Illinois Admissions Data Fraud Update

The University of Illinois College of Law issued a final report today upon the conclusion of its investigation into inaccurate class profile data shared by the College of Law. We have attached the press release to the end of this post, as well as links to the final report and several statements by the University of Illinois representatives.

Not only are the law schools inolved in intentional fraud losing credibility, but so too are the law schools that do not stand up against these bad actors. All LSAC-member law schools need to demand that LSAC audit all admissions data for the past ten years.

Press Release: College of Law Student Profile Data Inquiry Complete

URBANA—The University of Illinois today issued a final report upon the conclusion of its investigation into inaccurate class profile data shared by the College of Law. The report concluded that the intentional inaccuracies were limited to six of the 10 years reviewed, that a single individual was solely responsible for these inaccuracies, and that the college lacked adequate controls to prevent, deter and detect such actions.

In addition to its findings, the report included a set of eight recommendations, including correction of the erroneous data, implementation of “best practice” processes and controls that include data monitoring, auditing and segregation of duties as well as steps to ensure a continued University culture of integrity and ethical conduct. During the course of the investigation, the college’s assistant dean of admissions was placed on administrative leave and subsequently resigned.

The investigation found that admissions decisions, including scholarship awards, appear to have been made based on the true data originally provided by the Law School Admissions Council (LSAC), the national admissions data clearinghouse. And it doesn’t appear that any students whose data were changed had any knowledge of those changes. In other words, there is no information indicating that changes to individual Law School Admission Test (LSAT) scores or the grade point average (GPA) of any students affected any admissions decisions on particular applicants to the College of Law. The 114-page report (www.uillinois.edu/our/news/2011/Law) is the culmination of an investigation that began Aug. 26 after the University Ethics Office was alerted to potential discrepancies in student profile data—median LSATs and GPAs—for the current College of Law Class of 2014 that had been posted on the college website and disseminated in emails.

Following preliminary confirmation of the discrepancies by the ethics office, the Office of University Counsel informed University President Michael J. Hogan, the Chancellor of the Urbana-Champaign campus and College of Law leadership. At Hogan’s directive, the University engaged independent outside legal counsel and forensic data analysts to assist in the inquiry. The primary investigative team consisted of the law firm Jones Day, operating under the direction of Theodore Chung, and data analysis firm Duff & Phelps, operating under the direction of Margaret Daley. The report was prepared by Jones Day and Duff & Phelps under the direction of Donna McNeely, the University’s ethics officer, and Scott Rice, the chief legal counsel for the University’s Urbana-Champaign campus.

Hogan directed that the scope of the inquiry be expanded to include 10 years of data and that it go beyond median LSAT and GPA statistics to include the college’s acceptance rates, financial aid and scholarships, bar exam passage rates, and career placement data.

The investigative team spent two months conducting interviews, forensic data analyses and review of approximately 125,000 documents. The work included exhaustive comparisons of data from LSAC and the internal data reported by the law school.

“The report is detailed, thorough, and rigorous, and demonstrates how seriously the University and campus took the initial allegation,” Hogan said. “We are committed to the reliability of data and to a culture of transparency and integrity.”

“The campus has already begun to implement the recommendations in this report,” said Phyllis Wise, vice president of the University of Illinois and chancellor of the Urbana-Champaign campus. “Additionally, we will work with each of our colleges to ensure that appropriate checks and safeguards are in place to help ensure that all current and future data are accurate, complete and verifiable.”

The investigation determined that “the College reported and/or publicly disseminated inaccurate LSAT and GPA statistics with respect to the class of 2008 and the classes of 2010 through 2014.”

In four of the years, these inaccuracies were based on changes to the LSAT scores or GPAs of individual students that were received by the college from LSAC. In two of the years, no individual data were changed, however, the class LSAT statistics reported by the college differed from the data maintained by LSAC. In all six years, statistics reported by the college were higher than the LSAT and/or GPA values supported by the true student data. College profiles of the classes of 2005, 2006, 2007, and 2009 contained no such inaccuracies.

The investigation also revealed that “the college reported and/or publicly disseminated inaccurate acceptance rate data with respect to four classes—the classes of 2008, 2012, 2013, and 2014,” according to the report. “With the exception of 2008, these inaccuracies are attributable to both over-counting the number of applicants and under-counting the number of admissions offers for these classes.”

The investigative report concluded that Paul Pless, the college’s former assistant dean for admissions and financial aid, “knowingly and intentionally” miscalculated key data. The admissions dean was placed on administrative leave Sept. 7 and resigned from the University last week. Over his seven-year tenure, Pless had the responsibility for reporting this data, and the college showed steady, and occasionally dramatic, improvement in the main factors used to gauge the academic credentials of a law school class. According to the report, data analyses and the investigative records indicate that data discrepancies were not random or the result of inadvertent errors.

“Numbers were altered specifically, and often just slightly, to meet recruitment goals and ranking targets indicating an attempt to demonstrate that the College of Law brought in an even more highly credentialed class,” said Margaret Daley of Duff & Phelps.

The investigation found no information indicating that, prior to the commencement of the investigation, any person other than Pless knew that erroneous profile data had been reported or disseminated by the college.

The University publicly disclosed the matter Sept. 9 and subsequently released corrected profile data for the class of 2014 and for the classes of 2011, 2012, and 2013. It has kept the American Bar Association (ABA), the accrediting organization for law schools, informed of developments and fully cooperated with the ABA, which appointed fact finders who visited campus for its own investigation. The University will continue to cooperate with the ABA as it concludes its investigation and reviews the University’s report. The report was submitted to the ABA today.

The University also has been in contact with the rankings staff of U.S. News & World Report.

According to the investigative report, there is no evidence of intentional misreporting in any of the other areas examined in the inquiry–financial aid and scholarships, bar passage rates and career placement data.

“On behalf of the University of Illinois College of Law, I wish to apologize to the legal-academic community, our University, our alumni, and our students, who are among this nation’s most talented and dedicated future lawyers,” said Bruce Smith, Dean of the College. “The investigation has concluded that a single individual – no longer employed by the college – was responsible for these inaccuracies. The college takes seriously the issue of data integrity and intends to implement the report’s recommendations promptly and comprehensively. As the report properly recognizes, the College of Law remains one of the nation’s premier law schools. We are confident that we will justify that assessment with data that are accurate, transparent, and unimpeachable.”

