Tag Archives: ABA

THE CHARLOTTE SCHOOL OF LAW AND A WHISTLEBLOWER

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The latest developments at the Charlotte School of Law are the culmination of regulatory capture. The last significant ABA task force addressing the crisis in legal education kicked the can down the road, as did all of its predecessors. That came as no surprise because the head of the task force was Dennis W. Archer. He also chaired the national policy board of InfiLaw, a consortium of Charlotte and two other marginal for-profit law schools owned by venture capitalists.

The Persistent Problem

Without the ability to exploit vulnerable prospective law students willing to incur six-figure law school debt in return for limited prospects of meaningful JD-required jobs, the InfiLaw schools—Charlotte, Arizona Summit, and Florida Coastal School of Law—probably would have gone out of business long ago. It’s a safe bet that InfiLaw’s owners would not send their kids to any of them.

Only recently did the ABA take steps to revoke Charlotte’s accreditation. The school lost access to student loan money, and now its doors are closed. In March 2017, the ABA put Arizona Summit on probation for reasons that included a 25 percent bar exam passage rate for its July 2016 graduates taking the test for the first time. Florida Coastal’s 2016 graduates are faring so poorly in the job market that its end may be in sight: only 36 percent of graduates obtained full-time long-term JD-required jobs. Meanwhile, Florida Coastal grads have the distinction of obtaining degrees from a school that is among the leaders in law school debt: almost $160,000. Arizona Summit’s grads are right up there with them.

For years, InfiLaw has been a poster child for a persistent problem, but it’s not the only offender. Ten years after the Great Recession decimated the demand for new law school graduates, the ABA has ignored a perverse incentive system arising from a dysfunctional market. Specifically, marginal law schools lack accountability for their graduates’ poor job prospects. Those schools live on student loans—which is to say that they would die without them. But once students make their tuition payments, their schools have no skin in the game.

Even Archer’s task force report acknowledged that 25 percent of law schools derive at least 88 percent of their revenues from tuition. The overriding goal becomes maximizing revenues by filling classroom seats with tuition-paying bodies. At most marginal schools, that has meant lowering admission standards–an action that later reflects itself in declining bar passage rates for graduates. The result: unemployed law school graduates are burdened with enormous non-dischargeable debt for degrees of dubious value.

What Will It Take?

Perhaps a Charlotte whistleblower will bring change to a profession that has shown a consistent unwillingness to police itself. The allegations from former Charlotte School of Law Professor Barbara Bernier, who filed suit in June 2016 under the False Claims Act, prompted a federal investigation. She alleges that the school defrauded taxpayers of more than $285 million over a five-year period. According to the suit, Charlotte used dubious tactics to shore up the school’s performance numbers, protect its accreditation, and keep federal student loan dollars flowing.

Bernier claims that admissions officers had quotas of students they had to accept to keep their jobs. She alleges that over a six-year period beginning in 2010, 1,355 substandard students were enrolled, resulting in improper government payments to the school totaling $285 million. She asserts that the school discouraged some students from taking the bar exam because it thought they were likely to fail. Even so, the school’s pass rate has dropped steadily and its February 2017 results were the worst in the state: 25 percent. For those repeating the exam, the February 2017 news was worse: 18 percent passed.

How could this happen? A better question is, why wouldn’t it? Bernier’s allegations are consistent with revenue-maximizing behavior that the current law school business model incentivizes without regard to graduates’ outcomes.

“At Charlotte, there was constant talk of investors — referring to the school’s owners,” the Charlotte School of Law whistleblower professor told The New York Times, “and the focus was on the number of students. They were bringing them in and setting them up and then failing them out.”

InfiLaw has until Oct. 20 to file a formal answer to the complaint. Perhaps someday its owners and those who run other marginal law schools across the country will answer to their students who leave such institutions with big debt and limited JD-required job prospects. Every year, the ranks of those alumni grow.

TRUMP AND BETSY DEVOS DELIVER A ONE-TWO PUNCH

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Since 2007, the federal student loan forgiveness (PSLF) program has been an escape hatch for law graduates (and others) saddled with overwhelming educational debt. The idea was that the graduate would take a public service job at low pay and reduced monthly loan requirements. After ten years of service, any remaining loan debt was forgiven. The well-known backstory is that student loans are not dischargeable in bankruptcy. They can follow a person to the grave.

There were and still are problems with PSLF, such as the resulting tax on the imputed income from the forgiven loan. And 10 years is a long time to toil in low wage positions. But the country and many recent graduates have been the better for it.

New Problems

Serious administrative issues surfaced when the ABA sued the Department of Education for retroactive denials to lawyers who thought they were employed in qualifying PSLF programs. After original approval, the suit alleged, the department then reneged and said, in effect, “No soup for you.”

According to one report, “The ABA, which views the program as an essential part of its recruiting and retention efforts, was only informed that it was no longer an eligible employer for PSLF purposes earlier this year – nine years into a 10 year program. The association has lost employees who were in the program and has been told by possible hires that the loss of qualification was an important factor in not joining the ABA.”

Problems Solved, Trump-Style

For young lawyers hoping that public service loan forgiveness was the answer to a lifetime of student debt burdens, Trump has some bad news. Rather than remedy the problems with a program that can provide enormous help to many recent grads and the organizations for which they work, he wants to eliminate it altogether. It’s analogous to his approach to the Affordable Care Act. Fixing something is more difficult than eliminating it altogether. So Trump proposes to eliminate it.

Amid the attention surrounding Trump’s scandals involving Russia, obstruction of justice, and business conflicts of interest, many important stories got lost. What’s happening in the U.S Department of Education is one of them. On May 17, The Washington Post reported, “Funding for college work-study programs would be cut in half, public-service loan forgiveness would end and hundreds of millions of dollars that public schools could use for mental health, advanced coursework and other services would vanish under a Trump administration plan to cut $10.6 billion from federal education initiatives.”

Why? Because Education Secretary Betsy DeVos’ lifelong mission has been to promote private and religious schools. According the Post story, she seeks to put $400 million into expanding “charter schools and vouchers for private and religious schools, and another $1 billion to push public schools to adopt choice-friendly policies.”

