result would be The Lawyer Bubble. If I were counsel to the elite lawyers of BigLaw and the legal academy, I would advise my clients to settle the case.”
—William D. Henderson, Director of the Center on the Global Legal Profession and Professor at the Indiana University Maurer School of Law

“With wit and insight,The Lawyer Bubble offers a compelling portrait of the growing crisis in legal education and the practice of law. This book is essential reading for anyone concerned about the profession or contemplating a legal career.”
—Deborah L. Rhode, Professor of Law and Director of the Center on the Legal Profession, Stanford University

“This is a fine and important book, thoughtful and beautifully written. It makes the case – in a responsible and sober tone – that we are producing far too many lawyers for far too small a segment of American society. It is a must-read for leaders of law firms, law schools, and the bar, as the legal profession continues its wrenching transition from a profession into just another business.”
—Daniel S. Bowling III, Senior Lecturing Fellow, Duke Law School

“In this superb book, Steven Harper documents, ties together and suggests remedies for the deceit that motivates expanding law school enrollment in the face of a shrinking job market, the gaming of law school rankings and the pernicious effect of greed on the leadership of many of our nation’s leading law firms. The lessons he draws are symptomatic, and go well beyond the documented particulars.”
—Robert Helman, Partner and former Chairman (1984-98), Mayer Brown LLP; Lecturer, University of Chicago Law School

“Every sentient lawyer realizes that the legal profession is in crisis, but nobody explains the extent of the problem as well as Steven Harper. Fortunately, he also proposes some solutions – so there is still room for hope. This is an essential book.”
—Steven Lubet, author of Fugitive Justice and Lawyers’ Poker

“Steven Harper’s The Lawyer Bubble is an expression of tough love for the law, law firms and the people who work in them. The clear message is take control of your destiny and your firm to avoid the serious jeopardy that confronts far too many firms today. Whether you are a partner, associate, or law student, you should read this compassionate and forceful work.”
—Edwin B. Reeser, Former managing partner, author, and consultant on law practice management

“Harper chronicles the disruption of his once-genteel profession with considerable sadness, and places the blame squarely at the wing-tipped feet of two breeds of scoundrel: law school deans, and executive committees that have run big law firms …” –”Bar Examined” – Book Review in The Washington Monthly (March/April 2013)

SOMEBODY’S CHILD

Nine years ago, Senator Rob Portman (R-Ohio) supported a constitutional amendment banning same-sex marriage. Now he wants Congress to repeal the provisions of the Defense of Marriage Act that deny federal recognition to such marriages. Apparently, his reversal on this issue began two years ago when his college freshman son told Portman and his wife that he was gay.

Plenty of prominent national figures have similarly changed their views. The tide of history seems overwhelming, even to conservative commentator George Will. Others can debate whether Portman and those who have announced newly acquired positions favoring gay rights are courageous, hypocrites, opportunists, or something else.

For me, the more important point is that his own child’s connection to the issue caused Portman to think differently about it. Applied to lawyers, the question become simple:

What if the profession’s influential players treated the young people pursuing a legal career as their own children?

Portman’s explanation

In 2011, Portman knew that his son was gay when 100 law graduates walked out of his commencement address at the University of Michigan.

“But you know,” he told CNN recently, “what happened to me is really personal. I mean, I hadn’t thought a lot about this issue. Again, my focus has been on other issues over my public policy career.”

His key phrases are pregnant with larger implications: “[W]hat happened to me is really personal….I hadn’t thought a lot about this issue.”

Start with law school deans

As the lawyer bubble grew over the past decade, some deans and university administrators might have behaved differently if a “really personal” dimension required them to think “a lot” about their approaches. Perhaps they would have jettisoned a myopic focus on maximizing their law school rankings and revenues.

At a minimum, most deans probably would have disclosed earlier than 2012 that fewer than half of recent graduates had long-term full-time jobs requiring a legal degree. It seems unlikely that, year after year, they would have told their own kids that those employment rates exceeded 90 percent. Perhaps, too, deans would have resisted rather than embraced skyrocketing tuition increases that have produced six-figure non-dischargeable educational debt for 85 percent of today’s youngest attorneys.

Then consider big firm senior partners

At the economic pinnacle of the profession, big firms have become a particular source of not only attorney wealth, but also career dissatisfaction. In substantial part, both phenomena happened — and continue to happen — because managing partners have obsessed over short-term metrics aimed at maximizing current year profits and mindless growth.

For example, the billable hour is the bane of every lawyer’s (and most clients’) existence, but it’s lucrative for equity partners. If senior partners found themselves pushing their own kids to increase their hours as a way to boost those partners’ already astonishing profits, maybe they’d rethink the worst consequences of a destructive regime.

Similarly, the average attorney-to-equity partner leverage ratio for the Am Law 100 has doubled since 1985 (from 1.75 to 3.5). Perhaps managing partners wouldn’t have been so quick to pull up the ladder on lawyers who sat at their Thanksgiving tables every year, alongside those managing partners’ grandchildren who accompanied them. Not every young associate in a big firm should advance to equity partner. But offering a 5 to 10 percent chance of success following 7 to 12 years of hard work isn’t a motivator. It invites new attorneys to prepare for failure.

Finally, compared to the stability of a functional family, the current big law firm lateral partner hiring frenzy adopts the equivalent of periodic divorce as a cultural norm. Pursued as a growth strategy, it destroys institutional continuity, cohesion, community, and morale. Ironically, according to Professor William Henderson’s recent American Lawyer article “Playing Not to Lose,” it offers little or no net economic value in return.

Adopting a family outlook or a parental perspective isn’t a foolproof cure for what ails the legal profession. Indeed, running law schools and big firms according to the Lannister family’s values (“The Game of Thrones”) — or those of Don Corleone’s (“The Godfather”) — might not change things very much at all.

It’s also worth remembering that Oedipus was somebody’s child, too.

ANOTHER LAW SCHOOL DEAN MISSES THE TARGET

Today’s chapter in the continuing story of proposals to reform legal education comes from James L. Huffman, emeritus dean at Lewis & Clark Law School. His February 20 Wall Street Journal op-ed recommends eliminating ABA law school accreditation requirements. Maybe that’s a good idea, but not for the reasons that Huffman offers.

Mischaracterizing the crisis

Huffman notes that the sharp decline in the number of law school applicants has created “a true crisis, and law schools are scrambling to figure out how to manage with fewer tuition-paying students.” He proposes to end that crisis by helping marginal law schools devise a way to remain in business. Specifically, he thinks that removing most accreditation requirements would unleash a wave of innovation in legal education and “let a thousand flowers bloom.”

Here’s a better idea: prune the garden.

A thread of insight

Staggering student debt accompanying dismal job prospects for recent graduates causes Huffman to lament the oversupply of lawyers. He suggests that the ABA’s task force “should start by looking within: The organization is a major source of the problem.” Then he lambasts the organization’s accreditation standards as too restrictive.

Huffman’s non sequitur fails to mention the ABA’s most obvious contribution to attorney oversupply: accrediting too many new schools — 15 since 2003 alone. Likewise, Huffman observes correctly that the ABA has become a victim of regulatory capture, but he doesn’t connect it directly to the worst consequences of that victimization: deans free to engage in deceptive behavior to fill their classrooms. Graduate employment rates looked great when schools could include short-term and part-time jobs, work that didn’t require a law degree, and temporary positions that the schools themselves had created.

Missing the real target

Why did deans do it? Because everybody did. Greater transparency risked deterring applicants, which had implications for a school’s U.S. News ranking. Unilateral candor threatened the business model.

Likewise, the rankings methodology has created powerful incentives to maximize spending on expensive new facilities. No ABA accreditation standard requires an established law school to construct a new library. But building one can help to attract applicants, and its added cost boosts the “average expenditures per student” component of a school’s ranking.

Who’s to blame?

Huffman is correct that the ABA has failed the profession. But so have deans who have allowed U.S. News rankings criteria to displace their independent judgment. Rankings have become central to their business models and the youngest generation of lawyers is paying the price.

Some metrics relating to emeritus dean Huffman’s own school prove it:

– At the time of Huffman’s op-ed, the “Admissions” section of Lewis & Clark’s website displayed this headline: “Law school surges in U.S. News & World Report rankings.” The link took the reader to an article about the school’s nine-place jump to 58th in the 2013 edition.

– Full-time tuition and fees at Lewis & Clark currently exceed $38,000 — a 50 percent increase over 2005, when it was around $25,000.

– Lewis & Clark’s annual entries in the 2006 through 2012 ABA Official Law School Guides included employment rates nine months after graduation ranging from 89 to 97 percent. But like most law schools, it achieved those spectacular results using the ABA’s expansive definition of employed. Under the new rules first applicable to the class of 2011, nine months after graduation only 46 percent of Lewis & Clark graduates had full-time long-term jobs requiring a legal degree.

