Thursday, March 22, 2012

The myth of the sophisticated law student

Here's the key passage in Judge Melvin Schweitzer's decision, granting New York Law School's motion to the dismiss the class action suit brought against it by nine graduates for publishing misleading employment and salary data:

The court does not view these post-graduate employment statistics to be misleading in a material way for a reasonable consumer acting reasonably. By anyone's definition, reasonable consumers -- college graduates -- seriously considering law schools are a sophisticated subset of education consumers, capable of sifting through data and weighing alternatives before making a decision regarding their post-college options, such as applying for professional school. These reasonable consumers have available to them any number of sources of information to review when making their decisions.
The statistics to which the court refers are overall employment rates, nine months after graduation, hovering around 90% for the NYLS classes of 2005-2010, and salary statistics which, for the classes of 2005 and 2006, didn't disclose the percentage of graduates reporting salaries, but included the purportedly limiting caveat "based upon salaries reported."  Although the school did start disclosing what percentage of graduates the salary statistics were based on beginning with the class of 2007 (that is, in materials published no earlier than the spring of 2008), it's important to note that eight of the nine plaintiffs enrolled in NYLS prior to 2008, that is, prior to NYLS' disclosure of this obviously crucial piece of information.

Judge Schweitzer's argument, in a nutshell, is that:

(a) Potential law students are sophisticated consumers of education.

(b) NYLS didn't affirmatively represent that the nine-month graduate employment rate included only legal employment.

(c) NYLS didn't affirmatively represent that the average salary statistics it published were statistically representative.

(d) Because potential law students are sophisticated consumers, and have various sources of information available to them other than the representations made to them by law schools regarding the schools' employment and salary data, they know or should know that employment and salary statistics such as those presented by NYLS would be misleading if taken at face value.

(e) Therefore, potential law students who take such statistics at face value are being unreasonable, and, since New York consumer protection law protects only reasonable consumers, it doesn't protect the plaintiffs in this instance.

It's hardly an exaggeration to say the judge accepted a "it's your fault if you took us at our word" defense on the part of NYLS.  The judge seems to have taken the view that, as long as a law school doesn't literally lie, factually true statements that might well be expected to mislead an "ordinary" reasonable consumer -- and would therefore constitute actionable conduct -- should not mislead a "sophisticated" consumer, and should therefore not give rise to legal liability. In other words, the judge appears to be holding potential law students to a higher standard than ordinary consumers, because they are college graduates, and therefore "capable of sifting through data and weighing alternatives" in a way that at least impliedly grants them less protection under consumer protection laws than would be given to less educated people.

It goes without saying that, in the usual manner of such things, the judge provides no evidence for the assertion that potential law students are (or should be?) less prone to getting ripped off by slick salespeople than their less educated brethren.  It's simply asserted as self-evident that this is the case, which one would think would raise the question of how exactly law schools manage to enroll tens of thousands of obviously "unreasonable" consumers of professional education every year, given the wonders of our information age. (It also goes without saying that this question remains unraised).

The judge is essentially taking the perspective of this commenter:

[Law schools] expected [students] to understand the "contract" involved in law school admission and matriculation. How?

They expected you to read all the info, not just from their schools, and ask questions--especially when you noticed discrepancies or didn't understand or weren't sure about something you read or heard.

They expected you to talk to lawyers practicing the kind of law you want to practice--and not just alumni of the schools you were considering, to learn their perspective on the politics of hiring and promotions, what the day-to-day work is like (does it match your expectations? how hard is it to work 70-80 hours a week, really?), and what they see as the future of the field.

They expected you to take an active part in your career development, to make a point of doing well in interviews, to conduct a comprehensive job search (not refuse to interview with any firm outside of BigLaw).

So it comes back to greed--and the willful blindness it inspires in prospective law school students.
I characterized this position as "if you had been thinking like a lawyer, you would have known lawyers would lie to you," which non-plussed the commenter, who replied in high dudgeon (what does that mean anyway?):

No, you are wrong. If prospective law students would simply adhere to the old warning "buyer beware" -- and not be blinded by their need to believe they are smarter and more special than everyone else, and therefore are guaranteed first-job placement success at a BigLaw firm -- they would do a thorough job investigating their options for law school. The result of these investigation might lead them to determine that they should not go to law school at all, and instead pursue a different career. (I'm starting to think this may be true for you, too, as you seem to be a frustrated academic.)