Who’s Affected?

By the end of 2016, 550,00 people had been approved for the federal loan forgiveness program. The first beneficiaries of the program will receive their rewards this year. If Trump and DeVos have their way, they will become the vanguard of a dying breed. Trump and DeVos are not just throwing out the baby with the bathwater; they’re ripping out the tub and all of the plumbing, too.

JERRY FALWELL JR.’S NEW ASSIGNMENT

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Since his inauguration, Donald Trump has dominated news cycles with chaos. It was easy to miss his new task force charged with deregulating higher education. The leader is Jerry Falwell, Jr., president of Liberty University.

“The goal is to pare it back and give colleges and their accrediting agencies more leeway in governing their affairs,” said Falwell, an evangelical leader with a law degree.

Heaven help us all.

Liberty University

Falwell’s father founded Liberty University in Lynchburg, Virginia. It thrives on federal student loan and grant dollars — $347 million for undergraduates alone in 2015, according to The New York Times. Liberty’s nominal student loan default rate within three years of graduation is nine percent. But only 38 percent of Liberty borrowers are paying down at least one dollar on their student loan principal amounts within three years of leaving the school. The Times also reports that six years after entering college, 41 percent of Liberty students earn less than $25,000 a year. That’s about what a typical 25-year-old with only a high school diploma earns.

For years, law schools have been the leading edge of this crisis. Falwell’s Liberty University has one of those, too. Tuition is $32,000 a year. Twenty percent of first-year students entering in 2014 left for academic reasons. Of 61 students who graduated in 2015, only half got full-time long-term jobs requiring a J.D. —  including one graduate who went to work for Liberty. There was some relatively good news: the average debt load for Liberty’s class of 2015 students who borrowed for law school was $68,000 — a lot lower than the $112,000 average for all law schools.

Reversal of Fortune 

Any progress that the Obama administration made to increase accountability in higher education seems destined for Trump’s dustbin. The Department of Education had put heat on schools that were exploiting students who incurred enormous educational debt for degrees of dubious value. Last summer, one of the department’s advisory committees took the American Bar Association to task for allowing law schools to run such scams. In November, the ABA put Charlotte Law School on probation while the school tried to work out its problems. In December, Charlotte lost its eligibility for federal student loans and its death spiral accelerated.

At long last, someone noticed that federal money was allowing bottom-feeder law schools to stay in business. But the legal profession’s accrediting agency – the types of organizations that Falwell says he wants to vest with greater decision-making power – hadn’t pulled the trigger on Charlotte. The DOE had.

President Obama also moved the vast majority of student lending from the private sector to the federal government. The expectation is that Trump will move it back. Since the election, the stock prices of private student lenders and loan servicing companies have soared. They’re a good bet. Federal guarantees protect lenders; borrowers can’t discharge educational debt in bankruptcy.

The end result is that marginal schools still have no financial skin in the game. They keep filling classrooms with students who borrow huge sums for degrees that aren’t worth it. Income-based repayment programs may provide some relief, but eventually someone will figure out that the U.S. Treasury will wind up footing that bill, which could become a very big number. When loan forgiveness programs shrink or disappear, an entire generation will live — and, in many cases, die — with educational debt incurred to pay the big salaries of people like Jerry Falwell, Jr.

How much damage could Falwell’s task force do? Plenty. The ABA is institutionally incapable of cracking down on law schools that should have closed long ago or never opened at all. Watch out for this: If the federal student loan spigot reopens for Charlotte Law School, there’s no bottom in sight.

What Would Jesus Do?

Jerry Falwell, Jr. was an anchor of Trump’s evangelical constituency. As president of Liberty, he earns $900,000 a year. In fact, Falwell said Trump offered him the Secretary of Education position that DeVos now occupies, but he turned it down. Trump wanted a four-to-six year commitment; Falwell reportedly said he couldn’t afford to work at a cabinet-level job for more than two years.

As Falwell and others like him prosper, their students suffer. Now that Falwell is in charge of deregulating higher education, Trump’s victory speech after winning the Nevada primary last year takes on new meaning: “We won the evangelicals… We won with poorly educated. I love the poorly educated.”

I suspect Jerry Falwell, Jr. loves the poorly educated, too. When it comes to selling a dubious degree from a marginal school, they’re especially inviting targets.

PRESIDENT TRUMP’S ATTORNEY GENERAL? — PART 1

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Last week, I discussed Trump’s threats to sue his critics and the possibility that, when it came actually to filing a lawsuit, his lawyers’ overriding duties of professional responsibility became a restraining influence. Even so, the threats themselves — like those Trump reiterated on October 22 to sue any and all accusers who have or will come forward to confirm his boasts about being a sexual predator — have a chilling impact. If an accuser with a truthful story remains quiet, Trump wins without firing a shot or paying a filing fee.

Anyone who doubts the effect of even an idle Trump threat should consider the American Bar Association’s recent actions. The New York Times reports:

“Alarmed by Donald J. Trump’s record of filing lawsuits to punish and silence his critics, a committee of media lawyers at the American Bar Association commissioned a report on Mr. Trump’s litigation history. The report concluded that Mr. Trump was a ‘libel bully’ who had filed many meritless suits attacking his opponents and had never won in court. But the bar association refused to publish the report, citing ‘the risk of the A.B.A. being sued by Mr. Trump.'”

The Media Law Research Center posted the report.

If candidate Trump can achieve that type of chilling effect on the nation’s largest professional association of attorneys, imagine the impact of a President Trump who would select the country’s top law enforcement officer, namely, the attorney general of the United States.

Even Worse Threats

“You’d be in jail.”

Donald Trump interrupted Hillary Clinton to deliver that warning during their second debate. Moments earlier, he’d provided the context.

“If I win,” he said, “I am going to instruct my attorney general to get a special prosecutor to look into your situation, because there has never been so many lies, so much deception. There has never been anything like it, and we’re going to have a special prosecutor.”

As Trump landed another blow against the rule of law, his supporters in the audience howled, “Lock her up” — a standard chant at Trump rallies.

