Tuesday, July 31, 2012

Baby boom

I have a piece in Salon about the new generation gap, with several references to the law school scam.

Original contributions to the literature

Here's a small but telling example of one of the many things that are wrong with legal education:  Last week I wrote about how an actual majority of high-ranked law schools were accepting applications months after their formal deadlines, and just weeks before the start of the fall semester. I also noted that several elite and sub-elite schools were giving applicants conflicting information on this point, depending on whether the applicant revealed he possessed desirable admission numbers.

I suggested this indicated a certain degree of, if not outright desperation, at least striking eagerness on the part of some top schools to find ways to fill their incoming classes, and that it wouldn't be difficult for schools to avoid the appearance or the actual commission of impropriety in regard to these matters by simply indicating that their admissions deadlines were not really deadlines at all, but flexible standards (i.e., making clear that applicants who wanted a guarantee of having their applications at least formally considered had to meet the application deadline, but later applicants might be considered depending on circumstances).

Davison Douglas, dean at William & Mary, e-mailed me about this topic, and sent a similar e-mail to Taxprof, which Taxprof published with Douglas's permission:

I read your blog today citing the Campos blogpost about law schools still seeking applications.
From where I sit, this story is completely overblown.
 Here at William and Mary Law School, we’ve had the following statement on our website for years (we never take it down):
  “March 1: Application deadline. Applications received after the deadline will be reviewed, but your chances of being offered admission may be significantly decreased.”
 Many schools have similar language.
 Do we typically receive a few applications after March 1? Yes, a handful. Do those applicants gain admission? Occasionally. An example might be the spouse of an active duty member of the military who gets transferred to one of our nearby military bases in late spring. The spouse, who was set to attend another law school, applies late to our law school so that he won’t have to live apart from his wife. The person is a strong candidate and we accept him.
 Do we actively seek out applicants after our March 1 deadline? No.
 Are we still trying to attract applicants here at William and Mary for the incoming class of 1Ls?
 No. Our class is set.
 What Campos missed is that the willingness of law schools to accept applications after the stated deadline is pretty standard. It says nothing about a law school’s actual enrollment needs. My guess is that he never noticed that language on law school websites before.
I asked Douglas how many schools have similar language on their websites, as I had looked at a bunch of formal deadlines while writing the original post and hadn't noticed such language anywhere.  He didn't reply, which makes me suspect he has no idea, and that it's quite possible that William & Mary is one of very few schools (or indeed possibly the only school) that has a public policy of this kind.

"Many" legal academics have a bad habit of talking about things they don't really know anything about as if they do. With the help of a couple of readers I put a certain amount of work into determining exactly how many top 50 schools were, as of July 24, 2012, accepting applications for their 2012 classes. The answer wasn't "many:" it was 28.

Monday, July 30, 2012


On Campus Interviewing (also known as "OCI") kicks off at law schools during the next few weeks.  Rising 2Ls are wondering about their OCI chances; some have suggested that they may withdraw from law school if they don't fare well at OCI.  What are their prospects? What percentage of law students actually land jobs through OCI?

The numbers probably are grimmer than you imagine.  Nationally, only 12.7% of 2011 graduates report that they obtained post-JD jobs through a fall OCI program.  That percentage includes grads who obtained jobs during their 2L OCI (parlaying a summer job into a permanent offer) and those who landed a job through OCI in their final year.

Now, some graduates undoubtedly turned down OCI offers to pursue other opportunities.  Judicial law clerks, for example, don't get their jobs through OCI.  When they reported jobs nine months after graduation, they reported the mechanisms for obtaining their clerkships--not the ways in which they obtained other offers.  Those clerks may have OCI-based offers on hold while they finish their clerkships.  In that sense, the NALP percentage of "jobs obtained through OCI" underestimates the full pay-off from fall OCI.

But in another way, the NALP figure greatly overstates the percentage of students who obtain jobs through OCI. NALP calculates the 12.7% figure from a pool that includes only employed graduates who report the source of their job.  Thousands of 2011 grads had no job at all nine months after graduation.  They certainly didn't benefit from OCI, but the 12.7% figure ignores their fate.  Nor do we know the job-hunting paths of employed graduates who didn't tell their schools how they found those jobs.  Chances are that less than 12.7% of them obtained their jobs through OCI: The Career Services Office tends to hear about (and report) the jobs that stem from OCI.

