The departed

The Boston Globe has a story in this morning's edition about John O'Brien, dean of New England Law School.

Some highlights:

*O'Brien's total 2011 compensation of $867,000 appears to be the highest for any law school dean in the country:

Pressed to name a dean who is paid more, Robert Gray, a political consultant hired by the school to help O’Brien answer questions from the Globe, cited only Brooklyn Law School, in New York City, where a dean and a president are paid combined salaries of more than $1 million.

Perhaps Robert Gray has access to information not available to the IRS, but according to Brooklyn Law School's 2011 990 form, its highest paid employee was "Joan G. Wexler, Esq.," who was paid only $658,451 for her service to the institution and its students.

*O'Brien's compensation packaged nearly doubled between 2008 and 2011.   In the former year his base salary was raised by the school's governing board (consisting, needless to say, of long-time friends of John O'Brien, who were paid mid-five figure stipends for their charitable service) from $437,900 to $615,000.

Foster, a Cambridge attorney with an active practice, ­received $74,500 a year for 15 hours of work per week. Board treasurer Darrell L. Outlaw, a retired district court judge, pocketed $42,000. And school corporation president John R. Simpson, a retired director of the US Secret Service who has since stepped down from the president’s post, took home $55,000.

But O'Brien's true compensation was increased vastly more than that, as the board also agreed to give him a $650,000 "forgivable loan," which he wouldn't have to pay back if he stayed at NEL (hence the 2011 total compensation figure).

*NEL's tuition nearly doubled between 2006 and 2012, from $22,475 to $40,984.

*Over roughly the same period (2004-2011) the school's admissions policies were transformed from "somewhat lax" to "constructive open admission," as the proportion of admitted applicants rose from 37.9% to 70%.  During this time the school's total enrollment increased by about 10%.

*O'Brien became dean 25 years ago, only four years after entering legal academia.  (He does not appear to have ever published any academic work of any sort, although I admit my research into this question was less than comprehensive).   The NEL board's claim that it had to make him the highest-paid law school dean in the country in 2008 by effectively doubling his compensation (if he wasn't already, which is unclear) because he was being pursued by other law schools is, shall we say, not terribly plausible, especially given that the board refused to identify any of the schools supposedly pursuing this paragon of administrative achievement.

*The board's other justification for enabling O'Brien's extraordinarily porcine behavior -- that he has greatly improved NEL's reputation during his 25-year tenure --, lacks any factual basis.  The school is unranked by USN, and its graduates have what can be fairly characterized as catastrophic employment prospects.

*The story does not mention that John O'Brien is the immediate past president of the ABA's Section of Legal Education -- that is, he has just departed from running the wing of the ABA which regulates the conduct of ABA accredited law schools.

The scandal

 Updated below

If you want a glimpse into the short-term future of American legal education, take a look at what New England Law did this year with its entering class.  NEL has, even by the standards of low-ranked law schools, atrocious placement statistics: only a little more than a third of the 2011 class got legal jobs (full-time long-term bar admission required; and this figure is bolstered by 15 people who listed themselves as starting solo practices), one in five graduates was completely unemployed, only four graduates out of 308 got jobs with law firms of more than 50 attorneys, and the median reported salary for the class was around $50,000, even though less than 25% of the class had a reported salary (Given these stats, it's likely the true median salary for 2011 graduates of NEL was under $30,000.) 

NEL has raised its tuition faster than almost any other private law school in the country, nearly doubling it since 2004, from $22,475 to $42,490 (these figures don't include health insurance, which will run students close to another $2,000 if they purchase it from the school, and which they're required to have under state law).  The 2011 class had a mean reported law school debt of $120,480, but keep in mind this figure doesn't include accrued interest, private non-government guaranteed loans, and other educational debt. Taking these factors into account, the average 2011 graduate almost certainly had at least $150,000 in educational debt, and quite possibly as much as $175,000.

The large majority of NEL grads aren't getting legal jobs, and almost everyone who does get a legal job isn't getting one that justifies the cost of attending the school.  So what did this institution decide to do this year, given these extraordinarily dire statistics?  If you guessed "raise tuition more than twice as fast as inflation and increase the size of the incoming class by 17%" you win a prize.  NEL increased its incoming class from 385 to 452 students. It achieved this, while applications to law school in general were plummeting, by dropping the median LSAT score of full-time matriculants from the 53rd percentile to the 41st percentile, and that of part-time students from the 41st percentile to the 33rd (fully a quarter of the part-time admits had LSAT scores below the 26th percentile of test takers).