The Gambit

The process for appointing a special counsel doesn’t give any president the power Trump says he’d wield. The last president to have any influence over a special prosecutor was Richard Nixon. Esteemed Harvard Law Professor Archibald Cox had the job, and it didn’t end well for Nixon or the country.

When Cox subpoenaed the president’s Oval Office tape recordings, Nixon ordered Attorney General Elliot Richardson to fire him. Richardson refused, so Nixon fired Richardson. When his successor, Deputy Attorney General William Ruckelshaus, likewise refused to discharge Cox, Nixon fired him, too. After Solicitor General Robert Bork was sworn in to replace Ruckelshaus, he executed Nixon’s command.

Eventually, the U.S. Supreme Court ordered Nixon to release the tapes. Nixon’s own voice proved his personal involvement in efforts to cover-up the 1972 burglary of Democratic National Committee headquarters – the Watergate break-in. The incriminating evidence led the House of Representatives to issue articles of impeachment. When it became clear that fellow Republicans in the Senate would provide enough votes to convict him, Nixon became the first U.S. president to resign his office.

The “Saturday Night Massacre” that cost Richardson, Ruckelshaus, and Cox their jobs led Congress to enact the Ethics in Government Act of 1978 that removed the president from the independent prosecutor process. In 1999, the legislation lapsed under a sunset provision. Today, the Code of Federal Regulations – which has the force of law – governs. The decision to appoint a “special counsel” to conduct investigations or prosecutions of particular matters on behalf of the United States belongs to the attorney general, not the president.

The Executioner

Nixon’s appointees, Richardson and Ruckelshaus, lost their jobs because they refused to do Nixon’s bidding. Trump’s attorney general would have to embrace his illegal post-election assault on a political adversary. To fulfill his banana republic-like promise to imprison a political opponent, Trump would need someone who bowed unquestioningly to his wishes.

Who might use the power of high office for such retribution? There’s an obvious candidate: New Jersey Governor Chris Christie. After all, at the Republican National Convention, he prosecuted the case against Hillary Clinton and invited the audience to roar, “Guilty.”

As for a willingness to use political power for payback, Trump has a favorable view of Christie, too.

“He knew about it,” Trump said during a Republican presidential primary rally in December 2015. “He totally knew about it.”

During a December 2013 news conference, Christie had staked out a different position: “I didn’t know anything about it.”

The “he” was Christie. The “it” was Bridgegate.

The Scandal

On September 9, 2013 – the first day of the school year in Fort Lee, New Jersey – commuters to New York City found themselves in a traffic jam on the George Washington Bridge. Without advance notice to local officials, the Port Authority of New York and New Jersey reduced from three to one the number of lanes and tollbooths available to vehicles accessing the bridge from Fort Lee.

Even by New York standards, the resulting gridlock on the world’s busiest bridge was monumental. Some motorists were stranded for hours. Public health and safety became serious concerns. Was it just a coincidence that the Democratic mayor of Fort Lee had refused to endorse Christie for a second term as governor?

As the debacle developed, what did Governor Christie know and when did he know it? Senator Howard Baker had made a similar question famous during the Watergate hearings, and it still resonated.

The next installment in this series will take a deeper dive into the criminal trial that has inflicted significant collateral damage on Christie — the head of Donald Trump’s presidential transition team.

THE ABA’S TERRIBLE, HORRIBLE, NO GOOD, VERY BAD DAY

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It’s a mere formality. Every five years, the Department of Education renews the ABA’s power to accredit law schools. The June 2016 session before a DOE advisory committee (NACIQI) was supposed to be just another step in the rubber-stamping process. The NACIQI staff had recommended approval. The committee’s three-day session contemplated action on a dozen other accrediting bodies, ranging from the American Psychological Association to the American Theological Schools. Sandwiched between acupuncture and health education, the agenda contemplated an hour for the ABA.

What could go wrong?

For starters, committee members grilled the ABA’s representatives for an entire afternoon.

Questions About Law Student Debt?

First up for the ABA was the chair of the Section of Legal Education and Admissions to the Bar, Arizona Supreme Court Justice Rebecca White Berch. A committee member asked how the ABA assessed schools based on the interrelationship between student debt, bar passage rate, and graduate placement rates. Justice Berch said the ABA was looking “for a bar passing rate of 75 percent…. [W]as that part of your question?”

Actually, that was just a proposal set for an ABA Section hearing on August 6, but it wasn’t what the NACIQI had in mind.

NACIQI Member: “Sorry, no. I think my question also went to concern related to debt that students incurred while in law school and relationship of that to placement.”

ABA Managing Director Barry Currier tried to field that one:

“With respect to debt, we have been following a disclosure model for a number of years now and a lot of information is disclosed… [W]e collect information about student borrowing, but it is currently not part of the consumer information that schools are required to post with us… [T]here is no standard about how much debt is too much debt at this point in time.”

Let the squirming begin.

“So it may be,” Currier continued, “that as evidence mounts that students don’t shop very effectively and that as uncapped student loans are available, that we need to be more paternalistic, if you will, or more — we may need to make more information required and adopt standards around how much debt is too much debt.”

Placement Rates?

NACIQI: “What would be an appropriate placement rate for a law school?”

Currier: “Well our standards do not require any specific employment…[W]e don’t have a specific standard that a school must achieve in terms of placement.”

…

NACIQI: “But you are the ones who identified that legal education is very expensive… And if they can’t find a job it wrecks their lives.”

…

NACIQI: “[Y]ou can tell a lot from some of these low performing schools. And a school that sticks out to me is Whittier Law School in California… [T]he enrollment has dropped 51 percent since 2010, yet tuition has increased 31 percent since 2008.”

He wasn’t finished.

“Over 105 million dollars of Title IV funding has gone into this school. All the while, one in four graduates of this law school has obtained a full-time attorney job within nine months… Appalachian School of Law, University of LaVerne, Golden Gate, all have abysmal placement rates… [S]o I guess my question is specifically related to these low performing institutions: what are you guys doing?”

Then he answered his own question:

“[W]hen we look at these low performing schools, you guys are doing absolutely nothing.”