The key recommendations among the eight made in the report are the following:

  • The college’s dean should promptly correct all erroneous data, conduct a comprehensive review of control procedures, and implement “best practices” for staffing and operations of the admissions office.
  • The college should implement “robust” internal monitoring and audit functions “to ensure that internal controls are functioning properly and that all data reported …are accurate and supported,” and should review whether “any other data for which a discernible risk of miscalculation or misreporting exists.”
  • The U of I and the college should embrace the opportunity to champion reforms that would be a model for heightened transparency, avoid placing undue emphasis on any particular data or factor in the admissions process, and continue to reinforce a culture of and commitment to openness and integrity.

Op/Ed in Today’s NY Post: Do law schools defraud students?

This op/ed is available in today’s NY Post. Read it online here.

Do law schools defraud students?

New York Law School and two other law schools are staring down the barrel of consumer-fraud class-action lawsuits. Attorneys representing recent graduates plan to soon add at least 15 more schools, including five in New York, to the list.

As the economy flounders and a jobs crisis looms for many employment sectors, law-school graduates are taking to the courts because they don’t have jobs.

It’s the economy, stupid? If only that were the whole story. The suits center on how law schools recruit students: Many encourage consumers to believe a law degree is their “magic ticket” to financial security.

The complaints accuse schools of misrepresenting job-placement statistics and violating state consumer-protection laws. They allege that schools provide information designed to mislead, deceive and prompt consumers into attending programs they’d otherwise have avoided.

In other words, these suits are about showing law schools that they don’t get more leeway than other industries in advertising the value of their services.
The shoddy-stats problem long predates the recession. Many laws schools have consistently advertised employment rates of 90 percent or more — numbers that count bar-tending jobs along with ones that actually require a law degree.

The American Bar Association accredits these schools, but doesn’t regulate how they advertise starting salaries. So schools can trumpet their graduates’ “median” starting salary of $160,000 on the basis of just 15 percent of the class.

And none of this is disclosed to the consumer.

Shouldn’t these graduates have known better than to rely on six-figure salaries and near-perfect employment rates as reason to apply to law school? Perhaps. But schools know from experience that applicants are optimistic — that consumers will believe inflated statistics that comport with those magic-ticket expectations. That a law school would be less than forthright simply does not register on people’s radars.

And despite general misgivings about lawyers, eager young college grads meet encouragement every step of the way. Ask an elementary-school child’s parents whether they want their kid to go to law school someday and you begin to understand what makes law school so compelling.

This doesn’t paint prospective law students or their families in an enviable light. They are a product of a prestige-obsessed culture caught in an unwise investment decision. But sympathy isn’t needed for legal redress. Schools have failed to follow very basic rules for advertising their services. And now they could find themselves on the hook for millions of dollars.

These problems affect more than just the legal profession. This year, ABA-approved law schools will get at least $4 billion in taxpayer support, thanks to the government’s decision in 2010 to directly lend to students. But when graduates can’t find jobs that allow full loan repayment, they either default or sign up for hardship programs. The taxpayers are on the hook for the lost interest income and unpaid loan principal.

These lawsuits and the fraudulent behavior they target are both symptomatic of greater structural problems with legal education. Tuition has far outpaced inflation, and it’s not clear whether law schools can figure out how to function if they must reduce the cost of obtaining a law degree.

Whether tuition drops because consumers finally receive the real employment statistics, or because the government stops lending essentially unlimited amounts of money to students, schools will need to either reimagine the kind of education they provide or close down.

In all of this mess, one thing is for sure: Continued pressure from lawsuits, Congress and other reform advocates will push law schools to honestly evaluate the American legal-education model. And reimagining a broken model will take a lot more than simply getting people their day in court.

Kyle McEntee is executive director of Law School Transparency (lawschooltransparency.com), a nonprofit dedicated to advocating for reform in legal education. Patrick J. Lynch is the group’s policy director and an environmental attorney in Santiago, Chile.

Case Update: Amended Alaburda Complaint Includes New Allegation

With the recent joint announcement by Law Offices of Dave Anziska and Strauss Law PLLC that the firms have drafted complaints against 15 ABA-approved law schools and intend to file them as class actions, we thought it would be a good idea to revisit the first class action against a law school for misleading employment information. We reached out to the lead attorney handling Alaburda v. TJSL, Brian Procel of Miller Barondess, LLP, for an update on where things stand.

The most recent Amended Complaint (available below), filed September 15th, 2011, contains a new allegation (our emphasis):

5. Furthermore, TJSL also misleads students by concealing the fact that these post-graduate employment figures are based on a small sample of graduating students rather than the entire class of graduates. Specifically, TJSL conceals the fact that its statistics are based on surveys and questionnaires that are sent to only a fraction of its graduates. Not all graduates receive surveys or questionnaires.

If discovery reveals the bolded to be true, the school may have more to worry about than the Alaburda complaint.

Risk of ABA Sanctions?

Many schools have defended the gaps in their employment information by stating that graduates simply don’t respond to their requests, and that nothing the school does can get graduates to voluntarily report more and better data. This conclusion is suspect, given that graduates are less likely to report when they feel let down by the school. A high non-response rate should raise eyebrows about the quality of a school’s services. But purposely not contacting certain graduates, if substantiated, may constitute a violation of the ABA’s Accreditation Standards. This would make TJSL subject to probation or even a loss of accreditation.

Such sanctioning could happen irrespective of whether Alaburda’s attorneys are successful in recovering under one or more claims. As weak as the ABA’s current accreditation standards are, law schools must publish “basic consumer information . . . in a fair and accurate manner reflective of actual practice.” What constitutes “basic consumer information” has in the past been restricted only, in practice, to the overall employment rate and bar passage data. (This means that schools could technically present any other employment information, e.g. salary statistics, in an inaccurate manner without risking its accreditation.)

But a pattern of failing to survey some graduates looks like it would constitute a violation of the standards, particularly if the behavior was motivated by a belief that the unsurveyed graduates are likely to report undesirable outcomes. Schools are all over the ethical map in terms of how to creatively count or massage the data graduates report to them, but an outright failure to even contact some graduates should not be ignored by the ABA.

Current Students Suing?

