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: Senator Boxer Calls on ABA to Ensure Accurate and Transparent Reporting by Law Schools

Senator Boxer has sent LST a statement on the need for law school transparency.

Washington, D.C. – U.S. Senator Barbara Boxer (D-CA) today called on the American Bar Association (ABA) to improve its oversight of admissions and post-graduation information reported by law schools across the country.

Boxer’s letter follows news reports that have highlighted several law schools allegedly using misleading data to enhance a school’s position in the competitive and influential U.S. News and World Report annual rankings. Such inaccurate post-graduation employment and salary data can mislead prospective students into believing they will easily be able to find work as an attorney and pay off their loans despite a sharp decline in post-graduation full-time employment.

The full text of the Senator’s letter is below:

March 31, 2011

Stephen N. Zack
President
American Bar Association
740 15th Street, N.W.
Washington, DC 20005-1019

Dear Mr. Zack:

As you know, recent news articles have raised concerns about the reporting of admissions and post-graduation information by the American Bar Association and law schools across the country. It is essential that students deciding if and where to attend law school have access to information that is accurate and transparent. The ABA, as the accrediting body charged with oversight of the nation’s law schools, must ensure standards and accountability.

As the economy continues to recover from the recession, many new law school graduates are struggling to find jobs as attorneys. According to Northwestern University, at least 15,000 legal jobs with large firms have disappeared since 2008. The Bureau of Labor Statistics indicates that the number of people employed in legal services has decreased from a high of 1.2 million in 2007, to less than 1 million in 2009. Experts predict that fewer than 30,000 new attorney positions per year will be available to the more than 44,000 law school graduates entering the marketplace each year.

This very serious problem takes on greater significance when viewed in the context of news articles highlighting law schools that allegedly falsify post-graduation and salary information in attempts to increase their position in the annual U.S. News and World Report rankings.

Most students reasonably expect to obtain post-graduation employment that will allow them to pay off their student loan debts, and rely on this information – which may be false at worst and misleading at best – to inform their decision.

As reported in the New York Times and other publications, the ABA allows law schools to report salary information of the highest earning graduates as if it were representative of the entire class. Also, when reporting critical post-graduation employment information, law schools are not distinguishing between graduates practicing law full-time from those working part-time or in non-legal fields.

I understand that some ABA members have been pressing for reform, that the ABA has appointed committees to review ways to increase oversight and transparency, and that U.S. News and World Report has requested greater transparency from law school deans. These are good first steps, but more must be done to ensure potential students have a full understanding of the costs and benefits of a legal education.

I am requesting that you provide me with a detailed summary of the ABA’s plans to implement reforms to its current procedures to ensure access to accurate and transparent information for prospective law school students.

Thank you for your attention to this matter.

Sincerely,

Barbara Boxer
United States Senator

[also available on her website]

LST’s Proposal: The Job Outcome List and a National Salary Database

The 509 Subcommittee’s first draft proposal for a revised Standard 509 is a good start. But as we described in our analysis, the proposed revisions are only the first step towards greater transparency. The proposal does not go far enough to disaggregate the current employment information, resulting in a reporting standard that will still struggle to help match prospectives to the law schools that best meet their career objectives.

We have been working on our own proposal, separate from the LST Standard, for a few months now. We have discussed it with key people in the Section of Legal Education, law school administrators, and briefly with NALP’s Executive Director, Jim Leipold. It was born out of discussion at December’s Questionnaire Committee hearing. These conversations have helped shape The LST Proposal into a solution that meets the needs of all interested parties.

The LST Proposal

Our proposal can and should co-exist with the chart proposed by the 509 Subcommittee. Together, the proposals provide prospective students a quick overview of the employment opportunities at various schools while also allowing a more detailed, holistic view for those students who wish to delve deeper. We are hopeful that implementing the two proposals would result in more informed decisions and a more efficient allocation of students to the schools that best meet their career and educational objectives.

The LST Proposal has two core elements. First, each school would report graduate-level data about post-graduation employment outcomes on a “Job Outcome List.” For each graduate, schools would report, as applicable:

  • Employment status
  • Employer type
  • Full-time or part-time
  • Required credentials
  • Location
  • Whether the graduate received special funding
  • Job Source

[View the detailed categories on this chart]

These data are already reported to NALP by all but six ABA-approved law schools (St. Louis University, University of Kentucky, Columbia University, and the three law schools in Puerto Rico). The Job Outcome List would be publicly available.