Can We Talk About Something Else?

Justice Berch’s attempt to change the subject was unavailing.

NACIQI: “We are talking about student debt, right, so — I guess you are not answering my question, and so I would like for us to stay on that… I just want to make sure we are talking about what is your responsibility and your response to these lower performing schools. I mean, have they been put on probation? That’s my first question.”

Justice Berch: You make a valid point. The answer is — has anyone yet been put on probation? No…”

…

NACIQI: “How many institutions have you denied accreditation to for low pass rates?

Justice Berch: For low pass rates alone, none.”

…

NACIQI: “Over the past five years how many institutions have you withdrawn your accreditation from?”

Currier: “Zero, zero.”

You Think The ABA Can’t Do The Job?

During the NACIQI’s discussion on the motion to recommend renewal of the ABA’s accreditation power, one member put the problem bluntly:

“I am troubled that the ABA just simply isn’t independent enough for this responsibility… I find it very difficult to think that they are going to be objective enough to continue to carry out this responsibility. And I reluctantly conclude that the ABA is not the appropriate accreditor for our law schools…[T]he crushing debt load on thousands and thousands of students is too serious for us… And I think the debt load is not going to get better if we say yes to this motion.”

Another member added: “I think that objectivity is important as you go through this process, so I would think an independent body that does not have the conflict of interest that the ABA has.”

It’s Worse Than They Thought

The NACIQI didn’t consider a recent illustration of the ABA’s independence problems. Former ABA President Dennis Archer is chairman of the national policy board of Infilaw — a consortium of three for-profit law schools. At those schools — Arizona Summit, Florida Coastal, and the Charlotte School of Law — students graduate with six-figure debt and dismal prospects for a meaningful job requiring bar passage. (Full-time long-term JD-required job placement rate ten months after 2015 graduation: Arizona Summit — 40 percent; Florida Coastal — 39 percent; Charlotte — 26 percent.)

On November 18, 2013, Archer and Infilaw’s chief executive officer co-signed a seven-page tour de force warning the DOE about the perils of applying the “Gainful Employment Rule” to “proprietary law schools and first professional degree schools in general.” The letter (on Infilaw stationery) argued, among other things, that the proposed rule was unnecessary because the ABA — as an accrediting body — ensures that InfiLaw “must offer an education that will help students achieve their goals.”

Six months later, Archer became chairman of the ABA’s Task Force on the Financing Legal Education. A year later — June 2015 — the Task Force acknowledged that 25 percent of law schools obtain at least 88 percent of their revenues from tuition. But it refused to recommend an obvious remedy: financial penalties for schools where students incur massive law school debt in exchange for dismal long-term JD-required job prospects.

The Task Force’s recommendations were embarrassingly inadequate, but the ABA House of Delegates accepted them.

One More Chance?

The ABA’s culture of self-interest and insularity has now created a bigger mess. Some NACIQI members favored the “nuclear” option: recommending denial of the ABA’s accrediting authority altogether. The committee opted to send a “clear message” through less draconian means.

The final recommendation was to give the ABA a 12-month period during which it would have no power to accredit new law schools. Thereafter, the ABA would report its progress in addressing the committee’s concerns, including the massive debt that students are incurring at law schools with poor JD-required placement rates.

As one member put it, “It is great to collect data, but they don’t have any standard on placement. What’s the point of collecting data if you can’t…use the data to help the students and protect the students…”

Another member summarized the committee’s view of the ABA: “This feels like an Agency that is out of step with a crisis in its profession, out of step with the changes in higher ed, and out of step with the plight of the students that are going through the law schools.”

The day of reckoning may not be at hand, but it’s getting closer.

ABOUT THAT LAWYER SHORTAGE…

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Facts are stubborn things — almost as stubborn as persistent academic predictions that boom times for attorneys are just around the corner.

Back in 2013, Professor Ted Seto at Loyola Law School-Los Angeles observed, “Unless something truly extraordinary has happened to non-cyclical demand, a degrees-awarded-per-capita analysis suggests that beginning in fall 2015 and intensifying into 2016 employers are likely to experience an undersupply of law grads, provided that the economic recovery continues.”

In November 2014 after the Bureau of Labor Statistics proposed a new and deeply flawed methodology for measuring attorney employment, Professor Seto weighed in again: “If the new BLS projections are accurate, we should see demand and supply in relative equilibrium in 2015 and a significant excess of demand over supply beginning in 2016.” His school’s full-time long-term bar passage employment rate for the class of 2015 was 62 percent — slightly better than the overall mean and median for all law schools, which are just under 60 percent.

Likewise in 2014, Professor Rene Reich-Graefe at Western New England University School of Law used what he described as “hard data” to argue, “[C]urrent and future law students are standing at the threshold of the most robust legal market that ever existed in this country.” The Georgetown Journal of Legal Ethics published his dubious analysis leading to that prediction. Within ten months of graduation, only 43 percent of 2015 graduates from Professor Reich-Graefe’s school found full-time long-term jobs requiring bar passage.

Fact-sayers v. Self-interested Soothsayers

To his credit, Professor Jerry Organ at the University of St. Thomas School of Law has been fearless in challenging the relentless optimism of his academic colleagues. And he does it with the most persuasive of lawyerly approaches: using facts and evidence.

Analyzing the ABA’s recently released law school employment reports for all fully-accredited law schools, Professor Organ notes that the number of graduates dropped in 2015. But for the second straight year, so did the number of full-time long-term jobs requiring bar passage.

Professor Organ offers a number of explanations for this result: declining bar passage rates; regional factors that reduced hiring in Texas and elsewhere; the impact of technology. But whatever the reasons, he suggests, “[T]his employment outcomes data provides a cautionary tale.”

Proceeding Without Caution

“The fact that the employment market for law school graduates appears to have stagnated and even declined to some extent over the last two years,” Professor Organ continues, “may mean that risk averse potential law school applicants who focus on post-graduate employment opportunities when assessing whether to invest in a legal education may remain skittish about applying, such that this year’s good news on the applicant front may be somewhat short-lived.”