Reality therapy

Huffman’s rhetoric about ABA accreditation requirements as entry barriers that inhibit competition and innovation misses the mark. Allowing schools to experiment with what he calls a “bonanza of legal education alternatives” ignores a harsh reality: There aren’t enough law jobs for the number of graduates that schools already produce, and there won’t be for a long time.

Allowing schools to increase their use of cheaper non-tenured faculty and to offer on-line classes, as Huffman suggests, won’t solve that problem. In fact, absent other necessary reforms, cost reductions leading to lower tuition would likely increase the oversupply of lawyers.

The plethora of deans publishing op-eds in major newspapers presents a new danger. When they Identify false issues and propose ineffectual reforms, they divert needed attention from the real causes of the current crisis. A thorough search for the origins of the lawyer bubble should lead most deans to a painful encounter with a mirror.

That’s an op-ed I’m eager to read.

LAW SCHOOL DISEQUILIBRIUM

It sure seems odd. On January 30, The New York Times reported this year’s dramatic decline in law school applications. A day later, a Wall Street Journal article described the many new schools that are in the works. Economists might call that “market disequilibrium.” More appropriate concepts might be incentivized idiocy and subsidized stupidity. U.S. News rankings incentivize the idiocy; taxpayer dollars subsidize the stupidity.

The WSJ article suggested that some administrators began implementing plans to add law schools “before the current drop [in applicants] became apparent.” However, the two schools in the article, Indiana Tech and the University of North Texas-Dallas College of Law, don’t have that excuse.

Indiana Tech didn’t complete its feasibility study of a proposed new law school until May 2011. The Texas legislature authorized the creation of the UNT-Dallas College of Law in 2009, as the Great Recession deepened. In the 2011-2012 state budget, it earmarked $5 million in funding. The school plans to start classes in 2014.

As for other new schools, what exactly wasn’t apparent when they came to life? Only obvious things that those responsible for creating the schools didn’t want to see.

Follow four numbers

First, from 2003 to 2008, the number of law school applicants dropped steadily — from 100,000 to 83,000. As the Great Recession made law school an attractive place to wait out a dismal economy, total applicants rose to 88,000 before resuming a downward trajectory, perhaps to as few as 54,000 for fall 2013 admission.

Second, in the face of an applicant pool that began shrinking ten years ago, first-year enrollment from 2003 to 2009 remained around 49,000. Refugees from the Great Recession pushed it over 51,000 in 2009 and 2010 before it settled back to 48,700 in 2011.

Third, when these 40,000+ students graduate, there will be full-time legal jobs for about half of them. But that’s not a new development, only a newly disclosed one. To game the U.S. News rankings, law schools have been fudging their employment numbers for years, and they know it.

Finally, at the end of 2003, there were 187 accredited law schools in the United States. Today, there are 201. Attempting to convey the magnitude of the current crisis, University of Chicago Law Professor Brian Leiter told the Times that he expects “as many as 10 schools to close over the next decade.” But over the past ten years alone, the ABA has accredited 14.

What are the lessons?

First, a decline in applications alone doesn’t assure any change in the profession’s errant direction. The real-life experiment from 2003 to 2008 proves that for as long as the number of applicants exceeds the number of available places in law school, academic leaders who think they can make money on law students will continue to build schools.

Second, in an effort to reverse the downward trend in applications, some deans beat the bushes for additional students, even as the job market for their graduates shrinks. Case Western Reserve Law School dean Lawrence Mitchell’s recent op-ed in the NY Times is an example. Another example is an article that Professor Carla Pratt, associate dean of academic affairs at Penn State’s Dickinson School of Law, wrote last September for The National Law Journal: ”Law School Is Still a Good Investment for African-Americans.

Yet another example comes from the UNT-Dallas College of Law. According to the January 31 WSJ article, professor and associate dean for academic affairs Ellen S. Pryor, acknowledges that applications have plummeted, but “the fact that the nationwide numbers are down doesn’t dishearten us from thinking we’ll get really good students and fulfill our mission.”

And what might that mission be? According to the Journal, UNT-Dallas hopes to draw a different pool of applicants than other north Texas law schools. In other words, even undergraduates who never before gave serious thought to law school should prepare themselves for an onslaught of sales pitches.

Limited accountability

Here’s one reason for the profound disconnect: Administrators and deans maintain an unhealthy distance from the economic hardships that their worst decisions inflict on graduates. Federally-guaranteed student loans fuel a system that relieves law schools of financial accountability.

Imagine how the world might change if the government as guarantor had recourse to a student’s law school for that graduate’s subsequent loan default. In the absence of such a market solution, educational debt collection has become a growth industry as law schools avoid the messes they’ve made.

Welcome to The Lawyer Bubble.

THE LAWYER BUBBLE

Case Western Reserve Law School Dean Lawrence E. Mitchell’s recent op-ed in the New York Times proves that, like many law school deans, he is living in a bubble. Indeed, the views he expresses are one reason that I wrote THE LAWYER BUBBLE – A Profession in Crisiswhich Basic Books will publish in April 2013. (Another reason is the troubling transformation of most big law firms, but that’s for another day.)

Mitchell’s spirited defense in “Law School Is Worth the Money” concludes that the “overwrought atmosphere has created irrationalities that prevent talented students from realizing their ambitions.” Apparently, he thinks everyone should just calm down, ignore facts, and keep pushing naive undergraduates into law schools, without regard to what will happen to them thereafter. He’s wrong.

Employment

Mitchell argues that a legal career is no worse choice than any other because the job market is bad in many industries. He notes that the Bureau of Labor Statistics projects growth in the number of lawyers’ jobs from 2010 to 2020 at 10 percent — about as fast as the average for all occupations.

Here’s the thing: that 10 percent growth is for the entire ten years from 2010 to 2020 – a total net increase in the number of lawyer jobs of 73,600. And that number is down from a 2008 BLS estimate of 98,500. As 44,000 new law graduates hit the market each year, law schools are pumping out enough new attorneys for a decade every two years.

Other studies factoring in attrition suggest that, given the mismatch between supply and demand, there might be law jobs for about half of all graduates over the next 10 years. Case Western Reserve, where Mitchell is dean, is typical of mid-range law schools: it’s a fine institution, but according to the ABA, nine months after graduation, only 94 of the 201-member class of 2011 had full-time long-term job requiring bar passage.

Excessive tuition

With respect to the cost of a legal education, Mitchell says that “one report shows that tuition at private law schools has increased 160 percent from 1985 to 2011.” He doesn’t identify his source, but according to the ABA, median private law school tuition in 1985 was $7,385. In 2011, it was $39,496 — a more than 400 percent increase. The rate of increase for resident public law school tuition was far greater. Assuming that he’s adjusting for constant dollars, that’s still a whopping increase.

Then Mitchell compares legal education with medical schools where, even by his calculations, tuition has increased less (63 percent since 1985). But he excuses law school excesses by arguing that medical schools began the period with average tuition four times higher. That’s a false equivalence.

It should cost far less to train a lawyer than a doctor — as it did in 1985. But today it doesn’t. Why not? Because law schools have become cash cows, returning as much as 30 percent of tuition revenues to their universities. Moreover, pandering to U.S. News ranking criteria encourages law school expenditures without regard to value added. Federally guaranteed student loans fuel the system in ways that relieve law schools from meaningful accountability as they glut the market.

Debt

Mitchell dismisses the fact that average law school debt exceeds $125,000 with the cavalier assertion that “the average lawyer’s salary exceeds that number. You’d consider a home mortgage at that ratio to be pretty sweet.” He notes that attorneys’ average starting salaries have increased 125 percent since 1985.

Unfortunately, the average includes only those who actually have lawyer jobs, and it doesn’t consider the fact that, as Above the Law’s Elie Mystal emphasizes often, the average masks the bimodal distribution of attorney income. Thanks to the skewing effect of big law firm compensation (where only 15 percent of lawyers practice), most lawyers earn far less than the industry average. Moreover, median starting salaries for new attorneys have been dropping like a rock — from $72,000 to $60,000 since 2009. Meanwhile, law school tuition keeps going the other way.

Mitchell’s real complaint is probably that prospective law students are finally beginning to see the legal world more clearly and, at long last, the results may be showing up in reduced applications to schools below the top tier. But he need not worry because ongoing market distortions make equilibrium far, far away. In 2012, almost 70,000 prospective lawyers applied for almost 50,000 law school spots — even though there may be legal jobs for only half of them.

Armed with complete information about the challenges and rewards of a legal career, the best and the brightest future lawyers will still enter the profession. They’ll incur six-figure debt that can’t be discharged in bankruptcy because they’ll conclude that the investment is worth the risk — but they’ll consider the risk. Making an informed decision requires them to separate facts from magical thinking. For that, they’re on their own because, as Dean Mitchell reveals, most deans don’t — or won’t.

DEWEY: COLLATERAL DAMAGE

The vast failure of knowledge among the nation’s brightest law students remains remarkable. Their comments in the wake of Dewey & LeBoeuf’s stunning implosion make the point regrettably clear. Even as they become collateral damage to a tragic story that has many innocent victims, some persist in allowing hope to triumph over reality.