Taking these factors into account, OCI might have netted jobs for as few as 7.6% of the class of 2011.  (That's 3,375 graduates who reported obtaining jobs through OCI divided by 44,495 total graduates.)  A more generous estimate would be 10.9%.  That figure multiplies the percentage of graduates who were employed (85.7%) by the percentage of the employed who reported obtaining a job through OCI (12.7%).

How does that figure compare to earlier years?  For those comparisons, we have to go back to the 12.7% reported by NALP for the class of 2011.  That percentage is half the rates reported from 2002 through 2009.  In those years, the percentage of grads obtaining jobs through OCI ranged from 22.6% to 25.3%.  Between 2009 and 2011, the percentage plunged from 23.4% (in 2009) to 16.9% (in 2010) to 12.7% in 2011.  Like every other employment statistic, OCI rates cratered after 2009.  Only half as many students find jobs through OCI today as they did before the recession.

On the other hand, these OCI figures remind us that law school has never provided the magic carpet to employment that many 0Ls imagine.  Even before 2009, no more than a quarter of law students lined up jobs through OCI.  At least three quarters networked, sent out resumes, and pounded the pavement.  Today, almost ninety percent of law students will rely on those techniques--and a significant percentage of them won't find jobs at all.

But enough about averages:  What about your personal chances of finding a job through OCI?  Most law schools don't feature the "job source" percentages on their career services website, but you can get those figures.  Ask any member of your school's Career Services Office what percentages of 2011 grads (a) obtained jobs and (b) reported landing those jobs through OCI.  Multiply those two percentages to estimate the percentage of your classmates who will find post-JD jobs through OCI.

Don't assume that your school's OCI prospects are rosier than the national average, just because your school is in Tier One or Two. Students at the very top schools snap up more than their share of OCI jobs, leaving less for everyone else. Here are some percentages I calculated from 2011 NALP forms available on the web (and kudos to these schools for posting their full forms):
  • Boston College: 26.1% got jobs through fall OCI (89.8% employed x 29.1% OCI)
  • Indiana-Bloomington: 9.8% got jobs through fall OCI (90.7% employed x 10.8% OCI)
  • Michigan State: 9.9% got jobs through fall OCI (89.6% employed x 11.1% OCI)
  • New York Law School: 2.0% got jobs through fall OCI (81.3% employed x 2.5% OCI)
  • Seton Hall:  6.0% got jobs through fall OCI (90.3% employed x 6.7% OCI
  • University of Akron: 1.7% got jobs through fall OCI (90.5% employed x 1.9% OCI) 
  • USC: 23.4% got jobs through fall OCI (82.4% employed x 28.4% OCI)
  • Washington & Lee: 4.8% got jobs through fall OCI (89.7% employed x 5.4% OCI)
The good news is that you shouldn't feel bad if you don't land a job through OCI--most of your classmates won't get one either.  The bad news is that you will have to work very hard to find a law job: Despite what your parents think (and what the law schools claim), employers aren't flocking to law schools.  The bottom line for everyone is:  Don't go to law school (or sign up for another semester) unless (a) you really want a legal job; (b) you're willing to work very hard to find that job; (c) you'll be satisfied with the kind of jobs available outside OCI (i.e., jobs other than BigLaw); and (d) you're willing to spend the rest of your life writing sentences like this.

A tower room at Eden Roc

The new ABA/LSAC Guide to prospective students is out, and it's chock full of fascinating tidbits of information. (The data listed for each school is for the 2011-12 academic year).  

Today I'm going to focus on what the guide reveals regarding advertised versus real tuition.  The guide lists not only the sticker price tuition for each school, but also the percentage of JD students receiving grants, and the median size of those grants.  Although the listing of the mean tuition discount would allow the real tuition students are paying to be calculated precisely, a median is close enough for government work.