The “good news on the applicant front” to which Professor Organ refers is his projection that applications for the fall 2016 entering class are on track to increase for the first time since 2010. But he offers a cautionary note there as well. Law schools at the upper end “will see more enrollment growth and profile stability in comparison with law schools further down the rankings continuum.”

Perilous Predictions

Some prognostications are safer than others. Here’s mine: Faculty and administration at weak law schools will continue using the overall decline in the number of all applicants to persist in their misleading sales pitches that now is a “Great Time to Go to Any Law School.” They will discourage inquiry into more relevant facts.

But here they are: At the 90th percentile of all 204 ABA-accredited law schools, the full-time long-term bar passage-required employment rate for 2015 graduates was just under 80 percent. At the 75th percentile, it was 67 percent. But at the 25th percentile, it was 49 percent. And at the 10th percentile, it was only 39 percent.

It will always be a great time to go to some law schools. It will never be a great time to go to others.

LSAT v. GRE – RHETORIC v. REALITY

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[NOTE: The trade paperback edition of my book, The Lawyer Bubble – A Profession in Crisis (Basic Books, 2016) — complete with an extensive new AFTERWORD — is now available at Amazon.]

The Wall Street Journal reports that the University of Arizona College of Law has begun accepting GRE scores in lieu of LSATs. Two other schools — the University of Hawaii and Wake Forest — are performing validation studies to determine whether they, too, should make the move to GREs.

At Arizona, Dean Marc Miller said, “This isn’t an effort to declare war on anybody. This is an effort to fundamentally change legal education and the legal profession.”

To “fundamentally change legal education and the legal profession,” accepting GRE scores instead of LSATs seems like a misfire. Beyond the rhetoric is a reality that might reveal what else could be going on.

The GRE Is Easier

According to the executive director of prelaw programs at Kaplan Test Prep, Jeff Thomas, “The GRE is regarded as the easier test. The entirety of the LSAT was meant to mimic the law-school experience, while the GRE was not created for that particular purpose.”

But the fact that the GRE is easier doesn’t explain why some law schools want to use it. Self-interest and U.S. News rankings might.

LSATs Are Telling a Sad Story 

As LSAT scores of entering classes have dropped at many schools, so have bar passage rates. According to the University of Arizona School of Law’s ABA Reports, its median LSAT for matriculants in 2012 was 161. For 2015, it was 160. That’s not much of a decline, but at the 25th percentile, the LSAT score went from 159 to 155.

According to the school’s website, in July 2013, 92 percent of first-time test takers passed the Arizona bar exam. In July 2015, the passage rate was 84 percent.

The GRE Isn’t the LSAT

Such trends suggest another possible reason for allowing students to substitute the GRE for the LSAT: It buys law schools time and complicates prelaw student decision-making. At many schools, year-over-year LSAT score comparisons have documented the willingness of many deans to accept marginal students. The easiest way to stop such time series analyses is to make that test optional.

The GRE will be a new data point. Until schools report those scores for two or three years, it won’t reveal trends in admitted student qualifications. That will deflect attention away from the “declining quality of admitted students” narrative that has become pervasive. Never mind that the narrative is pervasive because, based on LSATs and undergraduate GPAs for matriculants at many schools, it’s true. (Between 2012 and 2015, the University of Arizona School of Law’s undergraduate GPA for matriculants dropped at all three measuring points — the 25th, 50th, and 75th percentiles, according to its ABA reports for those years.)

The Heavy Hand of U.S. News rankings

In addition to confusing the story on the declining quality of applicants, law schools have another reason to accept the GRE. Applicants will take both exams and pick the better result for law school consumption. It’s analogous to the current ABA rule allowing schools to use only a student’s highest LSAT score.

Prelaw students who do badly on the LSAT will submit the GRE score instead. The ongoing self-selection of poor LSAT scores away from the applicant pool will increase the 25th, 50th and 75th percentile LSAT values for the scores that remain. Until all schools adopt the GRE option, it will help the U.S. News rankings of the schools that do it.

There’s precedent for such behavior. Most high school students take the SAT and the ACT. Where a college allows either score, students submit the higher one.

Look Beyond the Rhetoric

Trends at the two other schools mentioned in the WSJ article might be relevant to all of this. At the University of Hawaii, compare the 2012 and 2015 ABA forms reporting LSATs for matriculants:

75th percentile: 2012 – 160; 2015 – 158

50th percentile: 2012 – 158; 2015 – 154

25th percentile: 2012 – 154; 2015 – 151

Likewise, at Wake Forest the results are:

75th percentile: 2012 – 165; 2015 – 162

50th percentile: 2012 – 163; 2015 – 161

25th percentile: 2012 – 159; 2015 – 157

At this point, the appropriate legal phrase is res ipsa loquitur — the thing speaks for itself.

The ABA is planning to determine independently whether the GRE meets its accreditation requirement allowing schools to use the LSAT or another “valid and reliable” test when making admissions decisions. The profession’s leading organization is likely to approve the switch. That’s because doing so will perpetuate what has become the ABA’s central mission in legal education: protecting many law schools from scrutiny and meaningful accountability.

That’s about as far as you can get from trying “to fundamentally change legal education and the legal profession.”

 

ANOTHER SHOT AT STUDENT LOAN DEBT

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A recent Department of Education initiative has not attracted the public attention that it deserves. But it could have important implications for the federal loans that fuel higher education, including law schools. The Department seeks to create a framework for dealing with the thousands of students who recently filed “defense of repayment” claims.

The Wall Street Journal’s recent summary of the program could strike fear in the hearts of many law school deans and university administrators:

“In the past six months, 7,500 borrowers owing approximately $164 million have applied to have their student debt expunged under an obscure federal law that had been applied in only three instances before last year. The law forgives debt for borrowers who prove their schools used illegal tactics to recruit them, such as lying about their graduates’ earnings.”

But it could get even worse for the schools, as the Journal explains:

“Last week, the department began a months-long negotiation with representatives, schools and lenders to set clear rules, including when the department can go after institutions to claw back tuition money funded by student loans.”