Second, schools would report known salary data for each graduate. Schools also already report these data to NALP. However, unlike the data on the Job Outcome List, the salary data would not be publicly available. Instead, the Section of Legal Education would create a national database of salary data just like the database NALP already has and reports about in Jobs & J.D.s. The database would include all employment data contributed by law schools each year.

The result would be a public, national database of job outcomes and salaries that respects individual and employer privacy desires. Prospective students would use this database for a general idea of lawyer pay in certain locations for certain jobs, as well as an indicator of the short-term economic value recent graduates are attaining with each school’s J.D.

Mechanics of the National Database

Pairing a national salary database with school-by-school, disaggregated employment information would allow prospectives to understand entry-level salaries without identifying the compensation of any individual graduate. To do this, the database would provide salaries for small, though statistically significant, cross-sections of law school graduates. The cross-sections would be created by using the factors that many prospectives consider to be part of their career objectives: employer type, location, and key job characteristics.

For example, for the Class of 2009 graduates, the average starting salary of full-time bar-required jobs in Los Angeles at law firms with 51-100 attorneys was $97,287. The 10th, 25th, 50th, 75th, 90th salary percentiles are, respectively, $75,000, $80,000, $90,000, $95,000, and $145,000. In Atlanta, the average starting salary for the same category is $107,619, and the salaries percentiles are, respectively, $80,000, $90,000, $90,000, $130,000, and $145,000.

Under The LST Proposal, prospectives would be able to match these salaries to a school’s actual placement track record in different places in different jobs. Under the 509 Subcommittee’s current draft, if a school collects fewer than five salary data points for a particular category, schools report no salary information at all. Prospectives remain unaware of how graduates fared because the only information available is that Y graduates obtained jobs with 51-100 attorney law firms, with no indication of location or required job credentials.

In order to understand what these salary percentiles mean to a prospective student considering X school, each school must provide enough disaggregated information to allow prospectives to match outcomes to the national salary database. This connectivity is crucial to an operational national salary database. This is one function that the Job Outcome List would serve.

There are a few ways to design the database, and we are hopeful that the ABA, NALP, LST, and other interested parties can have open discussions about how to best execute this vision. Initially, it is our view that between one and five years of salary data, back-provided by NALP, can be aggregated to create a richer salary dataset. The number of years used would depend on the type of job and location, as salaries have shifted more or less for different cross-categories of employment outcomes. (E.g. New York City 501+ attorney firm salaries have remained relatively stable within at least the last three years.)

Additionally, it is our view that the narrowest salary picture should be provided whenever possible. If enough data exist for 51-100 attorney law firms in Atlanta, city-level figures should be available. If not, the database would provide the next narrowest regional dataset. These higher-level datasets might be Fulton County, Metro Atlanta, Georgia, the South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV), and the United States. The categories could also carve certain locations out of a larger geographical area. For example, one category might be 2-10 attorney law firms in Georgia minus Metro Atlanta. The possibilities hinge only on having large enough datasets. Regardless of whether the narrowest set is available, each higher-level dataset should be associable with each listed job outcome.

Other Advantages of the Employment Lists

The benefits of this proposal do not end with the addition of elaborate, privacy-respecting salary information to the marketplace. After all, the jobs graduates take are often based on more than salaries, so a proposal that aims to help match prospectives to their best fit cannot end with only salary information. To this end, the Job Outcome List will help prospectives understand the various kinds of jobs graduates take at particular law schools. Its components offer various insights into the entry-level market and how each school fits into that market.

Long-term Help

Focusing on a single year of data is dangerous, but an improved standard must start somewhere. The concern is certain to be more pronounced when there is more disaggregated information available for public consumption. The fear that prospectives will pay too much attention to the first year of new data, while grounded in reality, is but a consequence of improved transparency at law schools. The LST Proposal will be best after three or five years. At that point, prospectives would be more able to discern which schools can best meet their individual objectives. And that should be everybody’s goal.

The 509 Subcommittee’s Draft Proposal: An Explanation and Evaluation

This is our third post in a series of posts (see the first and the second) where we contemplate the 509 Subcommittee’s draft proposal and the facts needed to understand how it would advance transparency at ABA-approved law schools. This post will explain the new proposal and evaluate it using the three criteria we set out in the second post.