For example, suppose the Versatile Degree law school charges $45,000 in nominal tuition, but gives 50% of its students grants, with the median size of those grants being $10,000.  This means we can estimate that the real average tuition at VD is $40,000 (half the students are paying $45K, while the other half are paying an average -- roughly -- of $35K).

Let's see what this information reveals about law schools in the New York City area. There's a passle of them, and with the exception of CUNY they all charge fairly similar nominal tuition.  But the differences in real tuition are striking.  (All the figures below are  for full-time JD students. Almost all NYC law schools have part-time programs. Far fewer part-time students get grant money compared to full-time students).

Consider Brooklyn, Cardozo, Fordham, and NYLS.  These four schools charged almost exactly the same nominal tuition last year, ranging from $47,800, to $48,441.

Here's what the real average estimated tuition was at these schools:

Fordham:  $44,150

NYLS:  $43,596

Cardozo:  $33.020

Brooklyn:  $27,725

Fordham thinks well enough of itself that it offers very little in the way of "scholarships," and actually ends up costing more for its students than NYU (which charged more than $50K in nominal tuition last year, but discounted that by approximately 14% via grants, to $43,290).

Meanwhile Brooklyn and Cardozo engage in massive discounting off sticker. Brooklyn gives 81.4% of its full-time students grants,  with the median grant being $25,432. (The comparable numbers for Cardozo are 59.6% and $25,000).

As for NYLS what can one say?  It's an enormous school -- 1765 JD students last year -- with horrible employment statistics, which in real terms is charging its students more than what NYU students pay for a law degree.  A law degree from NYLS costs the average student currently attending around $210,000 in direct costs alone -- a figure that will swell to nearly $250,000 if it's debt financed. 

Here are the numbers for all NYC area schools:

Advertised tuition: $48,441
Real average tuition:   $27,725
Average discount on sticker:  42.8%

Advertised tuition:  $48,370
Real average tuition:  $33,020
Average discount on sticker: 31.7%

Advertised tuition: $52,902
Real tuition:   $46,500
Average discount on sticker:  12.1%

Advertised tuition:  $12,207/$19,157
Real tuition:  $11,983/$18,931
Average discount on sticker:  1.8%

Advertised tuition: $47,986
Real tuition:  $44,150
Average discount on sticker: 8%

Advertised tuition:  $45,600
Real tuition:   $35,002
Average discount:  23.2%

Advertised tuition: $50,336
Real tuition: $43,290
Average discount: 14%

Advertised tuition:  $47,800
Real average tuition:  $43,596
Average discount: 8.8%

Advertised tuition:  $40,978
Real tuition:   $31,370
Average discount: 23.4%

St. John’s 
Advertised tuition: $46,450
Real tuition:   $32,350
Average discount:  30.4%

Advertised tuition: $41,890
Real tuition:  $37,330
Average discount: 10.9%

Of course all these numbers combine the tuition discounts offered to three different classes.  It will be interesting to find out what the entering 1L classes at these schools pay this year. For example I would expect that the real tuition paid by Brooklyn and Cardozo 1Ls this year will be quite a bit less than half of advertised sticker.   NYLS and Touro -- at least -- simply need to go out of business immediately if not sooner.

There's much more to be dug out of the Guide, and I hope some readers will take the initiative to turn up some nuggets of their own.

Friday, July 27, 2012

By the time I get to Phoenix

I was talking yesterday with someone who is deeply involved in the law school reform movement, and who knows a lot of law school deans.  He suggested to me that it's quite possible that until this March Rayman Solomon had no idea what the average law school debt load was of the students graduating from the law school of which he's been dean for the past 14 years. So I may have been unfair to Solomon when I accused him of lying about those numbers to the ABA and US News.

Now I still believe this is extremely unlikely -- another key figure in the reform movement let me know he agrees that it's almost inconceivable Solomon didn't realize the numbers were wrong when he commented on the US News and National Law Journal stories praising Rutgers-Camden for being a great value proposition -- but on reflection I have to admit it's not impossible that Solomon is telling the truth.  I even have to admit that it's possible he wasn't lying in his email to Rutgers students earlier this week, when he said US News didn't publish graduate debt numbers until this year, even though he commented in the media on US News's analysis of those numbers last year.