Otherwise, Alaburda’s lead attorney is “optimistic the class will be certified” given that “the alleged misrepresentations are uniform.” Keep in mind, the class includes not only recent graduates but also current law students. Much of the attention in the media has focused on how graduates are bringing claims against their alma maters, but both the TJSL complaint and the complaints against Cooley and New York Law School contemplate including current students. At least one of the draft complaints to be filed against the 15 additional law schools also lists current law students as eventual members of the class. This could make for an interesting development if any of the classes are certified. Current students would continue to pay tuition while simultaneously waiting to see if they can recover for the initial fraudulent acts that got them into the school.

Note: as with the two other firms handling claims against law schools, Mr. Procel reports that they “have received dozens of inquiries from graduates of other law schools who are interested in filing suit.”

Update: Exhibits for Class Action Press Call

Documents are attached below. In addition read LST’s statement here.

Breaking: 15 more ABA-approved law schools to be sued

Two law firms, Law Offices of David Anziska and Strauss Law PLLC, have announced their intention to jointly file class action lawsuits against 15 more U.S. law schools (full press release below). The law schools are located in seven states:

  • California: California Western School of Law, Southwestern Law School, and University of San Francisco School of Law (3)
  • Florida: Florida Coastal School of Law (1)
  • Illinois: Chicago-Kent College of Law, DePaul University College of Law, and John Marshall School of Law (3)
  • Maryland: University of Baltimore School of Law (1)
  • New York: Albany Law School, Brooklyn Law School, Hofstra Law School, Pace University School of Law, and St. John’s University School of Law (5)
  • Pennsylvania: Villanova University School of Law and Widener University School of Law (also has a campus in Delaware) (2)

These complaints will follow previous complaints filed against New York Law School, Thomas M. Cooley Law School in Michigan, and Thomas Jefferson School of Law in California.

With these lawsuits, nearly 10% of all ABA-approved law schools across eight states will be accused of tortiously misrepresenting job placement statistics and violating state consumer protection laws. As with the previous complaints, the relief sought will include tuition reimbursement, punitive damages, and injunctive relief such as mandatory auditing of employment data and cessation of false advertising tactics.

LST is a forward-looking organization focused on improving legal education through policy efforts, thus our interests do not adequately align with plaintiffs seeking to be made whole. As such, we will not be directly involved in filing and prosecuting these lawsuits. Nevertheless, we will join these law firms on a media call this afternoon because of the role that class action lawsuits can play in incentivizing change through highly visible impact litigation. We will help put these lawsuits in context for journalists unfamiliar with law school consumer information issues.

These cases will create more awareness among prospective law students that the employment statistics advertised by these law schools do not mean what prospectives tend to think they mean. It is our hope that these complaints, along with future claims made against other law schools, will help bring about broad social change by altering how law schools operate and by pressuring the ABA Section of Legal Education to fulfill its regulatory duties. In the meantime, LST will continue seeking ways to expand the debate about legal education reform and to help usher in a new approach to the recruitment and training of attorneys and judges.

Press Release

Post-Graduation Employment Rates at Fifteen Law Schools Questioned

October 5, 2011
New York, NY
FOR IMMEDIATE RELEASE

Law Offices of David Anziska and Strauss Law PLLC announced today that they are seeking to file class action complaints challenging the post-graduate employment rates reported by the following 15 schools:

1) Albany Law School, which reports rates of between 91% and 97%;
2) Brooklyn Law School, which reports rates of between 91% and 98%;
3) Hofstra Law School, which reports rates of between 94% and 97%;
4) Pace University School of Law, which reports rates of between 90% and 95%;
5) St. John’s University School of Law, which reports rates of between 88% and 96%;
6) Villanova University School of Law, which reports rates of between 93% and 98%;
7) Widener University School of Law, which reports rates of between 90% and 96%;
8) University of Baltimore School of Law, which reports rates of between 93% and 95%;
9) Florida Coastal School of Law, which reports rates of between 80% and 95%;
10) Chicago-Kent College of Law, which reports rates of between 90% and 97%
11) DePaul University School of Law, which reports rates of between 93% and 98%
12) John Marshall School of Law (Chicago), which reports rates of between 90% and 100%
13) California Western School of Law, which reports rates of between 90% and 93%;
14) Southwestern Law School, which reports rates of between 97% and 98%;
15) University of San Francisco School of Law, which reports rates of between 90% and 95% percent

The average debt load for 2009 graduates of these fifteen schools is $108,829.4. “The lawsuits against New York Law School and Thomas M. Cooley Law School are prompting many recent law school graduates with high debt loads and disappointing job prospects to question the employment rates reported by their schools” stated David Anziska. “The numbers reported by the schools just don’t comport with the reality of the legal job market. We hope that litigation, combined with pressure from regulators, applicants, students and alumni changes the way legal education is marketed and provides compensation to those who may have been mislead in the past.” he added.

Law Offices of David Anziska and Strauss Law PLLC are advising graduates of the above schools that they may have certain legal rights and should contact David Anziska at david@anziskalaw.com or visit www.anziskalaw.com to learn more.

Law Offices of David Anziska and Strauss Law PLLC will be hosting a media call to explain the current status of litigation regarding law schools’ post-graduate employment data and to address the nation-wide problem of high debt burden and low employment rates among recent graduates. Joining the firms on the call will be Kyle P. McEntee and Patrick J. Lynch from Law School Transparency, a Tennessee-based non-profit whose mission is to improve the quality and presentation of post-graduate employment data.

Class Actions as a Tool of Social Change

Attorneys from Kurzon Strauss, who are representing the plaintiffs in the class action lawsuits filed today against New York Law School and Cooley, hosted a conference call this afternoon to discuss the suits. Although they could only say so much, the Kurzon Strauss attorneys were able to share their thoughts on the law school transparency debate and where these two lawsuits (and Alaburda v. Thomas Jefferson School of Law) fit into the broader landscape of reforming legal education.

It is clear that these attorneys view class actions as tools of social change. They are looking for systematic change to how law schools advertise their services to prospective students. The team noted that clearer, disaggregated information will not only hold schools accountable, but reward the separation in post-graduation outcomes that exists for some schools but isn’t apparent because of the reporting standards. To them, this is a matter of “trying to restore rationality to the market.”