The NY Times reported on the 30 second-year law students from the nation’s best schools who thought they’d be earning $3,000 a week as Dewey & LeBoeuf summer associates. They’re now scrambling to find another productive way to fill three months that were supposed to be a launching pad for full-time careers with starting compensation at $160,000 a year.

Idealistic dreams meet harsh reality

One Ivy League student expressed optimism that other firms would step up and offer jobs to the displaced:

“A firm may look like a corporation, yes, but we’re all part of a fraternity of lawyers. Next year one becomes a member of the bar association, a linked structure. The firms may be competitors, but at the end of the day this is still the greater legal field. I hope this sensibility that we are part of a profession will also be in the minds of people as they consider us.”

The article doesn’t say which Ivy League law school the student attends, but it — along with his undergraduate institution — has failed the educational mission miserably. Most large law firms, including Dewey & LeBoeuf, ceased membership in a profession years ago and, during the last decade, that trend has accelerated. A myopic focus on short-term business school-type metrics, two of which are growth and equity partner profits — has taken Dewey and many others down a road to unfortunate places.

Most big firms are no longer “part of a profession” that will step up to offer law students or anyone else a life preserver. If they hire people, such as former Dewey lawyers and staff, it’s because they fit those firms’ own business plans. Another student who thought he had a job at Dewey for the summer got it right: “Now every other program is full, and it’s not like they’re going to adjust their plans to accommodate the failure of this one.”

It’s all connected

Everyone wonders why the number of law school applicants continues to outpace the number of law school openings that, in turn, dwarf the demand for lawyers. One answer is that colleges and law schools don’t educate prospective law students about the daunting challenges ahead. In fact, those institutions have the opposite incentives: colleges want to maximize the placement of their graduates in professional schools because that makes them look good; law schools maximize applicants because it pumps up the selectivity component of their U.S. News & World Report rankings.

Those already in the legal profession are well aware of the true state of affairs. The great disconnect is the failure of information to make its way to prospective lawyers who could benefit most from it. The press has increased its attention to the topics — the glut of lawyers; staggering law school debt that now averages more than $100,000; increasing career dissatisfaction among practicing lawyers.

Of course, ubiquitous confirmation bias will continue to encourage prospective lawyers to see what they want to see as they rationalize that they’ll be the lucky ones running the gauntlet successfully. Some will; too many won’t. The remarks of the Ivy Leaguer who spoke with the Times shows how much work remains for those who truly care about the fate of the next generation — lawyers and non-lawyers alike. There are miles to go before any of us should sleep.

EXPLAINING ABA INTRANSIGENCE

Who are these people?

Recently, the ABA’s Council of the Section of Legal Education and Admission to the Bar rejected an important recommendation of its Special Standards Review Committee. The proposed rule would have required law school-specific disclosure of salary information. No dice, said the Council.

It raises a question that no one seems willing to ask: Who are these Council people, anyway?

Perhaps the Council’s composition is relevant to understanding why it vetoed its own committee’s effort to promote greater candor. In approving a host of other transparency initiatives that have been far too long in coming, the Council stopped short of requiring what might be the most important disclosure of all:

If a student manages to get a job upon graduation, what are the chances that it will pay well enough to cover educational loans, rent, food, and the bare necessities of life?

I don’t know how individual members voted, but their affiliations are interesting. The current chair is dean of the New England School of Law, which has a perennial place in the U.S. News & World Report unranked nether regions. (Regular readers know my disdain for the U.S. News rankings that have transformed deans into contortionists as they pander to its flawed methodology. But as an overall indicator of general quality groups rather than specific ordinal placement, they confirm what most people believe to be true anyway.)

Consider the other academics on the Council. The Chair-elect is also a dean — Washington University School of Law (23rd on the U.S. News list). The Council’s Secretary was dean at the University of Montana School of Law (#145 ). Others deans and former deans on the Council hail from Hamline University Law School (unranked), North Carolina Central University School of Law (unranked), University of Kansas School of Law (#89), University of Miami School of Law (#69), Boston University School of Law (#26). Another member is an associate dean —  University of Minnesota Law School (#19). The remaining academic Council members teach at Drexel University (#119) and Georgetown (#13).

Several other Council members who are not full-time professors have teaching affiliations with, for example, Cleveland-Marshall Law School (#135), University of Utah (#47), and Arizona State University (#26, tied with BU and Indiana University).

Each institution has its share of outstanding faculty and graduates; that’s not the point. But if these or most other schools had to disclose their recent graduates’ detailed salary information, would it make any of them look better to prospective students? Not likely.

The “appearance of impropriety” is an important ethical concept in the legal profession. Any dean or former dean on the Council who voted in favor of salary disclosure should say so. Those who don’t should live with the guilt by association that will accompany adverse inferences drawn from their silence.

Here’s the current Chairman’s spin on the situation: “There should be no doubt that the section is fully committed to clarity and accuracy of law school placement data. Current and prospective students will now have more timely access to detailed information that will help them make important decisions.”

Unless, of course, the information that students seek relates to the incomes they’ll earn after forking over $100,000-plus in tuition and incurring debt that they can’t discharge in bankruptcy.

Also from the ABA statement:

“The Council specifically declined to require the collection and publication of salary data because fewer than 45% of law graduates contacted by their law schools report their salaries. The Council felt strongly that the current collection of such data is unreliable and produces distorted information.”

If a forty-five percent response rate is sufficiently low to throw out data as unreliable because it produces distorted information, what does that say about U.S. News‘ survey used to calculate almost one-seventh of every law school’s 2013 ranking? The response rate for its “assessment by lawyers/judges” component was twelve percent.

I know, I know: “A foolish consistency is the hobgoblin of little minds.” (Emerson, R.W.,”Self-Reliance,” First Essays, 1841)

WORSE THAN CHEATERS

Scandals involving schools of higher education lying to enhance their U.S. News rankings seem to be appearing more frequently. The most recent confession came from Claremont McKenna College. Its false numbers helped make it the ninth-best liberal arts college in the country. As usual, the school’s top leader blamed a rogue player instead of acknowledging a pervasive problem: deference to idiotic metrics has displaced reasoned judgment and the resulting institutional culture promotes predictable behavior.

Some difficulties flowing from U.S. News rankings methodology make the news. Like other recent instances of misreported data, the focus on Claremont relates to false admissions statistics, namely, SATs. At the University of Illinois College of Law, it was LSATs and GPAs.

Of course, such behavior is reprehensible. But do the rogue villains differ more in degree than in kind from deans who game the system? Some solicit transfer students whose low LSATs led to their rejection as entering one-Ls, but whose scores don’t count when they arrive as tuition-paying 2-Ls. Like the rogues, they seek to boost selectivity scores as measured by LSATs and undergraduate GPAs that comprise more than 20 percent of a law school’s total U.S. News ranking.

Similarly, employment rates at graduation and nine months later account for 18 percent of a law school’s ranking. That encourages deans to hire their own graduates for short-term projects and — until recent ABA revisions become fully effective — permits them to count every part-time, non-legal job as employment.

Expenditures per student account for about 10 percent of a law school’s score. That encourages deans to spend more money and increase tuition to cover the resulting costs while students incur more debt. The resulting vicious circle exacerbates intergenerational antagonisms that are rapidly becoming the legal profession’s — and society’s — next big crisis.

All of the recent attention about bogus admissions and placement numbers shines an important light on some dirty little corners of academia. But more profound rankings methodology problems have gone unnoticed. Specifically, selectivity and placement factors combined barely equal the weight that the ranking system gives to “Quality Assessment” — which accounts for 40 percent of a school’s overall score.

How does the U.S. News perform ”Quality Assessment”? Two ways.

First, it sends out surveys to four individuals at all accredited law schools throughout the country: dean, dean of academic affairs, chair of faculty appointments, and the most recently tenured faculty member. The survey asks each recipient to rate all other schools on a scale from marginal (1) to outstanding (5). It doesn’t require that any respondent have any knowledge about any of the 190 schools that he or she rates. (Respondents have a “don’t know” option, but U.S. News doesn’t disclose how many used it. After all, that information would taint its misleading 66 percent response rate.)

A second assessment score comes from lawyers and judges. They, too, get the U.S. News survey asking for (1) to (5) responses about every school. Apart from 750 hiring partners and recruiters at law firms who made the newly developed U.S. News-Best Lawyers list of “Best Law Firms,” information about the “legal professionals, including hiring partners of law firms, state attorneys general, and selected state and federal judges” receiving the survey isn’t disclosed. But the anemic response rate is: 14 percent. One can reasonably ask why such flawed attempts at “quality assessment” should count at all.

One answer is that eliminating them would magnify the importance of the other factors, including test scores. In that respect, there’s a curious aspect of the recent NY Times article about Claremont’s false SATs. It quoted Robert Franek at length. Franek is senior vice president of The Princeton Review, a test-preparation business that has flourished as a principal benefactor of the U.S. News rankings mania.