The Subcommittee’s Proposal

On March 14th, the Subcommittee released its first draft proposal for a revised standard for the reporting of employment data. David Yellen, dean of Loyola University Chicago School of Law and chair of the Standard 509 Subcommittee, will present this proposal to the Standards Review Committee on Saturday, April 2, 2011 in Chicago. We will provide updates on any changes that come out of the meeting.

The draft proposal has three parts: a memorandum explaining the subcommittee’s operating assumptions and goals, a new Standard 509(b), and a chart that each law school would be required to fill out and post on its website each year.

The Memorandum

In the memorandum, the Subcommittee states that the goal is to “provide more meaningful and consistent employment information to prospective law students . . . [that will] greatly assist prospective students in making informed decisions about whether to go to law school or which law school to attend.” Right away the Subcommittee recognizes that schools already gather a great deal of data, and that it follows that sharing more information with prospective students will require only a small (and, implicitly, justified) burden.

The Subcommittee describes the consumer protection standard, Standard 509, as “a vague standard” that enables schools to provide limited and hard-to-compare information. The fact that reporting practices vary so widely among schools makes it very difficult for prospectives to understand the employment outcomes of a particular set of graduates. What’s more, the Subcommittee continues to recognize that the presentation of information is occasionally misleading. This reflects previous comments made by Dean Yellen.

The memorandum then cabins the problems with the current information into two categories: employment rates and salary information. The Subcommittee establishes two principles regarding the the first category. First, “the percentages disclosed should be based on the entire graduating class, with only those known to be employed being counted as such.” The second principle regards the variety of jobs graduates take, and the problem of providing misleading impressions about the true successes of a school’s graduates. “[T]he best approach is to require schools to disclose more disaggregated data about . . . categories of jobs.” These categories include nonprofessional jobs, part-times jobs, temporary jobs, and jobs funded in part by the school.

Regarding the second category, the Subcommittee recognizes the limited utility of salary medians and the likelihood that readers will misunderstand what the medians refer to and how they are calculated. The Subcommittee proposes that “all salary information clearly indicate the number of respondents and percentage of all graduates included.” This is an important revision that will change the manner in which many schools currently portray salary statistics. For examples of how problematic this can be, check out LST’s data clearinghouse. (The linked example shows a school that reported a median salary of $160,000, despite it being the median for only about 16% of the entire class.)

Proposed Standard 509(b)

The first proposal made by the Subcommittee is as follows:

Standard 509. BASIC CONSUMER INFORMATION
(b) A law school must publicly disclose the employment outcomes of its graduates by preparing and posting on its website the attached chart.
(1) The employment information must be accurate as of February 15th for persons who graduated with a JD or equivalent degree between September 1 two calendar years prior and August 31 one calendar year prior.
(2) The information must be posted on the school’s website by March 31 each year.
(3) The information posted must remain on the school’s website for at least three years, so that at any time, at least three graduating classes’ data is posted.
(4) The information must be gathered and disclosed in accordance with the instructions and definitions issued by the Section’s Questionnaire Committee.
(5) Any additional employment information the law school discloses must be fair, accurate and not misleading.
(A) Any publicly disclosed statistics regarding graduates’ salaries must clearly identify the number of salaries and the percentage of graduating students included.

The proposed Standard 509(b) requires that schools publicly disclose the employment outcomes of the most recent graduating class as true on the first February 15th following graduation. Schools must disclose these outcomes, at minimum, on the “attached chart” by the first March 31st following graduation. It also requires schools to keep the chart on their websites for at least three years. Finally, it adds a catch-all in 509(b)(5) to protect against predatory, opportunistic practices. This specifically includes a solution to misleading median salary practices that some law schools currently use.

The Chart

[View the chart]

The proposed Standard 509(b) “attached chart” aims to exhibit the outcomes of the entire graduating class as of the first February 15th following graduation. The chart disaggregates the current information into smaller categories to illuminate the outcomes graduates achieve at a particular school. The chart is also the first official recognition by an arm of the Section of Legal Education that salary information is in fact “basic consumer information.”

There are two classes of categories on this chart: employment status and employment type. For each category and subcategory, schools must report the percentage of all graduates, rather than of only employed graduates, as well as the raw number of graduates included in the calculation. This decision aims to limit the impact of creative accounting and less than forthright attempts at collecting employment data from graduates.

The employment status class places all graduates into four exhaustive categories: employed, pursuing a graduate degree full-time, unemployed, and employment status unknown.