They emphasized that this was not a matter of the quality of educations received by students at either Cooley or NYLS;and they were especially proud to be using a Cooley alumnus in the suit against Cooley. Rather, this is “more like false advertising than products liability.” The attorneys are ultimately after helping prospective law students understand what the real placement rates are at law schools, and what salaries graduates really make. “Law schools need to be held accountable,” said one of the Kurzon Strauss attorneys. He added that it is not just one or two schools that need to be held accountable, but that many schools need to be and that the time is now for change.

The decision to pick NYLS and Cooley was influenced by the schools being “JD factories.” As the complaints (Cooley, NYLS) pointed out, Cooley and NYLS enroll the largest incoming classes of any law school in the country. However, one attorney implied that there are likely more lawsuits on the way because misleading statistics are a “dirty industry secret,” though he did not imply either way whether Kurzon Strauss would be counsel.

Earlier: Breaking: Class Action Suits Filed Against Cooley and NYLS

Breaking: Class action suits filed against Cooley and NYLS

We have just been informed that Kurzon Strauss, the law firm recently sued by Thomas M. Cooley Law School for defamation, will represent plaintiffs in two class action lawsuits against Cooley and New York Law School. The press release, complaints, and summons are attached below.

Both Cooley and NYLS have been in the news lately. Recently, the ABA Section of Legal Education Council acquiesced to Cooley opening a Florida campus. David Segal, writer for the New York Times, targeted NYLS in his latest piece on law schools. (For NYLS’s response, see here.) We also wrote a piece, which is cited in the NYLS complaint, on NYLS’s deceptive practices in April.

We will update this article throughout the day as we learn more.

Updates:

Commentary

Of note, the plaintiffs in the Cooley suit are represented by a 2006 Cooley graduate, Steven Hyder of The Hyder Law Firm, in addition to Kurzon Strauss. This is particularly interesting because Cooley received some pointed criticism for not using its own graduates when filing its defamation suit against Kurzon Strauss.

Readers may also remember that a Cooley graduate, Zenovia Evans, went on a hunger strike for law school transparency.

Both suits are motivated by a goal of transparency:

This action seeks to remedy a systemic, ongoing fraud that is ubiquitous in the legal education industry and threatens to leave a generation of law students in dire financial straits. Essentially, Plaintiffs want to bring an element of “sunlight” or transparency to the way law schools report post-graduate employment data and salary information, by requiring that they make critical, material disclosures that will give both prospective and current students a more accurate picture of their post-graduate financial situation, as opposed to the status quo where law schools are incentivized to engage in all sorts of legerdemain when tabulating employment statistics.

Gomez-Jimenez v. NYLS

  • Points out Dean Matasar’s public recognition that law schools at times exploit students and that law schools and the academy have a “moral responsibilty” to either shut schools down or fix poor outcomes.
  • Alleges two basic, written uniform representations
    • Reporting misleading Nine-month Employment Rates
    • Reporting inflated mean salaries
  • Calls NYLS a “JD-factory”
  • States that there is no place for prospective students to find NYLS’s real employment numbers.
  • “By playing fast and loose with its employment data, NYLS creates an impression of bountiful employment opportunity that in reality does not exist.”
  • “[NYLS] continues to make the fantastical claim that the overwhelming majority of its graduates are gainfully employed.”
  • “NYLS students graduate on average with a whopping $119,437 in loans, placing them in the top 17th percentile of indebtedness among all law school graduates.”
  • “[T]he law school industry today is much like a game of three-card monte, with law schools flipping ace after ace, while a phalanx of non-suspecting players wager mostly borrowed money based on asymmetrical information on a game few of them can win.”
  • Claims: a) New York’s Deceptive Acts and Practices Law, NY General Business Law §349, et seq.; b) Fraud; and c) Negligent Misrepresentation.
  • NYLS increased its first-year class by over 30 percent in 2009, up to 736 students (its largest class ever). This is the second largest incoming class in the country.
  • NYLS Law Professor, Randolph N. Jonakait: “At a school like New York Law, which is toward the bottom of the pecking order, it’s long been difficult for our students to find high-paying jobs…Adding more than 100 students to an incoming class harms their employments prospects. It’s always been tough for our graduates. Now it’s tougher.”
  • “NYLS, by virtue of its participation in NALP’s annual employment survey, clearly has the means to and actually does distinguish between various degrees of employment, and breaks down the exact percentage of its recent graduates who have secured part-time employment.”
  • “NYLS, as with any law school, has every incentive to perpetuate this mass deception, because they are not required by the ABA, Department of Education or any other governing body to independently audit or verify their employment data.”
  • “However, if NYLS was to disclose accurate employment data and the steep odds its graduates face in securing gainful employment, it would become abundantly clear to any rational purchaser how poor of an investment attending NYLS is.”

Plaintiffs

  • Alexandra Gomez-Jimenez: 2007 NYLS graduate; practicing attorney who is a member in good standing of the New York Bar; secured full-time, permanant employment about one year after graduation; she now has her own law firm.
  • Scott Tiedke: 2009 NYLS graduate; practicing attorney who is a member in good standing of the New York Bar; since graduating law school, he has worked as a legal and compliance officer in an investment management firm.
  • Katherine Cooper: 2010 NYLS graduate; unemployed member in good standing of the New York Bar.

Relief Sought

  • Preliminary and injunctive relief enjoining Defendants, their agents, servants, employees and all persons acting in concert with them from continuing to engage in their unlawful recruitment program and manipulation of post-graduate employment data and salary information, and all other unfair, unlawful and/or fraudulent business practices alleged in the complaint and and that may yet be discovered in the prosecution of this action.
  • Injunctive relief ordering that NYLS retains unrelated, independent third-parties to audit and verify post-graduate employment data and salary information
  • Restitution and disgorgement of all tuition monies remitted to NYLS, totaling $200 million.
  • Damages
  • Punitive damages
  • Attorneys’ fees and expenses pursuant to all applicable laws
  • Prejudgment interest

MacDonald v. Cooley

  • Claims: Michigan’s Consumer Protection Act, MCLS §445.901, et seq.; Fraud; Negligent Misrepresentation.
  • Points out how Cooley is the largest law school in the country, “Churning out nearly 1,000 newly-minted JD graduates each year.”
  • Alleges the school has employed “Enron-style” accounting methods, a phrase coined by Professor Bill Henderson in David Segal’s January New York Times article.
  • Claims that despite the school’s advertised employment rate of 80% or higher, if the school were to disclose the percentage of only those “graduates who have secured full-time, permanent positions for which a JD degree is required or preferred,” the percentage could be “30% or lower.”
  • Alleges the school “grossly inflates its graduates’ reported mean salaries” and that the reported medians are not statistically meaningful.
  • Refers to prospective law students as “naïve, relatively unsophiscicated consumers” who are basing their decision to “purchase” a law degree from Cooley “based on asymmetrical information.”
  • “According to US News, Thomas Cooley has the lowest admissions standards of any accredited and provisionally accredited law school in the country. For 2010, it accepted approximately 83 percent of all applicants, an acceptance rate that is nearly 15 percentage points more than the second least selective law school, Phoenix School of Law. The mean LSAT score for incoming students is 146 and the mean undergraduate GPA is 2.99, both lows for all accredited and provisionary accredited law schools.”
  • “In marketing itself to students, Thomas Cooley makes a number of bold, if not incredulous statements that are incommensurate to its low academic and reputational standings in the legal marketplace.”