But we haven't even gotten to the punch line yet, which is that the dean of this monument to catastrophic market failure  is John O'Brien, who was none other than the chair of the ABA Section of Legal Education and Admissions to the Bar during the 2011-12 academic year -- that is, the section of the ABA that is supposed to be regulating the conduct of accredited law schools.  (O'Brien was paid $867,000 by NEL in 2010-2011).

What we have here, in other words, is the academic equivalent of what in the world of finance is known as a pump and dump operation.  With an eye for the main chance that would make the likes of Whitey Bulger proud, O'Brien, who has been dean of NEL for 24 years, seems to have decided that he might as well get while the getting is good. With unlimited federal loan money there for the taking, NEL continues to jack up tuition as fast as it can, while tossing any semblance of admissions standards out the window, and not even pretending to care whether graduates are taking on life-wrecking amounts of debt in return for degrees that will rarely produce returns that justify their cost, and which indeed in many cases are going to be worse than worthless.

And while it's true that if something can't go on forever, it will stop, there's still at the moment nothing to stop people like O'Brien from running educational boiler rooms. Yes the whole thing is starting to crash, but in the meantime there's still money to be made, and lots of it.  (My guess is that, as fiscal reality slowly sets in, a lot more law schools will stop trying to hold their LSAT medians, and instead admit whoever they have to admit to keep classes from shrinking even further.)

As Michael Kinsley once observed, the scandal isn't what's illegal -- the scandal is what's legal.

Update:  Nice catch by commenter MacK on the "special board" appointed to make sure that O'Brien's astronomical compensation is warranted (I guess it's a positive that somebody felt it necessary to produce some bureaucratic justification for paying O'Brien what is probably three times the average dean's salary at an unranked school).

The only actual achievement cited by the review board is that, like a lot of bottom feeding schools, NEL has been turned into an apparently effective three-year bar review course.

NEL makes a very big deal of the fact that it spends lots of student tuition on paying SCOTUS justices to give little talks and such. There is to put it mildly zero evidence that this has produced any "elevated prestige" for the school.

As for "financial stability," until about 15 minutes ago running a crap law school was a license to print money, and it would have taken an extraordinarily incompetent dean to fail to achieve "financial stability."

The best part of this is citing heading the ABA Section of Legal Education as evidence that this guy is "strengthening the field" (the field, remember, being the practice of law) overall.  Just imagine how bad employment stats for lawyers would have become if John O'Brien hadn't been strengthening the field by running the Section of Legal Education.

Man paid $867,000 to run fourth-tier law school says law school is a good investment

Not An Onion Story:

But others view [Brian Tamanaha's Failing Law Schools] as just the latest overly dire prediction about the fate of law graduates and misplaced finger-pointing over tuition costs.

"Most people in the profession were already concerned about what it costs to get a law degree," said John O'Brien, dean of the New England School of Law and chairman of the ABA's Council of the Section of Legal Education and Admissions to the Bar. "Nobody feels good that tuitions have gone up. But the claim that a law degree is a bad investment doesn't hold water."

O'Brien currently heads the ABA's Council of the Section of Legal Education, whose regulatory mission is to decide whether it's a good idea for John O'Brien to get paid nearly $800,000 per year  $867,000 per year to run a law school with these outcomes for its graduates.  (Just found the 2011 IRS Form 990 for NESL. I apologize to Dean O'Brien for seriously understating what he earned last year for his charitable endeavors).

Character and fitness

If anybody cares, the ABA announced Thursday that so far 13 schools have submitted corrections to their reports of the average level of total law school loans taken out by 2011 graduates (incorrectly referred to by the ABA, US News, and media sources as average debt data -- average graduate law school debt is actually 11% to 15% higher, since schools don't report interest accrued on loans), although according to a spokesman "some" of these corrections are "minor."