The chart breaks “employed graduates” into two subcategories. First, this category breaks all employed graduates into four exhaustive kinds of employment: full-time long-term, full-time short-term, part-time long-term, and part-time short-term.

Second, it breaks all employed graduates into exhaustive categories based on the credentials required (or preferred) to do the job: bar passage required, J.D. preferred, other professional, or non-professional. It then further breaks each of those categories into (the same) four exhaustive kinds of employment: full-time long-term, full-time short-term, part-time long-term, and part-time short-term.

The employment type class breaks all employed graduates into six exhaustive categories based on the type of employer: law firms, business & industry, government, public interest, judicial clerkships, and academic. Of those categories, the law firm and judicial clerkships categories are further broken down by type. The law firms are disaggregated by size and the clerkships are disaggregated by level of government (state or federal).

Finally, full time salaries will accompany each category (except solo practitioners) of full-time, employed graduates whenever there are at least five salaries reported in a given category. These salaries will be reported with a 25th, 50th, and 75th percentile, as well as the number of salaries used to create these salary quartiles. There is also a space for schools to report the total number of jobs they funded.

A Good Start, But More To Be Done

The 509 Subcommittee is off to a really strong start in reforming how schools report employment information. It was made clear to us that this is only a preliminary draft, and that the Subcommittee expects more changes will be made. We hope this is the case.

The principles guiding the Subcommittee are sound. It is true that the information must be meaningful, consistent, and help prospectives make informed decisions about whether to, and where to, attend law school. But the execution of these principles still leaves something to be desired. If approved as a new accreditation standard in its current form, the proposal would certainly help prospective students and drastically cut down on misleading statistics. At the same time, it runs the risk of only providing superficial comfort, because it would not help match students to the schools that best meet their career objectives as efficiently as legal education needs.

As we previously outlined, we will use three criteria to assess the draft proposal.

(1) Does it disaggregate the current information?
(2) Does it demonstrate the economic value of a school’s J.D.?
(3) Does disclosure operate on an accelerated schedule?

Does it disaggregate the current information?

This proposal does disaggregate the current information. It helps show the nature of the jobs graduates obtained and with whom the graduates were employed. But as evidenced by comparing this draft proposal to the LST Standard, the vague “employed at 9 months” standard, where “a job is a job,” can be disaggregated to varying degrees. We’ve concluded that this draft does not disaggregate the current information to an adequate degree.

The more disaggregated employment information is, and the more data provided at that degree, the more likely it is that there will be privacy norm concerns. With these norms in mind, there is a legitimate interest in not disclosing all of the employment data that law schools already collect. On the other hand, law schools already collect all of the data needed to help prospectives make informed decisions, so cost concerns are greatly overblown (as the Subcommittee recognizes). As such, the appropriate level of disaggregation must balance privacy norms against the usefulness of additional disaggregation to anybody trying to understand the entry-level market for a school’s graduates.

It is the job of the Section of Legal Education to use its regulatory power to enforce the right balance. The Section must force schools to share the appropriate level of disaggregated information and must not opt to require less useful information because law schools have competitive concerns. The important question thus becomes how much weight the Section of Legal Education should give to schools that believe that more disaggregated information could (i) hurt their recruiting efforts, (ii) cause prospectives to focus too much on the first job in making their law school decision (as opposed to something else the schools think prospectives should focus on), and (iii) cause confusion through information overload.

Among the opportunities for improvement is how well the proposal connects job outcome features together. It does not disaggregate the locations of these jobs and does not show how the job, employer, and location connect for individual graduates. For example, we might be able to tell that 60% of a school’s graduates are working at jobs that require bar passage, but we do not know what percentage of those are working in business & industry. Likewise, we might know that 15% of a school’s graduates work in 2-10 attorney law firms, but we cannot tell what percentage of those graduates are working there as attorneys. This is not merely a theoretical concern– a sizeable percentage of law school graduates work in non-attorney positions in law firms. The decision to disaggregate further directly contravenes the Subcommittee’s principle against providing misleading impressions about the true successes of a school’s graduates.

Part of the reason additional disaggregation is so important is that it would minimize the effect of national rankings on student decision-making by offering a window directly into what graduates shortly after graduating. With this proposal, a prospective’s choice might still hinge on what a school ranks each year in U.S. News rather than on how well a school can help a student achieve her goals. Prospectives need clarity about how a school fits into the legal hiring market.