The Princeton Review does rankings, too. Anyone who regards its list of law schools with the “Best Career Prospects” as meaningful should take a look at the top five for 2012 and ask, “Where are Harvard, Yale and Stanford?”

And then there’s The Princeton Review‘s original October 12, 2010 press release (subsequently revised) that announced the 2011 winner in the “Best Law School Professors” category: Brown.

Brown, of course, doesn’t have a law school.

UNFORTUNATE COMMENT AWARD

Today’s “Unfortunate Comment Award” winner is ABA President William (“Bill”) Robinson III, who thinks he has found those responsible for the glut of unemployed, debt-ridden young lawyers: the lawyers themselves.

“It’s inconceivable to me that someone with a college education, or a graduate-level education, would not know before deciding to go to law school that the economy has declined over the last several years and that the job market out there is not as opportune as it might have been five, six, seven, eight years ago,” he told Reuters during a January 4 interview.

Which year we talkin’ ’bout, Willis?

Recent graduates made the decision to attend law school in the mid-2000s, when the economy was booming. Even most students now in their third year decided to apply by spring 2008 — before the crash — when they registered for the LSAT. Some of those current 3-Ls were undergraduates in the first-ever offering of a course on the legal profession that I still teach at Northwestern. What were they thinking? I’ll tell you.

I’ve written that colleges and law schools still make little effort to bridge a pervasive expectations-reality gap. Anyone investigating law schools in early 2008 saw slick promotional materials that reinforced the pervasive media image of a glamorous legal career.

Jobs? No problem. Prospective students read that for all recent graduates of all law schools, the overall average employment rate was 93 percent. They had no reason to assume that schools self-reported misleading statistics to the ABA, NALP, and the all-powerful U.S. News ranking machine.

But unlike most of their law school-bound peers, my students scrutinized the flawed U.S. News approach. Among other things, they discovered that employment rates based on the ABA’s annual law school questionnaire were cruel jokes. That questionnaire allowed deans to report graduates as employed, even if they were flipping burgers or working for faculty members as temporary research assistants.

Law school websites followed that lead because the U.S. News rankings methodology penalized greater transparency and candor. In his Reuters interview, Robinson suggested that problematic employment statistics afflicted “no more than four” out of 200 accredited institutions, but he’s just plain wrong. Like their prospective students, most deans still obsess over U.S. News rankings as essential elements of their business models.

The beat goes on

With the ABA’s assistance, such law school deception continues today. Only last month — December 2011 — did the Section on Legal Education and Admission to the Bar finally approve changes in collecting and publishing law graduate placement data: Full- or part-time jobs? Bar passage required? Law school-funded? Some might consider that information relevant to a prospective law student trying to make an informed decision. Until this year, the ABA didn’t. The U.S. News rankings guru, Robert Morse, deferred to the ABA.

The ABA is accelerating the new reporting process so that “the placement data for the class of 2011 will be published during the summer of 2012, not the summer of 2013.” That’s right, even now, a pre-law student looking at ABA-sanctioned employment information won’t find the whole ugly truth. (Notable exceptions include the University of Chicago and Yale.) Consequently, any law school still looks like a decent investment of time and money, but as Professor William Henderson and Rachel Zahorsky note in the January 2012 issue of the ABA Journal, it often isn’t.

Students haven’t been blind to the economy. But bragging about 90+ percent employment rates didn’t (and doesn’t) deter prospective lawyers. Quite the contrary. Law school has long been the last bastion of the liberal arts major who can’t decide what’s next. The promise of a near-certain job in tough times makes that default solution more appealing.

Even the relatively few undergraduates (including the undergraduates in my class) paying close attention to big firm layoffs in 2009 were hopeful. They thought that by the time they came out of law school, the economy and the market for attorneys would improve. So did many smart, informed people. Youthful optimism isn’t a sin.

Which takes me to ABA President Robinson’s most telling comment in the Reuters interview: “We’re not talking about kids who are making these decisions.”

Perhaps we’re not talking about his 20-something offspring, but they’re somebody’s kids. The ABA and most law school deans owed them a better shake than they’ve received.

It’s ironic and unfortunate: one of the most visible spokesmen in a noble profession blames the victims.

TROUBLE IN TEXAS

Last month, University of Texas President Bill Powers asked his law school dean, Larry Sager, to resign early — months ahead of his originally planned departure at the end of the academic year. According to the Texas Tribune, Sager’s relationship with the faculty “had become so strained that he was no longer able to serve effectively.” One source of discord was faculty compensation.

The story became more interesting with news that the law school’s foundation – a private non-profit group run by alums and distinguished attorneys — had given Sager a $500,000 “forgivable loan” in 2009. It got juicier when Powers said, “I don’t remember ever being told about the loan to Dean Sager, and that’s the sort of thing I would remember.”

He said — he said

Sager counters with his “clear memory” that Powers knew about the loan, but then distances himself from the foundation’s action: “Whatever else is true about the loan, the decision was made by the president of the foundation, the executive committee of the foundation and the trustees of the foundation as a whole. I would not and could not have dictated this outcome.”

So who determines compensation at the University of Texas School of Law?

The Texas Tribune notes that one of the foundation’s top donor-trustees, Steve Susman (an outstanding attorney) explained the foundation’s laudable purpose:

“If the law school is going to remain just a state law school supported by state money, I think it’s going to drop to being a very mediocre law school. The reason this law school has always been a great law school is because it has always gone to its alumni and said, ‘We need you in it.’”

But that defense is irrelevant to the current controversy. Many colleges and universities have alumni organizations that raise money. Sometimes they solicit for particular causes or programs. No problem. But the UT foundation’s funds apparently became part of a dean’s compensation package and the university’s president claims not to know how or why.

Who’s in charge?

In a lengthy letter to the faculty (downloadable at the Texas Tribune article link), Sager explains that, after becoming dean in 2006, he tried to raise UT’s stature by luring talent from other schools while resisting raids on UT’s. Without naming the foundation, he says that “loan arrangements have come from monies that have been raised and expressly endowed for academic excellence.” He also notes that he “raised the bulk of these funds – which total more than $10 million — for exactly the purpose of recruiting and retaining faculty.”

From there, things get curioser and curioser. Sager’s letter describes university-wide austerity budgets that constrained law school salaries. Meanwhile, according to the school’s response to an Open Records Request, the $500,000 Sager received in May 2009 was by far the biggest of 22 loans made between May 15, 2006 and September 15, 2011. His letter doesn’t mention it.

President Powers says he didn’t know anything about Sager’s loan. Sager says that Powers knew and the loan was recognition for a job well-done, but his reward was a “foundation decision.”

It’s a Texas-sized mess. From the Texas Tribune:

“The day after Sager’s resignation, UT Chancellor Francisco Cigarroa issued a statement calling for a review of how funds flow to the Law School from the Foundation, how these decisions are made,’ in order to ‘enhance processes, procedures and controls for those transactions in the future.’ Cigarroa said the review’s findings would help establish ‘clear and transparent guidelines’ for all UT institutions and affiliated foundations.”

Before rejoicing at this hint of leadership from above, read on:

“A spokesman for the UT System said that while the chancellor has no direct authority over faculty compensation at the law school, he wants to make sure everything is being done in an appropriate fashion.” Atop the UT System sits a Board of Regents, which the governor appoints and the state senate confirms.

All of this leads to two questions: First, who decides whether things are “being done in an appropriate fashion” and, second, who’s responsible for changing things that aren’t?

After Penn State, university trustees and regents everywhere should be pondering those questions. The answers are important — and they’re in the mirror.

INFLATED PPP?

Recently, the Wall Street Journal broke the story, but it’s not new. Five years ago, The American Lawyer‘s then editor-in-chief Aric Press posed this question after hearing about presentations that Citi Private Law Firm Group was making to big firm managers (I’m paraphrasing):

Were law firms providing his magazine with financial information different from what they told their bankers at Citigroup?

In 2006, Press thought not: “The American Lawyer’s report of profits per partner is essentially the same as Citi’s for 47 percent of the firms to which [Citi] has access. For another 22 percent, the difference is 10 percent or less.”

In other words, 69 percent consistency (i.e., within 10 percent) between Am Law and Citi data — and that’s before reconciling their different definitions of equity partner.

On August 22, 2011, the Journal headline read “Law Firms’ Profits Called Inflated” — a supposedly new scandal: ”[A]ccording to the person briefed on Citi’s [latest] analysis, in addition to about 22% of the top 50 firms overstating their 2010 profits per partner by more than 20%, an additional 16% inflated their numbers by 10% to 20%. An additional 15% of the firms had profits-per-partner figures that were inflated by 5% to 10%….”

In other words, 62 percent consistency (within 10 percent), again before appropriate reconciliations.

For Citi’s latest sample size of 50, that’s a swing of three law firms.