Some of the non-minor ones include:

Rutgers-Camden

Reported average loans: $27,423

Actual:  $80,446

Barry

Reported average loans: $41,190

Actual loans: $137,680

Kansas

Reported average loans: $41,574

Actual loans:  $67,598

It will be interesting to see what the final law school loan totals look like if and when US News gets around to updating its website (the ABA doesn't publish this data, but its estimate that public law school grads took out loan averages of $75K obviously needs to be revised upwards).

Other schools whose average graduate law school loan totals almost certainly are going to end up being multiplied by roughly three: Georgia State, Southern, Texas Southern, and one I haven't mentioned before, Drexel. 

When first covering this story I rather negligently ignored Drexel's extraordinarily low reported 2011 average graduate loan total of $33,562 because I had a vague memory that the school's first few classes got very big scholarships (the school opened in 2006).  But then I checked the numbers and, after accounting for tuition discounts, the 2011 class still paid an average of nearly $20,000 per year in tuition. Plus the school estimates the nine-month cost of attendance as more than $23,000 per year.  Given that the real cost of attendance at Temple is the same, and that Temple reported an average law school loan total of nearly $81,000 for its 2011 class, Drexel's real numbers are no doubt similar.

Rutgers-Camden and Drexel have done the same thing for at least three straight years, but the ABA (which actually means John O'Brien, et. al.) has already said it's going to take no action against any of these schools, since "sanctions are reserved for schools that make 'persistent and substantial misrepresentations,'" and apparently reporting egregiously fake data to the ABA for at least three straight years doesn't count.

BTW for all you law students and applicants out there, don't think for a moment this means you can "forget" to mention that minor in possession citation you got three years ago. You can be sure your character and what it reveals about your fitness for bar membership will continue to receive the most scrupulous attention from John O'Brien et. al.

Law School Transparency's push for adoption of a revised Standard 509

The ABA's Council of the Section of Legal Education is meeting today in an open session at the Westin Beach Resort and Spa in Fort Lauderdale.  The key item on the agenda is a revision of Standard 509 -- the ABA's consumer information standard.

Law School Transparency has submitted a memo regarding the proposed revision, which apparently the Council will consider.  The memo is mostly devoted to advocating for various technical changes in the proposal, but ends with a general statement that, at this point, I hope few people in legal academia would be willing to disagree with (at least openly):

(5) Regulatory Barriers to More Efficient Law Schools
It has become apparent that legal education has gotten away from legal educators. There are almost 200 schools vying to be Harvard-like think tanks. The vast majority of these schools set tuition prices in a distorted market, with rates loosely based on a school’s U.S. News ranking and geographic location. This pricing model, which relies on student loans and dwindling credibility, will not survive. The Council should acknowledge this reality and ensure that the ABA standards do not stand in the way of schools needing to substantially change how they deliver a quality legal education.

At some point, as more and more graduates question their own ability to practice law upon graduation and more clients refuse to pay for their services, we must do more than idly theorize on changes to the current model. We believe the Council’s first step should be to conduct an inquiry into how the accreditation standards (a) functionally prevent low-cost alternatives and (b) could be adapted to allow other models to emerge. For too long, cost considerations have been absent from reform discussions. The Council should seize the chance to better legal education for the sake of the profession and society at-large.

In November, we asked that Jeffrey Lewis, dean emeritus and professor of law at Saint Louis University School of Law, create a special subcommittee to review regulatory barriers preventing law schools from adapting low-cost models. To date, plans for such a committee have not been announced. It is critical that the Council ask Dean Lewis to create this committee today, and that the Council urges the new committee to act quickly and thoroughly. If the answers do not come quickly from legal educators, the result will be that educators end up forfeiting their right to control the changes. And if the answers have to come from elsewhere, unbreaking the broken law school model will be as painful as it is necessary.

The last sentence in the quote alludes to the fact that, behind the scenes, a couple of U.S. Senate committees remain keenly interested in what the ABA is or isn't doing to reform a broken system.  The Council has been made well aware of this fact -- a fact which has quite direct relevance to the Council's sudden new-found interest in improved law school transparency.

Speaking of which, the current chairman of the Council, New England School of Law Dean John O'Brien, received a salary of $737,482, plus $44,238 in other compensation in 2010, per IRS tax form 990.  I doubt Dean O'Brien shares LST's views on the extent to which this system is broken, but it's becoming increasingly clear that the opinions of persons such as himself are not going to decide these matters for much longer.