After all, the Subcommittee’s stated goal is to help prospectives make “informed decisions about whether to go to law school or which law school to attend.” The proposed solution is only satisfactory insofar that the goal is to differentiate between schools using percentage differences in broad, albeit more disaggregated, categories. It will still be too difficult to know the challenges graduates face for achieving their career objectives, which usually include a combination of location, employer type, and required credentials. Without sufficient granularity, neither will prospectives as easily understand a school’s placement niches. All together, prospectives will still struggle to understand schools’ unique placement abilities.

Another issue with the Subcommittee’s method of disaggregation is that it actually creates new gaps in the information (though not to a debilitating extent) and thus an incentive for creative accounting. One of the purposes of disaggregating the nine-month employment rate is to limit how much schools hide employment outcomes. Unnecessary gaps undermine this purpose.

The total number of graduates in each subcategory, taken together, should equal the total number in the parent category. For example, the total number of graduates who are employed, unemployed, pursuing a graduate degree, or whose employment statues are unknown should equal the total number of graduates in the graduating class because the categories are exhaustive.

The unknown status category is very important for identifying gaps in the employment status data. However, an unknown category is missing from all other exhaustive groups except the group for type of law firms. The employment type category, required credentials subcategory, judicial clerkships subcategory, and the full time and part time (and corresponding long and short term) subcategories all need an unknown field so that the numbers in the subcategories all equal the parent category’s total number.

Helping prospectives understand where data gaps exist encourages them to ask the right questions and serves to limit false impressions due to extrapolating outcomes from unrepresentative segments of the graduating class. Unfortunately, allowing schools to report graduates as “unknown” in any category incentivizes schools to avoid learning or researching employment outcomes. However, it is more important that the gaps created by non-reporting graduates are readily identifiable. As such, all exhaustive categories and subcategories need to account for each graduate.

Does it demonstrate the economic value of a school’s J.D.?

It is a huge step forward for the Subcommittee to recognize salary information as “basic consumer information.” As of right now, the only standardized, school-specific salary information is courtesy of U.S. News. Until this year, even U.S. News salary information was too opaque.

The Subcommittee’s proposal does a decent job with highlighting what new graduates make and, accordingly, demonstrates some of the economic value of each school’s J.D. This new salary information would allow prospective students to roughly understand how well graduates can service their debts immediately after law school. For the Class of 2009, the average graduate had $98,055 of law school debt, which translates to about a $1200/month loan payment.

While the Subcommittee’s approach is useful and likely the best way for schools to report school-specific salary outcomes without using job-specific salary data, it is not the approach we think the Subcommittee should take. A better way would be to leverage the reported salary data of all law schools together the way NALP does in its annual Job’s and J.D.’s. Certainly, if prospectives knew about this publication, which costs non-members $90, they could use it to have a better understanding of entry-level salaries for law school graduates. But there is currently no way to bridge the gap between this salary information and an individual school’s graduates, and the Subcommittee’s proposal does not help on that front, so it is limitedly useful for those trying to decide which law school to attend.

The aforementioned lack of connectivity between employers, job credentials, and job location makes understanding how the new salary information impacts them – particularly for loan payments – very difficult. For example, a $160,000 starting salary for a new associate grows differently in New York City compared to Houston due to salary compression in years two through seven. Additionally, $70,000 in New York City does not go as far as $70,000 in Philadelphia, Raleigh, or Nashville. The geographic impact on the ease of loan repayment cannot be understated. Even if a prospective has the Job’s and J.D.’s book, that information can only take them so far because its salary breakdowns are very specific (e.g., attorneys in 2-10 person law firms in X city). Nothing in the new standard or chart helps answer these important questions.

There is a separate concern about whether each category would have meaningful salary information associated with it. For example, 10 may work at small firms, with only four reporting. In this case, the four salaries do not get reported and thus do not serve any use. They are simply swept away. However, if these four salaries were added to a national salary database, those four become 40 or even 400, and the result is meaningful salary information about jobs that wouldn’t otherwise have salary information. Unfortunately, this resource cannot be utilized on a school-by-school basis without more disaggregation. In our next post we will explain our proposal for doing this in depth.

Does disclosure operate on an accelerated schedule?