Will the Department’s latest effort to impose meaningful accountability on institutions of higher education fare any better than predecessor techniques that have failed? There have been too many of those.

Lawsuits Haven’t Worked

Law schools have become poster children for the accountability problem and ineffectual efforts to solve it. In 2012 some recent alumni sued their law schools, but they didn’t get very far. The vast majority of courts threw out claims that the schools had misrepresented graduates’ employment opportunities. The winners on motions to dismiss or summary judgment included Thomas M. Cooley (now Western Michigan University Cooley School of Law), Florida Coastal, New York Law School (not to be confused with NYU), DePaul, IIT Chicago-Kent, and John Marshall (Chicago), among others.

Judge Melvin Schweitzer’s March 21, 2012 ruling in favor or New York Law School set a tone that other courts followed: Prospective students “seriously considering law school are a sophisticated subset of education consumers…” In other words, they should have known better. That might be true today, but at the time Judge Schweitzer wrote his opinion, he was wrong. So were the courts who followed his rationale to reach similar results. At a minimum, there were serious factual disputes concerning his conclusory assessment of an entire cohort of prelaw students.

In particular, the plaintiffs in the New York Law School case graduated between 2005 and 2010. Back in 2002 through 2007 — when those undergraduates were contemplating law school — NYLS claimed a 90 to 92 percent employment rate for its most recent graduating classes. But that stratospheric number resulted only because all law schools counted any job for purposes of classifying a graduate as “employed.” A part-time worker in a temporary non-JD-required position counted the same as an assistant U.S. attorney or a first-year associate in a big firm. Only after 2011 did the ABA finally require schools to provide meaningful data about their recent graduates’ actual employment results.

A notable exception to the dismissal of the cases against the law schools was one of the first-filed actions, Alaburda v. Thomas Jefferson School of Law, which is set for trial in March 2016. In that case, Judge Joel Pressman correctly found that a jury should decide the clearly disputed issues of fact. He got it right, but he’s an outlier.

The ABA and the AALS Haven’t Helped

Anyone expecting the profession to put its own house in order continues to wait. The changes requiring greater law school transparency in employment outcomes came about only because the public outcry became overwhelming and Congress threatened to involve itself. When political opposites such as Senators Dianne Feinstein (D-CA) and Chuck Grassley (R-IA) agree to gang up on you, it’s time to wake up.

Since then, the organization has returned to form as a model of regulatory capture. Twice in the last four years, it has punted on the problem of marginal law schools that survive on student loan debt. School that would have closed long ago if forced to operate in a real market continue to exist only because the legal education market is dysfunctional. That is, the suppliers — law schools — have no accountability for their product — far too many graduates who are unable to obtain full-time long-term JD-required employment after incurring the six-figure debt for their degrees.

And while we’re on the subject of regulatory capture, the current president of the AALS has now declared that there is no crisis in legal education. Her interview produced an article titled, “As Law Professors Convene, New Leader Looks to Unite the Profession.” Why all law schools should unite to protect marginal bottom-feeders exploiting the next generation of students remains a question that no one in the academic world is willing to ask, much less answer.

Now Comes the Fun Part

Ignoring problems does not make them go away. As the profession refuses to acknowledge a bad situation, it loses the opportunity to influence the discussion. Which takes us to the recent Department of Education activity relating to criteria for applying the burgeoning volume of “defense of repayment” applications.

Special interests are likely to resist meaningful change. From institutions of higher education to debt collectors who have made student loan debt collection a multi-billion dollar business, lobbyists will swamp the process. Still, attention seems assured for marginal schools exploiting a dysfunctional market. That’s a good thing.

As the disinfecting qualities of sunlight intensify, someday the ABA and the AALS may realize that an old adage is apt: If you’re not part of the solution, you’re part of the problem. Perhaps another round of bipartisan congressional interest will help them see the light.

MY OP-ED IN THE NY TIMES — AND A KINDLE BOOK PROMOTION

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My August 25, 2015 New York Times op-ed on law student debt, law school moral hazard, and the dysfunctional legal education market appears here: “Too Many Law Students, Too Few Legal Jobs.”

In the winter 2015 issue of the American Bankruptcy Institute Law Review, I published a specific proposal for creating a law school accountability: “Bankruptcy and Bad Behavior – The Real Moral Hazard: Law Schools Exploiting Market Dysfunction.” 

Additionally, Amazon is running a promotion for my novel. From August 25 through August 29, you can download the Kindle version of The Partnership – A Novel.

 

 

THE ABA AT WORK — NOT!

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Recently, I suggested that the ABA House of Delegates reject the June 17 Report of the Task Force on the Financing of Legal Education. The Task Force was supposed to tackle the crisis of massive student loan debt that is subsidizing marginal law schools. Its Report not only fails to fulfill that mission, but also ignores the central problem of a dysfunctional legal education market. As a consequence, it offers superficial recommendations that will accomplish little.

Doomed from the Start; Flawed at the Finish

As I observed when the ABA announced the creation of the Task Force in May 2014, no one should have reasonably expected its chairman, Dennis Archer — who is also chairman of the national policy board for Infilaw — to point his group in the direction of true market-based reform that would jeopardize revenues at marginal law schools. After all, Infilaw is a private equity-owned consortium of three for-profit law schools with dismal full-time long-term JD-required employment outcomes: Arizona Summit, Charlotte, and Florida Coastal.

On August 4, the ABA House of Delegates gave the Task Force Report a rubber stamp of approval by adopting five “Resolutions.” Only two are even operative; the remaining three now go the Council of the Section of Legal Education and Admissions to the Bar. Together, they constitute an abdication of the ABA’s role in an important national discussion.

The Details

Let’s start with the two resolutions that don’t require additional action by the Council of the Section of Legal Education and Admissions to the Bar. We’ll call them “urging” and “encouraging,” which means they are essentially toothless.

One asks the ABA to “urge all participants in the student loan business and process, including law schools, to develop and publish easily understood versions of the terms of various loan and repayment programs.”

The other asks the ABA to “encourage law schools to be innovative in developing ways to balance responsible curricula, cost effectiveness, and new revenue streams.”