Of course, no firm should inflate its Am Law PPP, but a few always have. In his 2006 article, Press wondered why. I think it’s because some metrics assume an unsavory life of their own. In that way, Am Law PPP functions similarly to U.S. News law school rankings. Even when the underlying numbers are accurate, relying on the metric to make important decisions can lead to unfortunate behavior.

Pandering to idiotic U.S. News criteria results in dubious practices that discredit the overall result: recruiting previously rejected applicants who went to other schools, but whose LSATs don’t count if they arrive as tuition-paying 2L transfer students; using post-graduation employment rates that don’t distinguish between full- and part-time positions, or jobs requiring a legal degree and those that don’t; awarding first-year scholarships to students with high GPAs and LSATs, only to crush them with mandatory grading curves that impose forfeiture for years two and three.

A similar devotion to misguided metrics dominates many firms. In the 2008 Am Law 100 issue, Press observed: “[P]rofits-per-partner [is] the metric that has turned law firm managers into contortionists…” Maximizing PPP means equity partners squeezing more billables out of everybody, raising rates, and “pulling up the ladder behind them.”

Reliance on misguided metrics isn’t unique to the legal profession. What starts as teaching to a test sometimes culminates in cheating to get higher scores — with middle school instructors at the center of alleged wrongdoing. But catching attorneys in this particular lie is more difficult than finding common erasures for a classroom of standardized test-takers. Like law schools that self-report their information to the ABA (and U.S. News), private law firms submit whatever they want to The American Lawyer. Recipients can’t verify what they get.

However, Citigroup is a lender to law firms and “independently reviews many law firms’ financial performance,” according to the Journal. The WSJ had a story only because Citi entertained an audience of big law chairmen and managing partners with discrepancies between actual law firm profits and what the firms reported for public consumption. I wonder if the bank tried to reconcile its own clients’ apparent discrepancies before highlighting what the WSJ now depicts as a pervasive scandal.

Legal consultant Jerome Kowalski urges firms to stop reporting PPP, as Orrick, Herrington & Sutcliffe LLP announced it would last year. That’s unlikely, but meanwhile, the real travesty is that the liars go unidentified. Inflating profits for Am Law is a hubristic finger in the eyes of a firm’s client.

Maybe clients have no right to care what their lawyers make, as Adam Smith, Esq. argues in a recent blog post. But the unavoidable fact is that many do. From their perspective, the truth would have been bad enough. A few firms goosing their seven-figure PPP averages even higher make all firms look worse, not better.

LAW SCHOOL NON-LEADERSHIP

Disenchanted alumni have filed two more class actions against their law schools. In addition to Thomas Jefferson School of Law, Thomas M. Cooley Law School and New York Law School are now defending their former students’ fraud claims. NYLS said the claims were without merit and would defend against them in court. Cooley, the largest law school in the country, is pursuing a more aggressive strategy that earns it this closer look.

Cooley was founded in 1972 by now-retired Michigan Supreme Court Chief Justice Thomas E. Brennan. In 1996, dissatisfied with the subjectivity of U.S. News rankings methodology that, coincidentally, placed Cooley in its unranked lower tiers, Brennan began publishing his own recompilation of the ABA’s data. The latest edition appears on the school’s website. In it, Cooley’s overall ranking is #2. Harvard is #1; Yale is #10; Stanford is #30; and the University of Chicago is #41. (Exploring the different subjective judgments that underlie Brennan’s alternative system must await another day.)

Cooley’s 2010 graduate employment rate was 78.8% – 181st out of 193 accredited law schools on Justice Brennan’s latest list. The question that has morphed into litigation is what that rate means.

Kurzon Strauss LLP represents the plaintiffs in both of the latest suits. According to the Wall Street JournalCooley recently sued that firm “for propagating purportedly defamatory ads on the websites Cragislist and Facebook about the school. The postings were part of the law firm’s investigation into how law schools report employment statistics, according to firm partner Jesse Strauss.” Cooley also filed a separate defamation suit against four anonymous bloggers.

But escalation can amplify unwanted publicity; publicity creates the potential for visible missteps. Based on the Journal‘s report, I think Cooley made one:

“Jim Thelen, Cooley’s general counsel, said that if any of the plaintiffs or their attorneys has issue with how law schools report employment numbers, then they ought to take it up with the American Bar Association, which helps set criteria for collecting data, or even the Department of Education — but not with individual law schools. ‘These are nothing other than attempts to bring public attention to this issue,’ Mr. Thelen said.”

Actually, this is a double misstep, proving that sometimes the best comment is none at all. First, using the answers that Cooley and every other school provide to the ABA’s annual law school questionnaire may be today’s catchy sound bite, but it’s tomorrow’s dubious long-term strategy. The ABA doesn’t cash students’ tuition checks; their law schools do. Telling the world that unemployed graduates should take their concerns about the quality of post-graduation employment data elsewhere should send an unsettling message to any pre-law student who is listening.

Second, many litigants seek publicity; calling them out isn’t a defense — or particularly attractive. Attorneys tend to forget that lay audiences quickly develop a “The lady doth protest too much, methinks” reaction to lawyers’ public relations efforts. In fact, a non-lawyer who hears Thelen’s remarks could well wonder, “Well, why are they trying to bring public attention to the issue? Is there a problem?”

The underlying concern — assessing the quality of graduate employment rate data  – isn’t unique to Cooley. Deans who understand the serious flaws in the ABA-required reporting methodology should have exposed them long ago, just as the NY Times finally did earlier this year. That most awaited the ABA’s recent directive on this topic evidences a pervasive failure of leadership. The ABA’s annual questionnaire has never prevented any school from doing more to inform prospective students, such as telling them who among their reportedly employed graduates have full-time jobs or positions requiring a legal degree.

Then again, lawyers and former judges run law schools. Sure, disgruntled students who incur enormous educational debt to get their degrees may claim to have been misled. But the defenses will always be many and the odds against certifying consumer fraud claims will forever be daunting. Beat the class and the case usually goes away.

On the other hand, if Dr. King was right that “the arc of the moral universe is long but it bends toward justice,” some law schools may discover that their public comments ring hollow and their short-term victories are pyrrhic.

PRACTICAL SKILLS

A few days after the Bureau of Labor Statistics announced the loss of another 2,600 legal jobs in June, the Wall Street Journal ran “Law Schools Get Practical.” Some schools are changing curriculum to develop skills that real lawyers need; that makes sense. But some hope that more big law positions for graduates will result; that is magical thinking.

Reconsidering legal education is important. The first year teaches students to think like lawyers; the second year covers important substantive areas. To deal with the universally maligned third year, Stanford is considering a clinical course requirement involving 40-hour plus weeks of actual case work, while Washington and Lee University of Law School replaced lectures and seminars with “case-based simulations run by practicing lawyers.”

Meanwhile, Harvard has updated its curriculum significantly in recent years. Indiana University Maurer School of Law teaches “project management” and “emotional intelligence.” NYU offers courses in “negotiation” and “client counseling.” Some innovations are more valuable than others, but no one should think that improved job prospects will result.

The article quoted a recruiter at McKenna, Long & Aldridge LLP who said that clients weren’t willing to pay for new lawyer training. Likewise, Xerox’s general counsel described his company’s policy of not paying for first-year associates. The implication is that if new graduates received more practical training in school, clients would pay for them and hiring would increase. Not a chance.

First, new associates in large firms don’t need the practical skills that most law schools are promoting. If there were courses on “maximizing billable hours,” “withstanding unreasonable partner demands,” or “surviving a culture of attrition where fewer than ten percent of new associates will become equity partners,” that would be one thing. But document review, due diligence undertakings, and other mundane tasks that consume most big law associates’ early years don’t require much special training. Some don’t even require a law degree. Xerox — and many other companies sharing its dim view of first-year associate value — won’t start paying for young attorneys just because they have taken the new courses.

Second, average equity partner profits for the Am Law 100 have moved steadily upward over the last decade — to over $1.3 million in 2010. If those firms are already “suffering” from client resistance to paying for new associates, partners nevertheless seem to be thriving financially.

Finally, when asked whether current law school innovations will help students land jobs, Timothy Lloyd, chair of Hogan Lovells recruiting committee, told the Journal:

“It could enhance the reputation of the law school…as places that will produce lawyers who have practical skills. As to the particular student when I’m interviewing them? It doesn’t make much of a difference.”

Bingo. As a big law interviewer myself, I looked for intelligence, personality, and potential. Specific courses didn’t matter. Assessing candidates was and is subjective but, to adapt Justice Stewart’s pornography test, I usually knew a good one when I saw one.

Schools should expand clinical programs, but not because such student credentials matter to large firm recruiters. They don’t. However, those who don’t get big law jobs really need practical lawyering skills. Do it for them — the vast majority of today’s 50,000 annual graduates.

Schools should modernize curriculum, but not to become business school knockoffs for big law. That’s a mistake.