Yes. In striking this balance between cost concerns and the need for timely information about the most recent graduating class, the Subcommittee has paved the way for significant improvements beginning as early as next year. At the Questionnaire Committee hearing in December, law school administrators expressed concern that requiring schools to report information too soon would be too high of a burden given cost constraints. But by limiting the Standard 509 requirements to only data that schools submit to NALP in February/March, the Subcommittee erases these concerns. Even small career services staff will be able to comply with the standard provided they already report to NALP, which nearly every ABA-approved law school does. Given that collection methods are now mostly electronic (through Symplicity or other user-entry databases), assembling and posting the data according to the proposed Standard 509(b) would take very few work hours and limited financial resources beyond what schools already allocate voluntarily.

Concluding Thoughts

The goal of a revised Standard 509(b) must be to help students make informed decisions about which (if any) school best meets their career objectives. While a good start, we think that, as currently conceived, the Subcommittee’s proposal will fail to adequately achieve this basic goal.

We ask that each member of the Committee imagine herself as a prospective student trying to choose a school to invest thousands of hours and dollars into. Each member must then think about how soundly she can act after analyzing employment information reported according to the new standard, and consider how well she actually understands the school’s ability to help her achieve her career objectives. We suspect that this thought experiment would leave each member uncomfortably uncertain. This uncertainty, at a minimum, should be addressed through a non-theoretical exploration of the standard’s implications. Before accepting a new standard, the Standards Review Committee should compare a few schools using real employment information presented as it would be under the proposed revisions.

An improved Standard 509 has the ability to wage an important battle against the influence of U.S. News on the decision-making of prospective law students. But without sufficient disaggregation of the current employment information, the effects can only be minimal. Under the current proposal, it is still too easy to imagine a prospective student choosing the #55 ranked school located on the east coast over the #81 ranked school on the west coast because she does not know, for example, what to make of the schools’ minute differences in percentage employed in mid-sized firms as it pertains to her goals of working out west in a mid-sized firm. Without adequate information to dissuade her, she might come to the head-scratching conclusion that #55 must be better because it is ranked higher. This is bound to worsen now that there are 45 more schools ranked on a national scale.

Each year, the Section of Legal Education makes an effort to minimize the effect of national rankings. We are sure that almost every law school administrator would agree with the Section’s sentiments, and revising Standard 509 is the chance to show that these are not empty words. We look forward to working with the Subcommittee to improve this first draft.

Three Critical Features for the ABA’s Collective Solution to Employment Reporting

This is our second post in a series of posts (see the first) where we contemplate the 509 Subcommittee’s proposal and the facts needed to understand how it would advance transparency at ABA-approved law schools. This post provides three criteria for us to use to judge the ABA’s actions. In our next post, we will evaluate the new proposal using these criteria.

Whatever standard the Standards Review Committee and Questionnaire Committee together adopt, it must:

(1) Disaggregate the current information
(2) Demonstrate the economic value of a school’s J.D.
(3) Operate on an accelerated schedule

(1) Disaggregate the current information

 
The most serious handicap of the current reporting standards is that the standards allow outcomes to be hidden in aggregate form. For prospectives seeking to make an informed decision, and law schools seeking to fulfill their educational responsibilities, the new standard must provide an accurate picture of the entry-level job market for each school. To do this, any new standard must characterize the jobs graduates obtain beyond “a job is a job.” This includes the nature of the jobs graduates obtain, with whom the graduates are employed, and the locations of these jobs. Gaps in the information also must be clearly visible to limit prospectives from extrapolating from unrepresentative segments of the graduating class.
 
The best way to achieve this is by requiring graduate-level detail, just like NALP has been collecting for years. This allows prospective students to know the challenges they face for achieving their educational and career objectives, which will help them maximize the value of their time spent in law school. The granularity also respects school regionality and encourages schools to develop their placement niches. Whether this niche is in a particular region or city, a field of law, or a sector, this feature publicizes each school’s unique placement ability. Displaying where all graduates go post-graduation can help match students to the right programs, minimizing the effect of national rankings on student decision-making. The choice then becomes less about what a school ranks each year in U.S. News and more about how each school can help a student achieve her goals. If it is clear where a school fits into the legal hiring market, schools will be encouraged to adapt and innovate, and may even be able to reduce costs.

This does not mean that law schools must share how much each individual graduate makes at her first job, as we have done with the LST Standard. Rather, law schools just need to provide enough graduate-level detail to enable prospectives to make a meaningful connection between the post-graduate outcomes for a given school’s graduates and the regional market rates for those jobs.
 