Plaintiffs

  • John T. MacDonald Jr.: 2010 Cooley graduate; former Naval Officer who served four years and received an honorable discharge prior to attending law school; practicing attorney in good standing with the Michigan Bar; could not find full-time, permanent legal employment and currently operates his own law firm.
  • Chelsea A. Pejic: 2006 Cooley graduate; practicing attorney in good standing with the Illinois Bar; could not obtain gainful legal employment and was unemployed for a long period of time despite circulating hundreds of resumes; has worked as a volunteer staff attorney and temporary contract attorney and has briefly operated her own firm.
  • Shawn Haff: 2010 Cooley graduate; practicing attorney in good standing of the Michigan Bar; could not find full-time, permanent legal employment and was forced to take temporary, contract assignments reviewing documents; currently has his own law firm.
  • Steven Baron: 2008 Cooley graduate; currently unemployed, despite having circulated hundreds of resumes since graduation.

Relief Sought

Seeks refunding or reimbursement to current and former students, an injunction against Cooley’s marketing practices, auditing by an independent third party, and attorneys’ fees.

Press Release

Lawsuits Seek to Reform Reporting of Post-Graduate Employment Data

Two class action lawsuits alleging fraud, negligent misrepresentation and deceptive business practices were filed today against New York Law School (“NYLS”) and Thomas M. Cooley Law School (“Thomas Cooley”). The suits allege that the schools knowingly inflate reported rates of post-graduate employment and salary statistics to recruit and retain students. The putative class actions were filed by three NYLS graduates and four Thomas Cooley graduates, respectively.

“These suits are not just about NYLS and Thomas Cooley – we believe the practice of inflating employment statistics and salary information is endemic among law schools” stated David Anziska an attorney at Kurzon Strauss LLP (“Kurzon Strauss”). “We hope these suits bring systematic change in the way legal education is marketed by making transparency and accuracy the rule, not the exception. Our efforts to bring about that change begin today.”

In addition to seeking monetary relief for current and former students, the suits seek to ensure that law schools report accurate post-graduate employment data that allows prospective students to make an informed decision regarding whether to invest in a law degree. The suits allege that to recruit students for their programs – which cost tens-of-thousands of dollars per-year – law schools, including NYLS and Thomas Cooley, misrepresent their graduates’ employment prospects by misclassifying graduates who have only secured temporary or part-time employment as being “fully” employed, excluding graduates who do not supply information from employment surveys, and creating post-graduate “jobs programs” into which they hire their own graduates.

“We are bringing these suits because thousands of young lawyers, like the plaintiffs, struggle to purchase a home, raise a family and make investments because they leveraged their future to a law school based on inaccurate information,” stated Jesse Strauss, a Kurzon Strauss partner. “It is time for the legal academy to own up to this problem.”

To help prosecute the Thomas Cooley lawsuit, Kurzon Strauss has retained as local counsel Steven Hyder of The Hyder Law Firm, PC, who is a 2006 graduate of Thomas Cooley.

The cases are Gomez-Jimenez et al. v. New York Law School, Index No. Unassigned (electronically filed), (Supreme Court, New York County) and MacDonald et al. v. Thomas M. Cooley Law School, 11-CV-00831 (W.D.MI).

Kurzon Strauss LLP is one of the premier New York based commercial litigation and corporate transactional law firms. For more information, log on to www.KurzonStrauss.com.

TJSL Representative Speaks Out About Class Action Suit

Despite news of Alaburda v. Thomas Jefferson School of Law breaking the day before the holiday weekend, the legal community has been abuzz about what the first class action suit filed against a law school for misleading consumer information means for TJSL, prospective law students, and the legal profession. This post looks at some of the responses thus far.

Many commenters have been debating the merits of this suit and whether the class will be certified. Others are wondering whether more lawsuits will follow in other states against other schools. And many commenters suggest that the ABA and/or U.S. News should be joined as defendants. Social media traffic to our website alone was substantial, suggesting that members of the legal profession are very interested in the case and may continue watching it closely.

Comments from the Parties

Ms. Alaburda’s attorney, Brian Procel, had this to say to Sara Randazzo when she first broke the story at the Daily Journal (subscription required):

This lawsuit is about ensuring that law schools are held to the same standard as other businesses and that they are not permitted to misrepresent information.

Ms. Randazzo also reports that:

Beth Kransberger, associate dean of student affairs at Thomas Jefferson, said the school has always “reported honestly and with integrity” when providing data to various agencies, including the American Bar Association and the National Association for Law Placement.

Ms. Kransberger then added:

A law degree remains an amazingly versatile degree, and that continues to be what drives us.

Ms. Kransberger made additional comments to Karen Sloan in the National Law Journal:

The school has always followed the guidelines established by the ABA. We’ve always been accurate in what we report, and we’ve always followed the system given to us by the ABA.

This lawsuit is very much about a larger debate. This is part of the debate about whether it’s practical to pursue a graduate degree in these difficult economic times.

The Reality of TJSL’s Comments

Ms. Kransberger’s comments about the ABA Section of Legal Education are not surprising, as they will represent a crucial part of TJSL’s substantive legal argument. In particular, the law school hopes to show that it has acted properly by responding truthfully to the ABA questionnaire and NALP survey each year.

This conflates two separate acts by TJSL: reporting and presenting employment data. Although false reporting would be problematic for TJSL for each cause of action, as they focus on misrepresentations, acts of concealment, and misleading statements, TJSL could have reported true data to the ABA, NALP, and U.S. News and Ms. Alaburda would not be precluded from recovering under any of the actions.