On to Another Committee…

The remaining three resolutions “encourage” another ABA Committee to adopt equally ineffective measures: “enhanced financial counseling for students (prospective and current) on student loans and repayment programs,” “return to collecting expenditure, revenue, and financial aid data annually for each law school,” and “make public the information on legal education it currently maintains and information it collects going forward.”

It took the Task Force more than a year to come up with its recommendations. Expect another year or more to pass before the Council of the Section of Legal Education and Admissions to the Bar acts on the Task Force’s “encouragement.” If the Council takes up these issues, expect law schools to fight major battles resisting disclosure of their financial affairs. But it doesn’t really matter what the Council does or how long it takes because none of the recommendations will make a difference to the core problem: lack of individual law school-specific financial accountability for graduates’ poor employment outcomes.

One More Thing

On July 29, NPR’s Marketplace ran a brief report on the larger crisis in legal education. In his NPR interview, Dennis Archer defended his Task Force’s Report, saying, “People make choices about their lives. And they make choices every day.”

In the current dysfunctional financing regime that his Task Force refused to confront, law schools make choices, too. However, once students pay their tuition bills, law schools have no financial accountability for what happens next. Stated differently, the weakest law schools have the freedom to make the bad choice of maximizing enrollments, tuition revenues, and student debt, even if most of their graduates have dismal JD-required job prospects upon graduation.

The ABA makes choices, too. In the ongoing debate concerning one of the nation’s most pressing issues, it has chosen to remain silent. The next generation of potential ABA members is taking notice.

DEAR ABA…

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Dear ABA (especially members of the House of Delegates to the upcoming annual meeting in Chicago):

For years, America’s dysfunctional system of financing legal education has produced too many lawyers for too few jobs — and too many law graduates with too much educational debt. A year ago, the ABA created yet another Task Force to consider the problem. The June 17, 2015 Final Report on the Financing of Legal Education embodies the failure of that Task Force’s mission. It now goes to the House of Delegates for approval.

If the Delegates are interested in rehabilitating the ABA’s credibility and restoring public confidence in the profession on an issue of critical importance to the country, they could take this simple step: reject the Task Force Report. That’s right. Rather than giving the typical rubber stamp of approval amid flowery speeches thanking Task Force members for their time and effort in generating a hollow ABA statement summarizing the obvious, the House of Delegates could just say no.

Round One

Some observers had hoped that the ABA’s previous Task Force on the Future of Legal Education might tackle the daunting issues responsible for our dysfunctional legal education market. After all, the ABA’s leaders promised that the 2012 Task Force would make “recommendations to the American Bar Association on how law schools, the ABA, and other groups and organizations can take concrete steps to address issues concerning the economics of legal education and its delivery.”

To its credit, the 2012 Task Force put its toe in those waters, observing that the “system of lending distances law schools from market considerations and it supports pricing practices that do not well serve either the public or private value in legal education.”

Let’s state the problem more bluntly: Marginal law schools are relying on exploding student debt to produce revenue streams that keep them alive. They get away with it because federal student loans come without school-specific accountability for graduates’ dismal employment outcomes. Schools have no financial skin in the game.

But the 2012 Task Force didn’t go beyond identifying the problem because, it said, “The time and resources available to the Task Force have made it impractical to develop a structure of equitable and effective solutions.”

Round Two

So in May 2014, then-ABA president James R. Silkenat announced the creation of a new Task Force — one specifically devoted to the Financing of Legal Education. It was supposed to pick up where the 2012 Task Force had stalled. It was going to “conduct a comprehensive study of the complex economic and political issues involved and produce sound recommendations to inform policymakers throughout the legal community.”

The 2014-2015 Task Force Report recites that 25 percent of law schools obtain at least 88 percent of their total revenues from tuition and that the average for all law school is 69 percent. It also reports that higher tuition has produced more student debt, even as job prospects for graduates of marginal schools have languished.

Since 2006 alone, average student debt has increased by 25 percent (private schools) and 34 percent (public schools) in inflation-adjusted dollars. Average student debt at graduation from private law schools in 2013 was $127,000; for public schools it was $88,000. Meanwhile, only about half of new law graduates are obtaining full-time long-term jobs requiring a JD.

But the new Task Force didn’t pursue this obvious market dysfunction. Instead, its Final Report offers superficial fixes: better debt counseling for students, better disclosure forms from the Department of Education, more dissemination of how schools spend their money, and continued experimentation with law curriculum. They ignore the core financial accountability problem, rather than confronting and addressing it.

Insularity and Self-Interest

The chairman of the 2014-2015 Task Force was Dennis W. Archer, former mayor of Detroit, former Michigan Supreme Court justice, and past president of the ABA. Did the ABA think no one would notice that Archer also chairs of the national policy board of Infilaw — a private equity-owned consortium of three for-profit law schools — Arizona Summit, Charlotte, and Florida Coastal.

The Infilaw schools feed on the market dysfunction that the current system for funding legal education creates. The job market for law graduates from schools such as Infilaw’s remains dismal. But even in the face of their graduates’ poor full-time long-term JD-required employment results, Infilaw’s schools increased enrollment and have become leaders in creating debt for their students.

Archer wasn’t the only problematic appointment to the 2014-2015 Task Force. Another member, Christopher Chapman, is president and CEO of Access Group — the collective voice of 197 ABA-accredited law schools.

According to the Access Group’s website, “During the course of our 30+ year existence, we became a leading provider of affordable student loans for aspiring professionals in law, medicine, dentistry, health, business, and other disciplines. As such, we served as a national originator, holder and servicer of federally guaranteed and private, credit-based loans, funding more than $18 billion of education loans since 2001.”

Enough said.

Forfeiting The Right To Be Heard

The fact that, as one 2014-2015 Task Force witness said, legal education may be the “canary in the coal mine” on issues relating to student debt and financing higher education generally is no excuse for the profession to refrain from offering potential solutions.