(2) Demonstrate the economic value of a school’s J.D.

 
While disaggregating the current information into graduate-level detail allows for rough estimates of economic value, the ABA does not currently consider salaries to be basic consumer information. It is time for the ABA to recognize the importance of starting salary as basic consumer information. Some prospectives come to law school straight from undergrad with low opportunity costs, and others change careers or work first, but almost all will eventually pay an enormous amount of money for the privilege to earn a J.D. It is difficult to separate the question of “how much will I make?” from “how much will my monthly loan payments be right after I graduate?” Likewise, it is difficult to think about the salary a graduate earns separate from where that graduate lives and works. New salary information must be presented in a way that allows prospective students to understand how graduates begin earning the income they need to juggle loan payments, living expenses, and everything else a new member of the legal profession must pay for.
 
It is clear that a graduate’s starting salary is only a part of the economic value a graduate can derive from the degree, and that many graduates (notably solo practitioners) may see a sharp upward trend in their earning salary over the first five to ten years. However, entry-level salaries are a good place to start, and the least costly time to assemble a comprehensive picture of a graduating class. The Bureau of Labor Statistics provides salary information for lawyers, but lawyers represent only a portion, even if a large one, of law school graduates. The important question is the value of the law degree itself. Between 60% and 70% of all 2009 law school graduates had jobs, as of February 15, 2010, that required a J.D. Of those that did not, some will eventually find work as an attorney. Likewise, some of the graduates who work as lawyers after law school will soon leave the profession. None of this warrants hiding information about post-graduate outcomes. Career trajectories are hard to predict, but they all necessarily include the first job.
 

(3) Operate on an accelerated schedule

 
The data and information reported on the annual questionnaire and on law school websites must be published in a timely manner. The 2009–2010 questionnaire was due October 31, 2010. This included employment information about the class of 2009, which was finalized on February 15, 2010, and will not be published anywhere until after the admissions cycle for the Prospective Class of 2014 has just about concluded. The Class of 2009 information will not appear in the Official Guide until after the Class of 2010 data has been assembled and reported to NALP. The ABA must publish this information sooner, along with other consumer information as it becomes available.

There are no reasons why law schools cannot either submit employment data to the ABA or provide employment information on their websites by the end of March, each year, for the most recent graduating class. According to Jim Leipold, Executive Director of NALP, data straggles into NALP from February 15th through March 15th, but by the end of that period almost every school has reported all of their employment data to NALP. This data is fresh in everyone’s minds and can be readily provided to the consumer at low costs to career services staff.

In the old days, there would be good reason why prospectives needed to wait to see this data, because the submissions to NALP by law schools would be by individual paper forms. Simply put, times have changed. 90% of law schools submit the data in an electronic format, downloaded from whatever system the school uses to survey graduates. And although schools already have the Class of 2010 data accessible, to our knowledge no school has posted any 2010 employment information on their website.

While the problems with the current employment information (see our white paper for more detail) are separate from the terrible job market, the present job market makes the current reporting schedules unquestionably unacceptable. Regardless of whether job placement for a given year was good or bad, prospectives should still be able to see the full picture. But when the available information is so outdated that it differs greatly from current placement trends (as evidenced by the new NLJ 250 statistics), not providing up-to-date information to consumers grossly undermines the obligations law schools have to their students and to the legal profession. This is particularly true when the information has already been collected and can be disclosed to the consumer with relative ease.

These three evaluation criteria were originally communicated to the Questionnaire Committee and Dean David Yellen (Chair of the 509 Subcommittee) at the December 2010 Questionnaire Committee hearing by LST’s Executive Director.

The Current Employment Information Reported to the ABA

This is the first of a series of posts where we contemplate the 509 Subcommittee’s proposal and the facts needed to understand how it would advance transparency at ABA-approved law schools. This post begins this process by describing the current employment information that schools report to the ABA according to Standard 509 and the annual questionnaire. Later we provide three criteria to judge the ABA’s actions and then will evaluate the new proposal with those criteria in mind.
  
Law schools must report “basic consumer information” about their programs to the ABA, including information about the employment outcomes of their graduates. Currently, the ABA requires that schools report employment rates nine months after graduation, as well as basic bar passage statistics. The annual questionnaire requires that schools report these placement rates for the second-most-recent class, roughly 16 months after most of the graduates earned their degree. It takes about 2 years from graduation for the ABA to publish the information for public consumption.
 