As we have continuously emphasized, the issue is how law schools present consumer information to the public, not only what they report to the ABA, NALP, and U.S. News. (Although truthful reporting may be an issue at some schools, especially in light of the Villanova Law scandal, many, many more law schools mislead prospective students, intentionally or unintentionally, with how they choose to present consumer information.)

Law schools deserve the brunt of the blame for the current lack of quality employment information, including the provision of misleading information, even though the ABA Section of Legal Education has a responsibility to regulate under its accreditation authority. It is worth noting, however, that the Section only has to act because schools do not voluntarily release the information prospective students need to make an informed investment. The responsibilities of law schools to prospectives and the profession are not absolved or delayed because the Section regulates law schools; nor does it matter that the Section is considering more careful regulations. The failure of the Section to monitor whether schools are behaving legally is an argument against the Section, not in favor of a particular law school.

These responsibilities are confirmed by Standard 509, the ABA’s (minimum) consumer information standard. Standard 509 is just one of the Section’s standards that law schools must meet to obtain and retain ABA approval. Compliance with this standard in particular is at the core of Ms. Kransberger’s claim that “[TJSL] has always followed the guidelines established by the ABA.”

Standard 509: Basic Consumer Information
(a) A law school shall publish basic consumer information. The information shall be published in a fair and accurate manner reflective of actual practice.

Interpretation 509-4
Standard 509 requires a law school fairly and accurately to report basic consumer information whenever and wherever that information is reported or published. A law school’s participation in the Council-designated publication referred to in Interpretation 509-2 and its provision of fair and accurate information for that book does not excuse a school from the obligation to report fairly and accurately all basic consumer information published in other places or for other purposes.

In addition to the Interpretation above, Interpretation 509-1 provides a list of what information is considered “basic.” Concerning employment information, only the “any job at all” employment rate and bar passage statistics are included in the list, leaving it up to the interpreter to determine whether the list is exhaustive or whether other basic employment information must also be reported in a fair and accurate manner. We think it does. Under Standard 509, for example, it is not explicitly stated that a law school must fairly and accurately report the number of graduates employed in a fulltime legal job. However, it would be absurd to think a law school can unfairly and inaccurately report the number of graduates employed in legal jobs should the school volunteer that information. It is in part due to the inadequacy of this list that we have pushed for a revision of Standard 509.

Grounding a defense against misrepresentation by pointing out that a school complies with an ineffective standard should fail, particularly if the school is arguably not even in compliance. If a law school is aware that the information it shares does not adequately explain its post-graduation outcomes and is aware that the information misleads consumers, the law school is open to an investigation and potential sanctions by the Accreditation Committee. The fact that no sanctions have yet been issued is only a sign that the ABA hasn’t received any complaints, which hardly makes TJSL unique. In an email response to LST last month, Consultant Bucky Askew informed us that during his tenure as Consultant to the Accreditation Committee (since December 2005) there has not been a single complaint filed against any law school alleging violations of Standard 509. You can read more about the complaint process and how to file a complaint against your law school here

Perhaps most telling is that even the ABA doesn’t seem to think that TJSL’s tactics are in compliance. The Subcommittee on Standard 509, charged with improving Standard 509, also asserts that the kind of behavior that TJSL engages in is in fact misleading. According to the subcommittee, “a school that touts median salary information, without appropriate qualifiers, is misleading prospective students.”

Breaking: Class Action Suit Filed Against Thomas Jefferson School of Law

Update: Follow the latest on Alaburda v. TJSL here.

At least one graduate has chosen to seek judicial relief from her alma mater in a class action that could include over 2,300 graduates of Thomas Jefferson School of Law in San Diego, California. Sara Randazzo broke the news (subscription required) at midnight PDT in the Daily Journal. The story will be available in print Friday morning.

The complaint (see the case summary below) alleges that Thomas Jefferson School of Law (TJSL) has engaged in “fraudulent and deceptive business practices,” including “a practice of misrepresenting its post-graduation employment statistics,” and that “the disservice TJSL is doing to its students and society generally is readily apparent.” The complaint cites a number of news articles over the last few years, and quotes from law school faculty and administrators to demonstrate the widespread consensus that schools are engaged in unfair and misleading practices. You can check out the complaint for yourself here. The complaint was filed by lead plaintiff Anna Alaburda, a 2008 honors graduate of TJSL. Additional court documents are attached to this post.

This lawsuit is of historical significance. It is the latest example of the breaking trust relationship between law schools and their students, their graduates, and the profession. Law schools have a duty to be honest and ethical in their reporting and presentation of employment data. This lawsuit shows that at least some members of the profession believe these duties are legal requirements, in addition to being merely professional or educational in nature. Perhaps importantly for some critics, Ms. Alaburda decided to attend law school before the legal market collapsed and before stories of misleading information were widespread.

Current Employment Information

As of today, TJSL is still providing misleading employment information (the “TJSL Report”) on its website for the Class of 2009. Compounding the problem, TJSL has thus far declined to report any Class of 2010 information on its website, despite already collecting sufficient employment data about the class when they reported to NALP back in March of this year. Almost every law school could do a much better job educating prospective students about the nature of the jobs obtained by their graduates; TJSL is no different. The most serious fault we find with the TJSL Report is how the school misrepresents starting salaries.

The underlying data match for the TJSL Report and U.S. News-provided information

The TJSL Report claims that the school collected at least some data from 86% of graduates (respectable, though still putting them in the bottom 5% of all law schools), and that of those graduates 84.7% were employed. This means that 72.8% of Class of 2009 graduates were known to be employed, which is the same as what the career services office reported to U.S. News. Likewise, both sources indicate that 80% of the graduates known to be employed were employed in the private sector, i.e. working for law firms or in business & industry in some (any) capacity. This data match makes it possible for us to examine TJSL’s advertised placement success with the more detailed reporting rates submitted to U.S. News.

TJSL Salaries

Based on our calculations from the data submitted to U.S. News, only 17% of those working full time in the private sector reported a salary. This means that at most 22 graduates reported salary data for full-time, private-sector jobs to TJSL. (This puts TJSL in the bottom 10% of law schools by percentage reporting.)