Your cynicism is sickening. Lying is not the default communication mode for lawyers or law school administrators. 
I have no real idea of the extent to which lying is the default communication mode for lawyers -- like almost all legal academics I know very little about lawyers -- but I do know a lot about law school administrators, and in fact when it comes to the issues discussed in this blog, lying is the default communication mode for a very large number of such people.  In any case, a soon-to-be unemployed Columbia law student's response gets to the point, although with less delicacy and circumspection than is considered proper among the Quality:

Are you aware that [prospective law students] actually, mentally CANNOT do this? It's not a matter of being smart. The optimism bias is hardwired into our DNA. The rational actor model has been thoroughly discredited. Pick up a fucking newspaper.
Yes, precisely. Judge Schweitzer is living in the comfortable fantasy world of "rational actors," where reasonable people decide on reasonable courses of action in a reasonably reasonable way. Out in the real world, "the market" for places in law school consists in large part of inexperienced, unworldly, non-cynical, irrepressibly optimistic young people who have been socialized successfully to believe that law school personnel operate by a more exalted code than that found among carnival barkers and used car salesmen. In other words, people who have not yet learned to "think like a lawyer," i.e., a cynical pessimist who takes it for granted that

(a) In an "arms-length" transaction somebody is going to try to rip you off at least up to the very limits of the law, if not well beyond it; and

(b) Everything is an arms-length transaction.

Their bad, as Judge Schweitzer might as well have said. They should have learned to think like lawyers before they went to law school.

216 comments:

  1. To the person who keeps suggesting that NYLS made it clear that their "average", "median", "25th percentile" and "75th percentile" salaries were meant to describe a small unrepresentative sample, and not the population ---

    What you don't seem to be able to understand is that terms like average, median, 25th percentile et. al. as used in their standard meaning are never describing biased samples, they are describing populations from which the sample was unbiasedly selected.

    There is no value in knowing the average, median, 25th percentile or 75th percentile of a biased sample. Why would anyone care to know that information about a group that they know does not tell them ANYTHING about the population they seek to study? In general, why would anyone care to gain knowledge of a tiny subset of information that they know does not represent the question they're exploring? This is as much fraud and dishonesty as there ever was. I can articulate to you how most lies are nothing more than the person selecting a biased set of information and presenting it as the answer to a question.

    If you ask an investor how he did last year and he responds, "30% annual returns [asterix, based on 10% of my investments]" (when he really earned 4% overall), that's a lie. When you ask an applicant about his GPA and he says, "4.0 [asterix, based on 5 classes]" when it's really a 3.2, then that's a lie. When you ask a used car dealer about the car's mileage and he says, "80mpg [asterix, under some driving conditions]" when it's really 20mpg (except when in neutral going down a hill), then that's a lie.

    I can give you a million other example where such attempts would be laughable fraud. Which begs the question as to why Judge Schweitzer decided that law applicants should be the only group on the world not protected from such fraud.

    Judge Schweitzer, in my opinion, should not be on the bench after writing an opinion like that.

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  2. @6:57

    I really wonder why you don't have a job. You seem so normal and all.

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  3. DJM-- you and I disagree because you are focused on what you take to be the mindset of people who reported the information (and you are certain you know it) and I am thinking of what it takes to make out the claims in the case. Fraud is not just about an act. It requires showing material misrepresentation that is reasonably relied upon. The plaintiffs said that presenting salary information based on 20% of reports was designed to tell prospective students that they were going to make high salaries, that this number was meant to be representative of the class. I do not believe that a report based on 20% of a class can be reasonably taken as representative of the class. In the years when they did not report percentages, but said that the reports were just based on the reports they received, they gave a range of salaries --one year 35k to 128k --and then said that the high salary was not representative of the starting salaries of most lawyers in the City and in the country. I do not see evidence of telling people that high salaries were representative or that this information told the story of the whole class.

    And if you do not think NYLS was in compliance with the ABA rules, you are in disagreement with the plaintiffs. The complaint says that NYLS was in compliance. They filed an amended complaint to try to say the opposite, but did not cure the complaint of the arguments based on NYLS's compliance with ABA standards. 

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  4. @7:39 that is why it is good that the proposal to have the ABA require schools to publish salary information was rejected. Unless a large number of people report, it is of no help. Being of no help is not the same thing as being fraudulent.

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  5. can schweitzer be recalled/impeached?

    btw, prof campos, great blog.

    you have this scamblogging movement on your back now.

    ---unperson, owner of 'exposing the law school scam'

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  6. 8:16, according to the opinion, the plaintiffs pled a violation of NY's consumer protection law, which requires only that the defendant's conduct was consumer oriented, that the conduct was deceptive or misleading in a material way, and that the plaintiff suffered injury. According to the court's initial exposition of the law (p. 7), the statute does not require the plaintiff's reliance or the defendant's intent to deceive or mislead. I don't have any independent knowledge of NY law--I'm just going by what the judge said.

    In terms of the actual way in which employment statistics are collected, it is quite clear that schools are allowed to fill in information when graduates don't report it directly: You could check with NALP or your career services office about this. Perhaps NYLS doesn't fill in information that is heard second hand or found on the internet, but that would be quite surprising. This is standard practice, sanctioned by NALP, and it's not considered cheating for purposes of the NALP process. Schools want to get information about the highest possible number of grads, in order to keep that number high in US News, and there's nothing in US News, NALP, or any other guidelines that says the grads have to self report that information. It's not a courtroom, so even hearsay is allowed!