In other words, the mistake I may be making is to assume that while somebody who has been dean of a law school for 14 years may have become something of a sociopath, he surely isn't an utterly incompetent clown.  But again on reflection, this may be wrong. Maybe Solomon is just a complete joke of a person. What else would you call somebody who has been running a law school for more than a decade and yet has literally no idea whatsoever what it costs the school's students to attend the school?

That, after all, is Dean Solomon's only defense.  I suppose even something as preposterous as the blatant contradictions between the assertions in his email and his comments to the media last year can be explained in these terms: He's a "busy man," who just signs off on things like university press releases and law school ABA disclosure statements put together by others, without really reading them, or knowing or caring what they say.

This is possible. But at some point, professional incompetence reaches a point where it's not only functionally but also morally indistinguishable from conscious dishonesty.  Again, Solomon's defense is that he's the kind of person who, after being informed that the school he runs has been reporting wildly inaccurate numbers to the ABA for at least the last four years, writes an explanatory e-mail to hundreds of people that still gets the basic facts of the situation completely wrong (Or maybe a staffer wrote it. For Solomon is a busy man).

In other words, in legal academia we're constantly dealing with things that preclude assuming both good faith and minimal professional competence on the part of the relevant actors. If you assume good faith, you have to also assume utter incompetence, while if you assume the person actually knows what he's doing, you have to conclude he's on the grift.  People like Solomon -- and there are apparently quite a few in this business -- might be both crooks and clowns, but at a minimum they have to be one or the other.

Speaking of which, let's take a quick look at what's going on at the Phoenix School of Law.  Phoenix (not affiliated with the University of Phoenix by the way) is a for-profit outfit run by the Job Creators at the private equity firm Sterling Partners, who also own Charlotte and Florida Coastal.  The school's website claims that it "places 97% of its graduates into jobs within nine months of graduation."

That sounds pretty good, but how much is it going to cost?  This page on the website reports  that "the median cumulative program debt for PhoenixLaw graduates between July 1, 2010, and June 30, 2011" included $153,489.50 in federal student loan debt, and $35,000 in private student loan debt. This means the median (not the mean) loan debt for Phoenix graduates for the class of 2011 was $188,489.50.  This astonishing figure is 30% higher than the figure reported by the school to US News in the fall of 2011. I called up Phoenix's director of financial aid, who assured me the figure on the school's web site was correct, and that she would look into how a much lower figure ended up getting reported to US News.

Note that the language on the website is phrased carefully to describe a median, rather than a mean (the mean would of course be higher, especially since Phoenix seems to be counting graduates with no law school debt in its calculation). Edit: as a commenter points out, if  Phoenix is in fact counting graduates with no debt in this calculation, the median figure for all graduates is likely higher than the mean figure for all graduates. However the US News figures are supposed to exclude people with no debt so it's unclear whether the median in that context is higher than the mean, assuming again that all schools are reporting means rather than medians, which remains unclear.  I've been working under the assumption that the graduate debt numbers reported to the ABA and US News are means, but it turns out this may be in many cases incorrect. Here's the language from the ABA questionnaire to which schools are required to respond, and whose language US News copies when it asks schools for the same data:

17.  Average amount borrowed in law school: 

a).  The average amount borrowed in law school by 2010-2011 J.D. graduates who borrowed at least
      one education loan in law school: $_____

b)      Number of 2010-2011 J.D. graduates who borrowed at least one educational loan in law school:

"Average" is -- or at least a lawyer could argue is -- an ambiguous term, and could be interpreted to signify a median rather than a mean average.  It would be interesting to learn how many schools are interpreting question #17 to mean the former rather than the latter.

All of which is to say that we have an increasing amount of evidence that the graduate debt figures reported to the ABA and US News are far from reliable, and that the real numbers may well be a lot higher than reported.  And it's increasingly clear that this entire business is in desperate need of some sort of independent auditing process, which would have been put in place long ago if either the ABA or the DOE had any real interest in getting reliable data, as opposed to the garbage they're getting fed now.

