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.”

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.

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.