We say “at most” because the U.S. News salary figures only include full-time jobs. Only about half of TJSL graduates had full-time jobs for the Class of 2009. Some of these were likely with law firms and in business, but probably not all of them. The only thing we gain from the information provided on the TJSL Report is that at least five salaries underly the average salary figures for law firm practice ($62,443) and for Business jobs ($90,267). Based on the other data, the average figures probably each only use data for a few more graduates than the minimum five. As such, the $90,267 and $62,443 average salaries are each based on data for between 2-8% of the entire class (for a total not to exceed 10%).

The substance of these salary averages is not apparent from TJSL’s Report or website. In fact, the picture which the published averages present is of a magnitude far more appealing than reality. The business salary average is significantly higher than the California mean salary, $83,977, for the business category according to NALP.

For law firm jobs, the problem is a little different. While the national mean salary for law firms is $115,254, that average is misleading on its face because 40% of the salaries used to calculate the average were $160,000 and 5% were $145,000. If we factor these salaries – the salaries most likely to be reported – out of the average, the average reduces to $80,007.

Although this average still likely skews high, the effect of large firm salaries on the adapted average is apparent. Those with higher salaries are far more likely to report. These salaries are also usually publicly known, thus the graduates do not need to report their salary to be included in these averages since schools can report any salaries they have reason to believe are accurate. This adjustment is not only common at law schools, but encouraged by NALP. As the TJSL Report states, “Our annual employment statistics are compiled in accordance with the [sic] NALP’s Employment Report and Salary Survey.”

The main point here is that the average salary reported in the TJSL Report skews high without context: no salary ranges, percentiles, or observational data besides the five-graduate floor has been provided. TJSL could, if it wanted, provide the following chart as specific context. This information, specific to graduates from all NALP-reporting graduates working in California, comes from NALP’s Class of 2009 Jobs & JDs. TJSL receives a copy of this report, since it is an active participant in NALP’s research. Our example uses all California salary information because 83% of TJSL’s graduates known to be employed were employed in California.

TJSL Data California Salary Data (All Grads)
Firm Type # Grads 25th Median 75th Middle 90% Avg.
2-10 Attys. 36 $52,000 $62,400 $72,000 $36,000 – $100,000 $63,526
11-25 Attys. 2 $60,000 $70,000 $80,000 $45,000 – $135,000 $77,096
26-50 Attys. 3 $70,000 $78,000 $95,000 $50,000 – $130,000 $83,152
51-100 Attys. 4 $79,000 $90,000 $135,000 $62,500 – $160,000 $105,449
101-250 Attys. 2 $100,000 $145,000 $160,000 $85,000 – $160,000 $135,171
251+ Attys. 7 $160,000 $160,000 $160,000 $140,000 – $160,000 $156,904

The total number of TJSL graduates in each category indicates that the salaries TJSL used to calulate its published average firm salary skews even higher than normal. If between 5 and 17 graduates reported a law firm salary, at least some were from jobs paying six figures. But it’s difficult to know how many of those were six-figure jobs because the employer category includes non-attorneys making significantly less than attorneys with the same employer. Of course, prospective law students could know all of this if the school had decided to tell them.

Overall, it is easy to see why a prospective TJSL student today would be misled into thinking that a $200,000 investment in the TJSL degree is worth it. It remains to be seen whether our analysis holds for previous years, as well as whether what we consider misleading is sufficiently fraudulent, misrepresentative, or unfair according to a Cali state court.

TJSL is not alone

Countless other law schools across the country engage in similarly misleading practices, making them equally at risk of facing a class action. Every law school has the opportunity to provide better information and better context for that information. Some schools are proactively reforming how they present employment data, but many more have not yet felt compelled to change their behavior. Lawsuits like this will make law schools quickly rethink how they promote their programs.
See a summary of the complaint after the jump »»

NYLS’s Deceptive Practices

We recently learned of an email sent to accepted students by William D. Perez, Assistant Dean of Admissions and Financial Aid for New York Law School. The email is a response to what Dean Perez considers to be misinformation about law schools in the media. In an effort to convince accepted students to reconsider NYLS, his email tries to balance out the discussion by sharing some positive facts about NYLS. You can view the entire email here (will appear in a lightbox).

Our issue is not that Dean Perez wants to allay fears about law school in general and NYLS in particular. Any school, especially one where the average debt for 2009 graduates borrowing was $119,437, should believe that its opportunities justify the cost of attendance and should share information that materially affects a prospective’s cost-benefit analysis. Our issue is that NYLS has not provided nearly enough information, either in Dean Perez’s email or in its publications, to support some of the claims made in this effort to recruit next year’s class. Next week, we will submit our concerns to Dean Perez and Dean Richard Matasar in the hopes they will act responsibly to resolve what is possibly a violation of accreditation Standard 509.

Dean Perez claims that “our graduates are getting jobs, earning money and able to repay their loans.” But available information demonstrates otherwise. At worst, Dean Perez has overstated this claim in a deceptive and irresponsible manner. At best, NYLS has failed to meaningfully portray the data he believes supports these propositions. We’ll begin by addressing the employment and salary information that NYLS provides to prospective law students, and then move on to discuss the (un)importance of loan default statistics.

Getting Jobs. Earning Money.

NYLS’s employment statistics webpage (“Statistics Page”) (source) is designed for prospective law students trying to answer questions about job opportunities at NYLS. But it takes specialized knowledge about the reporting process and access to third-party information to recognize that these numbers are misleading.

For starters, NYLS provides its nine-month employment rate (89.7%), the breakdown of its employed graduates (first table below), and some of their salaries (first and second tables below).

Salaries
Employer Type Percentage Range (Min-Max) Average
Private Practice 45.6% $28,000 – $160,000 $120,197
Coporate/Business 23.7% $50,000 – $96,000 $75,167
Government 8.2% $41,000 – $72,000 $56,054
Public Interest 16% n/a n/a
Judicial Clerkship 3.4% $42,000 – $58,200 $45,887
Academic 3.1% $40,000 – $45,000 $42,500

You might expect that this table reflects a breakdown of the 89.7% of its 440 graduates because this is the “employment rate for the Class of 2009″ as of February 15, 2010. This rate, although not unusual, is not what it seems. It’s actually an adjusted rate, which, until this year, U.S. News used for its rankings:

Employment Rate =
graduates known to be employed OR enrolled in FT degree program
+
25% of graduates whose employment status is unknown
total graduates – graduates who are unemployed and not seeking work

Based on Class of 2009 employment data submitted to U.S. News, we come to a rate of 89.6%. The result is off by .1% due to rounding error, but nevertheless confirms NYLS’s rate calculation. As such, the employer type breakdown reflects only 82.7% of the class, because those are the only graduates reporting an employer type.