Even more urgently, schools should educate prospective attorneys more fully about the big law path — from the challenge of getting a job to the unforgiving billable hours culture to the elusive brass ring of equity partnership. (See, e.g., The Partnership)

That would be real reform, but at most place it won’t happen. Yale’s cautionary memo about the real meaning of 2,000 billable hours a year and Stanford’s “Alternatives to Big Law” series that compliments its outstanding student loan forgiveness program are hopeful beginnings. But such candor runs counter to the enticing big firm starting salaries that pervade law school websites aimed at the next generation of would-be lawyers. After all, their student loans pay the bills.

TRUTHINESS IN NUMBERS

Two recent developments here and across the pond share a common theme: ongoing confusion about young attorneys’ prospects. But the big picture seems clear to me.

Last month, I doubted predictions that the UK might be on the verge of a lawyer shortage. I expressed even greater skepticism that it presaged a similar shortfall in the United States. In particular, College of Law issued a report suggesting that an attorney shortage could exist as early as late 2011 and “may jump considerably in 2011-2012.”

This came as a surprise because the UK’s Law Society has warned repeatedly about the oversupply of lawyers in that country. Why such dramatically different views of the future?

Some commenters to an article about the College of Law report suggested that perhaps the study hadn’t taken into account the existing backlog of earlier graduates who, along with young solicitors laid off in 2008 and 2009, were still looking for work.

Another explanation may be that the College of Law and its private competitors, including Kaplan Education’s British arm, wants to recruit students to their legal training programs. Sound familiar?

The following is from the College of Law website:

“84% of our LPC graduates were in legal work just months after graduation.*”

But mind the asterisk: “*Based on known records of students successfully completing their studies in 2010.”

I wonder who among their students isn’t “known.” As for “legal work,” a recent former UK bar chairman observed that the oversupply of attorneys in that country has driven many recent LPC graduates into the ranks of the paralegals. Digging deeper into the College of Law’s 84 percent number yields the following: 62 percent lawyers; 22 percent paralegals “or other law related.” At least the College appears to be more straightforward than American law schools compiling employment stats for their U.S. News rankings.

That takes me to the recent ABA committee recommendation concerning employment data here. U.S. News rankings guru Robert Morse has joined the ABA in assuring us that help is on the way for those who never dreamed that law schools reporting employment after graduation might include working as a greeter at Wal-Mart. Morse insists that if the schools give him better data, he’ll use it.

It’s too little, too late. Employment rate deception is the tip of an ugly iceberg comprising the methodological flaws in the rankings. For example, employment at nine-months accounts for 14 percent of a school’s score; take a look at the absurd peer and lawyer/judges assessment criteria, which count for 40 percent. Res ipsa loquitur, as we lawyers say.

Frankly, I’m skeptical about the prospects for progress even on the employment data front. Until an independent third-party audits the numbers that law schools submit in the first place, their self-reporting remains suspect. No one in a position of real professional power is pushing that solution.

Meanwhile, back in the UK, Allen & Overy — a very large firm – announced its “second round of cuts on number of entry level lawyers hired” — from the current 105 London training contracts down to 90 for those applying this November.  The article concluded:

“The news comes after the latest statistical report from the Law Society highlighted the oversupply of legal education places compared with the number of training contracts in the UK legal market. The number of training contract places available fell by 16% last year to 4,874 and by 23% from a 2007-08 peak of 6,303.”

So much for the College of Law’s predictive powers. Prospective lawyers in the UK are probably as confused as their American counterparts when it comes to getting reliable information about their professional prospects. Most students everywhere assume that educational institutions have their best interests at heart.

If only wishing could make it so.

FAMILY FRIENDLY?

Lawyers know that definitions dictate outcomes. That’s why the Yale Law Women’s latest list of the “Top Ten Family Friendly Firms” includes some surprising names. At least, some surprised me.

It turns out that the YLW’s definition of family friendly is more restrictive than the plain meaning of the words. According to the survey methodology, it’s mostly a function of firms’ attention to particular issues relating primarily to women. There’s nothing wrong with that, but it shouldn’t be confused with what really undermines the family-friendliness of any big firm — its devotion to billable hours and billings as metrics that determine success. That problem isn’t gender-specific.

To compile the annual list, YLW surveyed the Vault Top 100 Law Firms. What would happen if they included all of the NLJ 250 or an even larger group that included small firms? I don’t know, but I’ll bet the list would look a lot different.

Now consider the survey categories and YLW commentary:

– Percentage of female attorneys: “Although YLW found that, on average, 45% of associates at responding law firms are women, women make up only 17% of equity partners and 18% of firm executive management committees. Additionally, on average, women made up just 27% of newly promoted partners in 2010.”

– Access to and use of parental leave: Virtually all firms have them. Big deal.

– Emergency and on-site child care: I understand the advantages, but how much family friendly credit should a firm get for providing a place where young lawyers can leave their babies and pre-schoolers while they work all day?

– Part-time and flex-time work policies: “98% offer a flex-time option, in which attorneys bill full-time hours while regularly working outside the office.” So what? I know senior partners without families who’ve done that for years.

– Usage of part-time and flex-time policies: “On average, 7% of attorneys at these firms were working part-time in 2010.” Will they become equity partners? “Of the 7% of attorneys working part-time, only 11% were partners, a number that may also include partners approaching retirement. Only 5% of the partners promoted in 2010 had worked part-time in the past, on average, and only 4% were working part-time when they were promoted.”

– Billable hours and compensation practices: “[I]t remains to be seen whether it is truly possible to work part-time at all. Our statistics indicate that while part-time attorneys appear to be fairly compensated, many may work more hours than originally planned. Most firms (93%) provide additional compensation if part-time attorneys work more than the planned number of hours or make part-time attorneys eligible for bonuses (96%). However, part-time attorneys received bonuses at higher rates than full-time attorneys (25% compared to 23% on average), suggesting that many part-time schedules may ultimately morph into full-time hours over the course of a year.”

– Alternative career programs: What’s that? Outplacement support?

All of this gets weighted according to another survey of Yale Law School alumni who ranked the relative importance of the surveyed policies and practices.

Continuing efforts to achieve greater big law transparency are laudable. But one problem with lists and rankings is that they take on a life of their own, wholly apart from methodological limitations and the caveats accompanying the results. (See, e.g., U.S. News rankings). Here, the YLW cautioned that it “remains concerned about the low rates of retention for women, the dearth of women in leadership positions, the gender gap in those who take advantage of family friendly policies, and the possibility that part-time work can derail an otherwise successful career.”

The honored firms will gloss over that warning, issue press releases, and delude themselves into believing that they are something they’re not. Someone truly interested in whether a place is family friendly should find out where it ranks on the “Misery Index.” Partners won’t tell you, but that metric would reveal a firm’s true commitment to the long-term health and welfare of its attorneys and their families.

If you really love someone, you should set them free — even if it’s only every other weekend.

LAW SCHOOL DECEPTION — PART III

Money talks, especially to prospective law students concerned about educational debt. Tuition reduction programs promise some relief. Surely, scholarships conditioned on minimum GPAs are better.

Recently, the NY Times profiled a Golden Gate University School of Law student needing a 3.0 to keep her scholarship. By the end of her first year, she’d “curved out” at 2.967. Her Teamsters dad drove a tractor before he was laid off, but she and her parents came up with $60,000 in tuition to complete her degree.

Maybe that’s reasonable. A “B” average doesn’t seem difficult. Is this just whining from what some article comments called “the gimme generation”?

Only if the victims knew the truth. She has no paying job, legal or otherwise. That’s her true victimization, along with many others.

– Statistically possible v. doesn’t happen v. fully disclosed

Golden Gate imposes mandatory first-year curves limiting the number of As and Bs. In second and third year courses, the curves loosen or disappear. The profiled student graduated with a 3.14 GPA — a nice recovery, but too late for the lost scholarship.

According to the article, more than half of the current GGU first-year class has merit scholarships and Dean Drucilla Stender Ramey said it’s statistically possible for 70 percent of one Ls to maintain a 3.0 GPA — also the threshold for the Dean’s List. Even if she meant “theoretically” rather than “statistically” possible, I’m skeptical. The school’s handbook reports the mandatory range for those receiving a “B- and above” in first-year required courses: 45 percent (minimum) to 70 percent (maximum). And a B- is 2.67.

“[I]n recent years,” the article continued, “only the top third of students at Golden Gate wound up with a 3.0 or better, according to the dean…. She also maintains that Golden Gate 1Ls’s are well-informed about the odds they face in keeping scholarships.”

This sounds like the lawyer who tells the jury: 1) my client was out of town at the time of the murder; 2) if he was in town, he didn’t do it; and 3) whatever he did was in self-defense.

– Playing with fire

Why offer merit scholarships? U.S. News‘s rankings, says University of St. Thomas School of Law Professor Jerry Organ:

“Law schools are buying…higher GPAs and LSATs.”

Albany Law School Dean Thomas F. Guernsey notes that such catering to the rankings has “strange and unintended consequences,” such as reducing need-based financial aid by redirecting it to those who otherwise “will go somewhere else.”