For that reason, at its upcoming August 3-4 meeting in Chicago, the ABA House of Delegates could reject the Task Force Report. It could then reconstitute the Task Force membership with individuals willing to deliver the tough message that the profession needs. It could direct the newly constituted group to develop meaningful proposals that tie law student loan availability to individual law school outcomes. My recent article in the American Bankruptcy Institute Law Review, “Bankruptcy and Bad Behavior,” offers one idea that would force law schools to put some financial skin in the game; others have suggested plans warranting serious consideration.

The ABA describes its mission as “committed to doing what only a national association of attorneys can do: serving our members, improving the legal profession, eliminating bias and enhancing diversity, and advancing the rule of law throughout the United States and around the world.”

In a single vote rejecting the 2014-2015 Task Force Report on the Financing of Legal Education, the House of Delegates could match those lofty words with action.

On this vitally important issue, the ABA leadership has caused many attorneys and the general public to become cynical about the organization’s motives. The House of Delegates has a unique opportunity to prove that the ABA is not just the vehicle whereby an insular, self-interested group seeks to preserve the present at the expense of the future. The House of Delegates can be part of the solution, or it can remain part of the problem.

Which path will it choose? The whole legal world is watching.

2015: THE YEAR THAT THE LAW SCHOOL CRISIS ENDED (OR NOT) — CONCLUSION

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My prior two installments in this series predicted that in 2015 many deans and law professors would declare the crisis in legal education over. In particular, two changes that have nothing to do with the actual demand for lawyers — one from the ABA and one from the Bureau of Labor Statistics — could fuel false optimism about the job environment for new law graduates.

Realistic projections about the future should start with a clear-eyed vision of the present. To assist in that endeavor, the Georgetown Law Center for the Study of the Legal Profession and Thomson Reuters Peer Monitor recently released their always useful annual “Report on the State of the Legal Market.”

The Importance of the Report

The Report does not reach every segment of the profession. For example, government lawyers, legal aid societies, in-house legal staffs, and sole practitioners are among several groups that the Georgetown/Peer Monitor survey does not include. But it samples a sufficiently broad range of firms to capture important overall trends. In particular, it compiles results from 149 law firms, including 51 from the Am Law 100, 46 from the Am Law 2nd 100, and 52 others. It includes Big Law, but it also includes a slice of not-so-big law.

The principal audience for the Georgetown/Peer Monitor Report is law firm leaders. The Report’s advice is sound and, to my regular readers, familiar. Rethink business models away from reliance on internally destructive short-term metrics (billable hours, fee growth, leverage). Focus on the client’s return on investment rather than the law firm’s. Don’t expect a reprise of equity partner profit increases that occurred from 2004 through 2007 (cumulative rate of 25.6 percent). Beware of disrupters threatening the market power that many firms have enjoyed over some legal services.

For years, law firm leaders have heard these and similar cautions. For years, most leaders have been ignoring them. For example, last year at this time, the Georgetown/Peer Monitor Report urged law firm leaders to shun a “growth for growth’s sake” strategy. Given the frenzy of big firm merger and lateral partner acquisition activity that dominated 2014, that message fell on deaf ears.

The Demand for Lawyers

The 2015 Report’s analysis of business demand for law firm services is relevant to any new law graduate seeking to enter that job market. Some law schools might prefer the magical thought that aggregate population studies (or dubious changes in BLS methodology projecting future lawyer employment) should assure all graduates from all law schools of a rewarding JD-required career. But that’s a big mistake for the schools and their students.

For legal jobs that are still the most difficult to obtain — employment in law firms — the news is sobering. While demand growth for the year ending in November 2014 was “a clear improvement over last year (when demand growth was negative), it does not represent a significant improvement in the overall pattern for the past five years.”

In other words, the economy has recovered, but the law firm job market remains challenging. “Indeed,” the Report continues, “since the collapse in demand in 2009 (when growth hit a negative 5.1 percent level), demand growth in the market has remained essentially flat to slightly negative.”

Past As Prologue?

The Report notes that business spending on legal services from 2004 to 2014 grew from about $159.4 billion to $168.7 billion — “a modest improvement over a ten-year period. But if expressed in inflation-adjusted dollars, the same spending fell from $159.4 to $118.3 billion, a precipitous drop of 25.8 percent.”

What does that mean for future law graduates? The Report resists taking sides in the ongoing debate over whether the demand for law firm services generally will rebound to anything approaching pre-recession levels. It doesn’t have to because, the Report concludes, “it is increasingly clear that the buying habits of business clients have shifted in a couple of significant ways that have adversely impacted the demand for law firm services.”

One of the two shifts that the Report identifies doesn’t necessarily mean less employment for lawyers generally. Specifically, companies are moving work from outside counsel to in-house legal staffs. That should not produce a net reduction in lawyer jobs, unless in-house lawyers become more productive than their outside law firm counterparts.

The second trend is bad news for law graduates: “[T]here has also been a clear — though still somewhat modest — shift of work by business clients to non-law firm vendors.” In 2012, non-law firm vendors accounted for 3.9 percent of legal department budgets; it grew to 7.1 percent in 2014.

Beware of Optimistic Projections

The Georgetown/Peer Monitor Report is a reminder that the recent past can provide important clues about what lies ahead. For lawyers seeking to work in firms serving corporate clients, it sure doesn’t look like a lawyer shortage is imminent.

So what will be the real-life source of added demand sufficient to create market equilibrium, much less a true lawyer shortage? Anyone predicting such a surge has an obligation to answer that question. As the Report suggests, general claims about population growth or the “ebb and flow” of the business cycle won’t cut it. Along with the rest of the economy, the profession has suffered through the 2008-2009 “ebb.” The economy has returned to “flow” — but the overall demand for lawyers hasn’t.

Here are two more suggestions for those predicting a big upswing from recent trends in the demand for attorneys. Limit yourselves to the segment of the population that can actually afford to hire a lawyer and is likely to do so. Then take a close look at individual law school employment results to identify the graduates whom clients actually want to hire.

EXPLAINING ABA INTRANSIGENCE

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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)

UNFORTUNATE COMMENT AWARD

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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.

LAW SCHOOL NON-LEADERSHIP

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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 Journal, Cooley 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.