Next we look at the salary information. Understanding the salary figures on this table requires understanding the size of the dataset. This is difficult based on what NYLS says about its size: “Approximately 20% of our 2009 graduates reported salary information.” There is no clarity about what the denominator is. It could be the entire graduating class (440), the number of graduates counted as employed using the adjusted rate (395, from the 89.7% rate), or the actual number of graduates with any job (364, from the 82.7% rate). We will assume that it uses 364 graduates as the denominator on the grounds that these are the only graduates who could be expected to report a salary.

From this, we know that the first table includes salaries for roughly 16% of the entire class (73 graduates). But we have no indication from the Statistics Page as to the distribution of graduates throughout employer types, other than knowing that zero graduates working public interest jobs reported a salary.

NYLS also breaks down the private practice employer type by the salaries attained. The below table breaks down the “Private Practice” row in the first table. Accordingly, this table reflects the job outcomes for 37.7% of the class, or 45.6% of the 82.7% of graduates who were employed.

Salaries
Law Firm Size Percentage Range (Min-Max) Average
501+ 20% $145,000 – $160,000 $159,500
251 – 500 6% $120,000 – $160,000 $155,000
101 – 250 4% $90,000 – $160,000 $136,667
51 – 100 4% $62,000 – $90,000 $81,750
26 – 50 3% $55,000 – $55,000 $55,000
11 – 25 11% $47,000 – $65,000 $57,000
2 – 10 51% $28,000 – $80,000 $54,583
Unknown 1% n/a n/a

The salaries are equally as problematic for this second table. Just as we cannot tell how many of those 73 graduates reporting a salary were in a particular employer type category, we cannot tell how many are working for law firms and represented in this table. Based on the distribution of salaries in the first table, at least 11 graduates were in categories other than private practice. This means that these salary figures by firm size represent at most 14% of the class when you combine all of the rows, though the number is assuredly smaller.

What does all of this mean? Although the Statistics Page includes a cautionary statement that only about 20% of graduates reported salaries, the information provided is still deceptive. It took numerous calculations and data from a third party to figure out how few graduates actually underlie these figures. Yet, when you read these tables, an unknowing prospective who is contacted by Dean Perez and told that “[NYLS] graduates are getting jobs, earning money and able to repay their loans” will see large salaries that can reasonably be taken as evidence of this advertised, short-term solvency. The method NYLS employs to present salary statistics can be persuasive to the unknowing applicant, but it clearly does not reflect reality when, for example, the advertised $159,500 salary average for graduates employed at 501+ attorney law firms reflects the average for, at most, 7.5% of the class.

Dean Perez claims that graduates are earning money, even though the school only reports what one-fifth of the Class of 2009 was earning. If his office has information on the other four-fifths, it would be a good idea to share it when making such claims, rather than lead prospectives to think that the salary information provided is reflective of actual practice. And if NYLS does not possess salary data for the other 80% of the class, then the administration needs to review its recruiting policies and determine whether these statements are designed to mislead and/or have the effect of misleading the consumer. We think they do. When only 62% of the entire class is working in a bar-required position, there’s ample room to be skeptical of the claims made by Dean Perez.

Dean Perez also claims that New York Law School had more favorable or comparable employment statistics than [Hofstra, Buffalo, Touro, Albany, CUNY, Pace, Syracuse, Fordham, Cardozo, Saint John’s, and Brooklyn]. These are important claims that require adequate evidence, regardless of the economic climate and media attention. In the context of the email, this claim is especially troublesome because it seeks to sway applicants by stating that, despite all of the criticism, this particular law school really is a worthwhile investment. That may be true (and we will not make that call), but the school cannot simply prove its value by comparing itself to the other New York schools. No school can prove its value this way without first having sufficient transparency about the post-graduation employment outcomes of its own graduates.

[See our data clearinghouse to see if you agree that NYLS has “more favorable or comparable statistics” compared to these other New York schools: NYLS, Hofstra, Buffalo, Touro, Albany, CUNY, Pace, Syracuse, Fordham, Cardozo, Saint John’s, Brooklyn.]

Paying Back Loans

Loan default rates, contrary to Dean Perez’s assumption, do not indicate the value of a program. With the federal Income Based Repayment and Income Contingent Repayment plans, no individual with federal student loans should default. Defaults merely suggest poor advice by financial aid offices and/or poor self-discipline. A graduate can make minimum wage and have significantly-reduced monthly loan payments, thanks to these programs. Both programs have their downsides: interest accumulates and can cause debts to balloon over the life of the payment plan, and in certain scenarios the debtor will be taxed on the forgiven debt at the end of the repayment period. But they are programs designed to make sure that people don’t default. If the default rates are low, the school should be applauded for providing sound financial advice, but it is hardly evidence that NYLS graduates are by-and-large doing well, particularly when we only know the salaries for 20% of the class.

Misleading The Consumer

Selective presentation is deceptive. The manner in which NYLS portrays salaries and job outcomes, while not outright lying, deceives the reader into thinking she is more informed about the employment opportunities at NYLS than she really is. Despite NYLS possessing better information (and even reporting some of that information to U.S. News), the school has declined to share information on the Statistics Page that it knows would be valuable, such as the fact that 58.4% of all 2009 NYLS graduates were employed full-time, while 45.2% were working full-time, bar-required jobs. Omission of such important, value-adding information is so obvious that it suggests NYLS actually intends to deceive. Such a perception has enormous ramifications for how people view legal education in this country. This behavior is precisely why we are prompting reform.

Law schools are sophisticated suppliers of a service; they understand what consumers want to believe as truth, particularly consumers facing full tuition costs and six figures of debt. With no incentive to do otherwise, schools hide or otherwise misrepresent the data that might scare applicants away. And when the applicants get wind of it through exposure in the media, we see responses like that of Dean Perez. Absent tougher regulations that require improved disclosure while prohibiting claims like these from being made without factual support, some law schools in the United States will continue undermining the educational purpose they are supposed to serve.