    The problem comes when schools report the biased salary information by percentiles and averages, without disclosing the biased way in which the data are gathered. These salaries are *not* all self reported. Self reports generate one type of bias; one could argue about whether the disclosure of "self reports from 20% of the graduates" gives enough information to inform the buyer of the potential bias. But some of these salaries are based on secondhand reports, internet searches, and publicly available salaries. Those are not self reported, and that creates a whole different type of bias that the schools aren't disclosing.

    Law schools have been very aggressive during the last fifteen years in selling themselves and in presenting statistics (for US News and other purposes) that really push the lines of technical accuracy. At the end of the day, I think schools should be held at least to the ABA standard of "fair and accurate," which is different from "technically accurate." Given the defendant's status as an educational institution, I think the applicants would expect the school to speak in a "fair and accurate" way.

    That may be the nub of our disagreement: I believe that the reasonable consumer standard looks both at who the consumer is and who the seller is. I.e., consumers interpret information in light of who is making the representation. I don't know whether NY law recognizes that point--it's an interesting question and, if I have time, I'll check into it. But as an academic, I criticize opinions not just in terms of existing law but in terms of what the law should be. I think a reasonable consumer standard definitely should look at the full context--including the nature and reputation of the seller.

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  7. Another DJM smackdown. Why do you trolls bother? Good luck with your article, she'll rip that apart too.

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  8. There is one simple answer to Judge Schweitzer's conclusion that law students were too sophisticated to be fooled by the law schools dissembling on employment statistics and salaries - why? Why if law students were too smart to fall for the games did law schools dissemble? What was the point of spending huge amounts of money to hire on fellowships recent graduates at the 8-9 month mark - why not be upfront and honest about the statistics.

    Willie Sutton famously answered the question - why do you rob banks with "because that's where the money is," i.e., he would not have gone to the effort to say rob manure piles. Law schools have lied because there is a benefit in their dishonesty - and the only conceivable benefit is tuition money.

    MacK

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  9. DJM take a look pages 25-29 for the discussion of the elements of fraud, the discussion of material misrepresentation, and the failure of the plaintiffs' reliance claims. "Reliance must be reasonable" the courts says at page 28. The suit had three bases.
    In any event, we will have a second chance for an answer to this in a little over a year. They said they will appeal, if they decide to go ahead and perfect their appeal, it will take about that long if things go as usual. I have recommendations to write. But this has been fun. I always enjoy your comments and passion for this cause.

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  10. "the court says"-- so many typos!

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  11. THe problem I keep having with those defending the judge is that they pretend the judge could act as if reasonable was a tableau rasa question. If you look at NY Law, his opinion makes little sense.

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  12. Judge Schweitzer is probably a constipated old man who likes seeing young people suffer under debt and unemployment.

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  13. I was a law prof for seven years, and I assure you, law students are not sophisticated. If you get outside of Tier 1, many of the students do not even know where their school is ranked in U.S. News. If they do, they do not realize how much that influences the hiring market or how much their income will be affected. Lawyers responsible for hiring law students KNOW where the school is ranked in U.S. News.

    Law students' lack of sophistication is not just evidenced by lack of knowledge about law school rankings. My experience was that fewer of them had held jobs prior to law school than my law school classmates, and thus were less real-worldly than I expected. Their social sophistication is far higher than law students in my day, but their practical and task-based sophistication is surprisingly poor. Part of this may be the trickle-down effect of undergraduate schools busting at the seams, so that students are more often educated by video or online, and then tested in the completely non-reality-based multiple choice format.

    I think the judge's reasoning regarding sophistication (at least in the context of understanding the financial implications of law school) might be more true in 5 years because of blogs like this and high profile articles elsewhere on the Web. However, the "real truth" has only begun to emerge in the last couple of years.

    We see this often with judges, though, don't we? Most judges have a little age on them, since most judges need experience to be appointed or elected. Judges are like everyone else...they judge based on experience. This explains, for example, judicial difficulties in applying intellectual property protections to new technologies (although the statutory schemes have something to do with this too).

    If my law school classmates were more sophisticated than today's students, I imagine the next older generation's law school classmates were at least that sophisticated. It doesn't put me, or a judge, in a very good position to determine the general sophistication level of 22-year-olds, does it?

    Or maybe I am even exaggerating the sophistication of my classmates. Perhaps I view them that way because of what they have become, rather than what they were. It seems equally likely, since while I viewed my classmates as sophisticated, I surely could not have counted myself among them.

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  14. Hey, aren't lawyers supposed to only care about justice? Just like doctors only care about your health? Just kidding. Bad joke.

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