Consider what it means that Phoenix law grads are graduating with a median debt of nearly $190,000.  The good folks at Sterling Partners, bowing I suppose to the harsh reality that employment outcomes for Phoenix grads can now be looked up on the ABA website, also supply a version of those numbers on the school's website, although one has to dig around a bit to find them, unlike the prominently featured claim that the school "places 97% of its graduates into jobs within nine months of graduation."

Those stats reveal that only 49 of 131 2011 graduates purportedly got full time jobs requiring bar admission. Furthermore, almost all these jobs were with very small law firms of ten lawyers or less, or as solo practitioners.  (The 97% stat -- 94% for the class of 2011 -- is bolstered by the school hiring 16% of its graduates into short-term part-time "jobs."). Phoenix publishes no graduate salary data, but it's safe to say that not a single graduate of the 2011 class got a job that pays a salary that comes within a country mile of allowing that graduate to pay anything close to the median debt load incurred by members of the class.

In other words practically the whole class is going to go into IBR, and will end up staying there as long as the program exists.  And what percentage of these people do you suppose will be practicing law five years from now, let alone 15 or 20?

And Phoenix, which was founded in 2005, is very much getting while the getting for Sterling Partners is good: although the 2011 class had 131 members, the school had a total of 969 JD students last year, including 450 1Ls.  These people are projected to graduate, assuming costs don't go up, with a total of $183 million in student debt.

Is it OK to call this a scam?

Thursday, July 26, 2012

California court refuses to grant defendants' motions to dismiss in suits against Golden Gate and USF law schools

Orders here and here.

Cases will proceed to formal discovery.

The wisdom of Solomon

 (Updated below)

More than a week ago ITLSS pointed out that the reported debt numbers for Rutgers-Camden law graduates didn't appear to make any sense. Within a few hours, with the help of internet crowd-sourcing, it became clear what had happened: Rutgers-Camden was reporting only the law school debt incurred by its graduating class in the class's third year, rather than, as it was required to by the ABA, over the course of attending the school.  (It also became evident that Georgia State and Barry -- at least -- were making the same "mistake." The numbers for Southern and Texas Southern are probably wrong in the same way).

On Monday, Rutgers' Dean Rayman Solomon  sent an email to the school's students, purporting to explain what had happened.  Here is the relevant portion:

The third post occurred [this is a reference to the first ITLSS post linked above] on July 18th and questioned our reported number for average indebtedness at graduation.  The reported number was incorrect. Here is the sequence of events:   each year the ABA asks for information about student indebtedness.  The number for average indebtedness was one that until this year had not been publicly reported - it was reported to the ABA and they did not reprint it or disclose it.  Our process for determining that number is that one of our administrative staff members gets the data from the University's financial aid office and fills out the answer to the question.  The staff person interpreted the question as asking what the average debt was for a graduating 3L for the third year --- not the total three-year indebtedness.   This year US News asked for the data and we gave them what we had given the ABA.  US News then did a ranking on least and most expensive schools.  On the day the ranking came out I was informed by a fellow dean that we, along with a number of schools, had incorrectly interpreted the question.  I immediately informed the ABA of our mistake.  The ABA sent out an email to all schools and asked each to verify this number as there were enough schools that had the same problem to require everyone to recheck the information.  We worked with financial aid to generate the accurate number, which was more difficult than one might imagine, as it required tracing students who had started in different years and taking out the undergraduate debt of Rutgers graduates.  As soon as we could complete the process we reported to the ABA our accurate number.  When US News requested the corrected number I supplied it to them.  The ABA was completely satisfied that there was no intentional misconduct on our part.  However, I sign the ABA questionnaire certification, and I take full responsibility for this mistake.

Dean Solomon is claiming that he knew nothing about this "mistake" (which the law school he's been running since 1998 has committed every year since at least 2008 ) until March, 2012, when a helpful fellow dean informed him of it. Prior to this year, according to Dean Solomon, only the ABA had this information "and they did not reprint it or disclose it."  So Rutgers-Camden did not benefit from the misreported information, and indeed remained unaware of the  mistake until this March.