U.S. News doesn’t collect merit scholarship retention data because, according to rankings guru Robert Morse, “[W]e haven’t thought about it…[T]hese students are going to law school and they need to learn to read the fine print.”

That’s among the least of many profound flaws in the U.S. News methodology. Law school deans know them all, yet pandering to the rankings persists while students and the profession pay the price.

Somewhere in the cumulative behavior of certain schools lies an interesting class action. Particularly vulnerable are recruiters operating at the outer limits of candor to attract students who accumulate staggering loans and no jobs.

Imagine forcing some deans to answer these questions — under oath:

– Where did you go to law school? (That’s foundational — to show they’re smart; for example, GGU’s Dean Ramey graduated from Yale.)

– How many graduates did you put on your school’s temporary payroll solely to boost your U.S. News “nine months after graduation” employment rate? (I don’t know about GGU, but others have.)

– How many have full-time paying jobs requiring a JD? (GGU’s nine-month employment rate is 87.2% of 143 “reporting” 2009 graduates, but the “number with salary” is only 41 (or 29%). Two-thirds of “reporting graduates” had jobs requiring bar passage; only half held permanent positions. And who’s not “reporting”?)

– How many merit recipients lose scholarships? What did you tell those hot prospects when you enticed them with first-year money? Ultimately, how much did they pay for their degrees?

Ironically, even bold typeface disclosure might not change some prospective students’ minds because facts yield to confirmation bias. Convinced that they’ll overcome daunting odds to become winners, they can’t all be right.

Still, the potential class of law student plaintiffs grows by the thousands every year. If they ever file their lawsuit, the defendant(s) better get good lawyers.

A NEW LAW SCHOOL MISSION

What ails the profession and is there a cure?

If you haven’t already seen it, you might want to take a look at Part I of my article, “Great Expectations Meet Painful Realities,” in the Spring 2011 issue of Circuit Rider. My latest contribution to the debate on the profession’s growing crisis begins on page 24 of the Seventh Circuit Bar Association’s semi-annual publication.

Part II begins at page 26 of the December 2011 issue.

DEBT LOADING

The University of Virginia Law School has offered its unemployed 3Ls stipends to defray the cost of bar application fees ($500) and bar exam prep courses ($1500). This follows a protest during admitted students weekend when some UVA students wore (and sold) T-shirts saying, “$40,000 a year and no jobs.” Of course, such public turmoil is the tip of a mammoth iceberg that isn’t limited to UVA.

The absence of jobs — even for graduates of top schools — is especially dire because repayment of educational loans typically begins when higher education ends. The collateral damage of such debt can persist for generations. As one analyst recently told the NY Times, “A lot of people will still be paying off their student loans when it’s time for their kids to go to college.” According to the same Times article, last year’s college graduates left school with $24,000 in debt.

For those moving on to law school, $24,000 soon looks like the good old days. The 2009 Law School Survey of Student Engagement reported this stunner:

“The percentage of full-time U.S. students expecting to graduate owing more than $120,000 is up notably in 2009…29% of students expect to graduate with this level of debt.” Almost half of all law students expect to cross the $100,000 debt threshold before getting their degrees.

Here’s the disconnect: according to the Bureau of Labor Statistics, the median salary for all lawyers nine months after graduation is $68,500. Try servicing $120,000+ debt on that budget. Average compensation for all attorneys in the United States is $129,000 a year.

Why the gap between investment and reward? A better question is, why not? The BLS numbers don’t appear in law school recruiting brochures that are more likely to tout big law’s $160,000 starting salaries. Nor do they disclose the downside that comes with those high-paying jobs.

Likewise, most schools don’t report meaningful employment data, either. When they collectively tell U.S. News that the most recent average employment rate nine months after graduation is 93%, something is amiss — like the fact that employed can mean being a greeter at Wal-Mart or flipping burgers at McDonald’s. In an insightful new article, Professor Paul Campos calculates the true rate — graduates with full-time legal jobs nine months out — to be well under 50%.

Revealing the truth would almost certainly drive down applications, compromise U.S. News rankings, and threaten law schools’ bottom lines. That might force many deans to reconsider what they’re doing to their own students. Too many administrators hide behind rhetoric — “free choice,” “markets work,” and “students should take personal responsibility” — as excuses to disregard their own roles as the profession’s most important fiduciaries. When ignorance and misinformation reign, choices are distorted and markets don’t work. I often wonder if law school deans who have kids the same age as those they’re duping behave differently from the rest. Or do they fault students’  ”failure to take responsibility,” too?

My article, “Great Expectations Meet Painful Realities,” appearing in the current issue of the Seventh Circuit Bar Association’s semi-annual publication, Circuit Rider has more on this (starting at page 24).

Fraud can be overt — by commission — or it can occur by omission when there’s a duty to speak. Revealing good facts can create an obligation to disclose the bad ones. Greater candor won’t stop the flow of talented applicants to law schools. Nor should it. The legal profession is still a noble calling. But it has also become a way for some educational institutions improperly to persuade the next generation to mortgage its own future — literally.

Some call it the next big bubble. If it bursts, I’m not sure what that will mean. Because of statutory revisions in 2005, bankruptcy doesn’t discharge student loan debt unless the difficult “undue hardship” test is met. The era of big bailouts has passed, so that’s an unlikely solution as well.

Perhaps we’ll see a new growth industry in the revival of an ancient concept: debtors prisons. Law school deans who lost sight of their true obligations to their students and their profession should run them — without pay.

MIRED IN METRICS? HAVE SOME MORE!

Once a bad situation spins out of control, is there any way to corral it? When all else fails, try making things worse.

The ABA recently released its report detailing just a few of the ways that U.S. News law school rankings have been counterproductive for prospective lawyers and the profession — from driving up the costs of legal education to driving down the importance of diversity.  (http://www.abanet.org/legaled/nosearch/Council2010/OpenSession2010/F.USNewsFinal%20Report.pdf)

As U.S.News now develops law firm rankings, the report concludes with an ominous warning:

“Once a single rankings system comes to dominate a particular field, it is very difficuly to displace, difficult to change and dangerous to underestimate the importance of its methodology to any school or firm that operates in the field. This, we believe, is the most important lesson from the law school experience for those law firms who may be ranked by U.S. News in the future.”

In other words, rankings sometimes function as any so-called definitive metric: They displace reasoned judgment. Independent thought becomes unnecessary because the methodology behind the metric dictates decision-makers’ actions.

Since 1985, many big firms have become living examples of the phenomenon. That year, The American Lawyer published its first-ever Am Law 50 list of the nation’s largest firms. Most firm leaders now teach to the Am Law test, annually seeking to maximize revenues and average profits per equity partner. The resulting culture of billings, billable hours, and associate/partner leverage ratios begins to explain why surveys report that large firm lawyers lead the profession in career dissatisfaction.(http://www.abajournal.com/magazine/article/pulse_of_the_legal_profession/print/) Without a metric for it, attorney well-being – and the factors contributing to it — drop out of the equation.

Courtesy of U.S. News, large firms now stand on the threshhold of more metrics. Will they make working environments of firms that have succcumbed to the profits-per-partner criterion worse?

It depends, but more of yet another bad thing — rankings – could produce something good — forcing individuals to sift through contradictory data, think for themselves, and make a real decision. But that can happen only if U.S. News produces a list of “best law firms” that bears little resemblance to the rank ordering of the Am Law 100 in average equity partner profits. Such contradictory data would confuse newly minted attorneys and force them to develop their own criteria for decision.

The American Lawyer itself provides a useful example of the possibilities. Eight years ago, it began publishing the Am Law “A-List,” which has gained limited traction as a moderating influence on the Am Law average profits-per-equity-partner metric that otherwise dominates decision-making at most big firms. The A-List’s additional considerations bear on the quality of a young lawyer’s life — associate satisfaction, diversity, and pro bono activities. The myopic focus on short-term dollars still dominates decisions in most big firms, but the A-List has joined the conversation.

What methodology will U.S. News employ in evaluating law firms? If it follows the approach of its law school ranking counterparts, many firms will game the system, just as some law schools have. (See my earlier article, “THE U.S. NEWS RANKINGS ARE OUT!” (http://thebellyofthebeast.wordpress.com/2010/04/16/the-us-news-rankings-are-out/)) But misguided and manipulatable metrics aren’t inevitable.

Talent is essential for any successful firm, large or small. Other qualities – collegiality, mentoring, community, high morale accompanying a shared sense of professional purpose – make a workplace special. Can the U.S. News find ways to measure those qualities?

That’s the challenge. But I fear that students won’t bother focusing on the U.S. News methodology or its flaws. More likely, whatever rankings emerge from the process will provide — as they have for so many deliberating the choice of a law school — an easy final answer.

Ceding such control over life’s direction to others is rarely a good idea. There is no substitute for personal  involvement in deciding the things that matter most. That means asking recruiters tough questions, scrutinizing the lives of a firm’s senior associates and partners, and finding role models who are living a life that a new attorney envisions for her- or himself.