These employment rates include the employment status of all graduates, as well as the type of employer, type of job, and geographic location of all employed graduates. For all of these categories, “a job is a job.”

The employment status includes five exhaustive categories: employed, unemployed—seeking, unemployed—not seeking, pursuing an advanced degree, and unknown. Although exhaustive, the total number of graduates in each category inexplicably does not always add up to the total number of graduates. As one of many examples in the most recent Official Guide, New York Law School does not account for eight graduates while reporting according to these exhaustive categories. The ABA disclaims any warranty as to the accuracy of the information submitted by law schools, so it is unlikely that anybody will correct even basic errors.
 
The employer type rate only considers what business the employer engages in, rather than the type of job the graduate works for that employer. Accordingly, the percentage of graduates “employed in law firms” includes lawyers, paralegals, and administrative assistants. Likewise, “employed in business and industry” includes everyone from an in-house lawyer to a short-order cook. The job-type rate aims to shed some light on these logical disconnects.

NALP’s annual reports on the entry-level hiring market indicate that the disconnect is not merely theoretical, as a sizeable percentage of graduates take these non-law jobs at law firms and in business each year. That graduates take these jobs is not necessarily a problem. The problems are that it is unclear to readers that there exists a disconnect and that, once realized, readers cannot determine what types of non-law jobs these graduates take. Perhaps, originally, all that mattered was the bar-passage-required rate versus the not-required rate. But when a school advertises the versatility of a J.D., unassuming consumers are likely to think many of these graduates are doing something with their degree other than becoming a paralegal or short-order cook. The reality is that just about every graduate needs to find some way to earn money because most of them used student loans to pay for their education.

The current ABA employment reporting standard is seriously limited by its form and substance. This standard aggregates employment outcomes and makes it difficult for prospectives to understand the various employment opportunities for new J.D.’s. Quite differently from problems with the standards, schools’ individualized reporting policies often package information in ways that are not only difficult to compare, but oftentimes misleading. While arguably violative of Standard 509, the “fair and accurate manner reflective of actual practice” portion of the standard has yet to be enforced.
 
What follows is that prospective law students rarely make informed decisions about whether, and where, to attend law school. The ability to make an informed decision directly relates to prospective law students’ ability to access quality information, and the available resources are inadequate for prospectives who strive to take a detailed, holistic look at the diverse employment opportunities at different law schools.

Because prospectives usually do not have enough information about employment outcomes to make an informed decision, they often look to other resources to facilitate comparisons among schools. Most famously, U.S. News provides a yearly law school ranking that prospectives often use as a proxy for schools’ job placement opportunities. While the U.S. News ranking drives down transaction costs for prospectives seeking to acquire and explain information, it also causes prospectives to make decisions based on minute, arguably arbitrary rankings disparities. U.S. News’s decision to rank the former-third tier will only exacerbate this problem.
 
These problems have existed for quite some time, and are divorced from schools’ current struggle to help their graduates find gainful employment. That said, the economic climate is creating ever-larger implications for the legal profession. Law school in the U.S. is now an extremely costly proposition in terms of both positive attendance costs and opportunity costs. Tuition continues to rise, debt is not dischargeable in bankruptcy, and the expected value of all outcomes is less than it was just a few years ago. The result is more graduates for whom uninformed decisions will adversely affect their well-being. Caveat emptor may be an attractive quip when consumers choose to buy inherently dangerous goods, but it is not applicable when even the most informed prospectives really have no idea what kind of return follows from investing in a particular J.D.

This post is derived from our white paper. Many of these comments were also presented by LST’s Executive Director at the ABA Questionnaire Committee hearing in December, 2010.

Standard 509 Subcommittee Posts Proposal

The ABA Section of Legal Education’s Standards Review Committee subcommittee, the Standard 509 Subcommittee, has released its revised standard regarding employment data.

The Subcommittee has this to say in the proposal:

Attached is a proposed new Standard 509(b) regarding employment data, and a chart we propose that each law school be required to fill out and post on its website on an annual basis. This new Standard will, if adopted, provide more meaningful and consistent employment information to prospective students. We believe that this information will greatly assist prospective students in making informed decisions about whether to go to law school or which school to attend. Because almost all of the information to be disclosed is already gathered by law schools, the burden on schools will be minimal.

We will soon provide a series of detailed posts analyzing this proposal according to criteria we set forth in a written statement to the Questionnaire Committee back in December.