In the end, the current large firm business model and its self-imposed associate/partner leverage ratios will continue to render success – defined as promotion to equity partnership — an elusive dream for most who seek it. For those who become dissatisfied with their jobs, time passes slowly. So everyone joining a big firm — even a person intending to remain only for the years required to repay student loans — has ample incentive to get that first big decision after law school correct.

So why would intelligent young attorneys let U.S. News’ self-proclaimed experts make it with something as silly as a ranking? Probably for the same reasons that they relied on U.S. News to make their law school decisions for them three years earlier.

Someday, maybe there will be a U.S. News formula for choosing a spouse. Then won’t life be simple?

WEIRD TILTS AT THE RANKINGS WINDMILL

[UPDATE: On January 1, 2011, Northwestern's former dean, David Van Zandt, became president of The New School in New York.]

Virtually all law school deans — with the notable exception of Northwestern’s David Van Zandt — have urged prospective law students to ignore U.S. News rankings because they’re methodologically flawed, susceptible to manipulation, and counterproductive to sound student decision-making. None of that seems to bother students, most of whom regard them as authoritative.

I introduced Van Zandt’s outlier position in an earlier post. (http://thebellyofthebeast.wordpress.com/2010/04/16/the-us-news-rankings-are-out/). More can be said about how his business school mentality hurts the school and its students, but not today. Right now, I’m more interested in two recent articles on U.S. News rankings.

First, Mercer University recently named its new dean. That’s not a particularly newsworthy item, especially for an undistinguished school. But the National Law Journal thought otherwise. Presumably, its May 27 headline explained why:

“‘U.S. News’ antagonist lands deanship at Mercer University.” http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202458884379&US_News_antagonist_lands_deanship_at_Mercer_University&hbxlogin=1

So that’s what made Gary Simson’s new job noteworthy? He was a U.S. News antagonist? But that describes every law school dean in the country — except Van Zandt.

Simson had been dean of the Case Western Reserve Law School for  18 months when, in summer 2008, he urged law schools to boycott the U.S. News rankings because deans pandered to them. (http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202423187148)

Dean Van Zandt quickly proved the point. A few months after Simson’s call to arms, the ABA Journal exposed Northwestern’s aggressive recruitment of prospective second-year students whom that school had rejected a year earlier. (http://www.abajournal.com/magazine/article/transfers_bolster_elite_schools/)  As transfers, their LSATs wouldn’t count in the U.S. News rankings, but their tuition dollars would go directly to the school’s bottom line.

Nobody asked students in the original 238-person class what they thought of that win-win solution for the business school mentality of misguided metrics. Their class grew by almost 20% in 2006-2007. Ironically, Northwestern’s U.S. News ranking has fallen for each of the last three years — from 9th to 11th.

Unfortunately, Dean Simson was already a wounded warrior when he took up the rankings crusade. He’d generated criticism from faculty, alumni, and donors for a variety of reasons, including Case’s low state bar passage rates (75% for Case first-time takers in February 2008 compared to 95% for Cleveland State’s). In October 2008 — just before another round of bar passage results was released – the university’s president announced that Simson  “had agreed to resign.”  (http://blog.cleveland.com/metro/2008/10/case_western_reserve_law_schoo.html) So much for the boycott messenger and his message.

Yet now, two years later, Simson’s antagonism toward U.S. News rankings has become his claim to fame. Could skepticism about the rankings be attracting new followers and redeeming old ones?

That leads to the second article, also in the NLJ.  The Society of American Law Teachers (SALT) has urged law schools to stop providing U.S. News with incoming students’ LSAT scores. SALT asserts that the pressure on admissions deans to get students with top scores compromises efforts to achieve campus diversity. (http://www.law.com/jsp/article.jsp?id=1202458731270)

It’s a noble gesture, but little more. Starving U.S. News of LSAT scores means only that the magazine will have to get such information from the ABA and the Law School Admission Council, both of which report LSATs at individual schools.

Still, recent noise about the dangers of using flawed rankings criteria as decisive metrics is encouraging. The volume should increase in October when U.S. News releases its newest compilation: rankings of the best law firms.

On that one, U.S.  News may have awakened a slumbering giant. In February, the ABA House of Delegates adopted a resolution to investigate the proposed law firm rankings and, while they’re at it, take a close look at law school ranking methods, too.

Perhaps someday wise leaders of our profession will grasp the destructive impact of the rankings game – from law schools to big firms (based on their average-equity-profits-per-partner metric) — and it will all end. But I doubt it.

After all, metrics make life’s decisions so much easier, don’t they? Indeed, they eliminate the need to think at all!

“AND THE CHILDREN SHALL LEAD…”

It was a great Star Trek episode, and not just because one of the most famous trial lawyers of his time, Melvin Belli, played a villain who tried to take control of every child on planet Triacus. The episode reveals the potency of two great powers: youth and truth.

The moral of the story endures, as I realized while reading an article in the National Law Journal earlier this week. (http://www.alliancealert.org/2010/04/20/law-students-push-schools-for-better-employment-numbers/)

The best prospects for improving the profession will come from new entrants who refuse to settle for answers that others would like them to accept. So it’s gratifying when youth seeks truth as law students start asking the right questions.

Two Vanderbilt students have realized that most law school information about graduates’ employment and compensation is incomplete — and sometimes misleading. Law schools tend to mask reality in aggregate statistical compilations that make them look good. (See Mark Twain on the three kinds of lies: “Lies, damn lies, and statistics.”)

For example, when a school reports to US News that 95% of a recent class was employed at graduation, what does that mean? For jobs that involved temporary research for a professor because nothing else was available, not much.

Likewise, when the median salary at a first-tier school is also the top of the range because many graduates went to big firms, isn’t the overall distribution meaningful? And two or three years later, what happens to the young attorneys in those firms? For too many, nothing good, according to NALP’s associate attrition data.

So two Vanderbilt students are trying to build and publish their own database of detailed information about individual students. The most encouraging aspect of the initiative has less to do with trying to collect what the law schools probably won’t divulge. Rather, it’s the fact that these students — and hopefully many others — are thinking in concrete terms about what their legal careers will actually be like.

Moving away from statistical aggregations and abstract images that don’t educate anyone about life as a real lawyer, they want specific information about their options and prospects (or lack thereof). This initial inquiry — how much individual graduates earn and what happens to them – should lead immediately to a second: what type of work are young attorneys performing and do they enjoy their jobs?

If undergraduates started this deliberative process before they took the LSAT, the profession could begin curing its worst problem: growing attorney unhappiness.

How? The profession is filled with too many lawyers who never should have gone to law school in the first place. If only they had known the truth…and then thought about it…

THE US NEWS RANKINGS ARE OUT!

[UPDATE: This post first appeared on April 16, 2010. On January 1, 2011, Northwestern's former dean, David Van Zandt, became president of The New School in New York.]

Earlier this week, I spoke with one of my former Northwestern undergraduate students. Headed for a top law school this fall, he surprised me with this remark:

“A lot of my classmates are waiting to send in their law school deposits until the latest US News rankings come out this week.”

Seriously?

Virtually every law school dean has condemned US News’ annual effort to do for law schools what the Am Law 100 has been doing for big firms. Those of you reading my ”PUZZLE PIECES” installments know that annual profits-per-partner rankings haven’t brought out the best in us. It’s all part of a larger contemporary phenomenon: the MBA mentality of misguided metrics.

Unfortunately, students aren’t listening to the unanimous chorus of skeptical law school deans. It’s easier to follow the simplistic approach of a lonely outlier, Northwestern’s David Van Zandt: however wrongheaded, metrics matter.

For a decade, he has refused to join colleagues criticizing US News’ fatally flawed methodology. (See, e.g., Brian Leiter’s analysis) A self-styled maverick, Van Zandt insists that ratings are relevant consumer information.

His position proves too much. Not all misinformation should be allowed to pollute decision-makers’ minds. That’s why fraud and misrepresentation causes of action exist. There’s another problem: pandering to the US News criteria distorts law school administrators’ decisions. Once misguided metrics become governing principles, thoughtful reflection disappears. Teaching to the test is easier than creating imaginative lesson plans.

Lately, metrics seem to be foresaking the maverick. In 2009, Northwestern dropped from 9 to 10 in the US News overall standings; this year, it fell to 11.

Rationalizing the decline, Van Zandt says that his innovative programs haven’t gained traction because of ”resistance within a conservative profession.” He argues from aneccdotal evidence that the future will vindicate him. Apart from his inconsistency in crediting a positive rating that suits his purposes but discounting it when things breaks badly, some might accuse him of magical thinking.

Is it time for Van Zandt to back away from his isolated defense of the US News listings? Sure, but it won’t happen. In an April 13 Above the Law post, he urges even more rankings, however dubious their value.

In the end, he’s a misguided metrics kind of guy — at least until Northwestern drops again next year. [UPDATE: It did -- to 12th, but by the time the news hit, Van Zandt had already left to become president of The New School in New York.]