I will assume that Dean Solomon's statement that another dean contacted him is true. Every other assertion in the previous paragraph is provably false.  The facts are these:

(1) US News has been asking law schools for graduating class debt data since at least the graduating class of 2008.  It has been publishing this data on the internet, where any interested party has been able to examine it. (Note that US News gets this data directly from law schools themselves, not from the ABA).

(2) In March of 2011 US News ran a story entitled "Ten Law Degrees With Most Financial Value at Graduation."  This story ranked Rutgers-Camden as providing its graduates with the third-most valuable law degree in the country, measured in terms of the ratio between the purported average law school debt of its graduates and their purported median private sector starting salary.

(3) In November of 2011, the National Jurist ran a story on "Best Value Law Schools," giving Rutgers-Camden a grade of A- for offering "an affordable education with great job prospects." Like the March 2011 US News story, this story cited the school's remarkably low graduate debt totals.

(4) On November 15, 2011, Rutgers' Media Relations Office distributed a press release to the local and national media, quoting from and linking to both the US News and National Jurist stories ranking Rutgers-Camden as one of the most affordable and best value law schools in the nation.  This press release quotes Dean Solomon regarding the US News and National Jurist affordability/best-value rankings:

“These rankings, while gratifying, represent just a glimpse into the Rutgers–Camden law school experience,” says Rayman Solomon, dean of the Rutgers School of Law–Camden.  “Our curriculum and faculty prepare our students for success at every level of the profession.  In addition to the success of our graduates in the private sector, the Rutgers–Camden law school  also prepares them for success in the judiciary and in the public interest sector. 
So, in direct contradiction to what he asserted in Monday's e-mail to his students, Dean Solomon is on record as having known since at least November of last year that US News publishes law graduate debt rankings, and that his school does extraordinarily well in those rankings.

Of course it is utterly fantastic to imagine that Dean Solomon hasn't been perfectly well aware for several years that Rutgers-Camden has been reporting phony debt numbers to both the ABA and US News since at least 2008.  He has been the dean of the school for 14 years; it's beyond incredible to think he's been under the impression that Rutgers-Camden graduates actually graduate with debt loads one third as large as those carried by graduates of his school's most direct competitors for potential students, i.e., Rutgers-Newark and Temple. 

What is also beyond incredible is that Dean Solomon thinks it's a good idea to continue to lie so shamelessly.  I am sincerely curious if the ABA is going to do anything about the fact that Dean Solomon is lying to it about when he discovered this mistake.

I'm also curious regarding whether Bob Morse is going to do anything about the fact that as of last Friday Dean Solomon had done nothing to inform US News regarding the radically incorrect numbers US News has been publishing regarding Rutgers since at least 2008 -- numbers which by his own admission he has known for at least four months were completely wrong, although I'm fairly confident the internal communications of Rutgers University document that he has known this for much longer (perhaps some enterprising lawyer will try to find out exactly how long).

Also, it would be nice to know when US News is going to bestir itself to correct its webpage reporting average graduate debt, since it now apparently has the correct figure for 2011 from Rutgers (a figure which Dean Solomon omits to mention in his phony mea culpa to his students). In addition, inquiring minds would like to know if US News has bothered to contact Georgia State and Barry, if those schools haven't sent corrections to the publication themselves.  (Needless to say the ABA ought to be looking into these "mistakes" as well).

A final note of incredulity: I'm well aware a lot of people will still somehow find a way to characterize all this as no big deal.  The fact that a law school dean has been lying to the ABA for years about a number his school is required to report to the school's accrediting organization will be treated as somehow not important. The fact that a law school dean has provably known since last year that national publications were running stories publicizing his school on the basis of phony numbers the school has transmitted to the ABA, and he did nothing to correct the public record, will be rationalized away as insignificant ("Anybody who is naive enough to believe those kinds of stories deserves what they get").  The fact that this dean continues even now to repeat these lies to his own students is of no consequence.  By now these "kids" should know they're pretty much screwed, so what's one more lie on top of all the others?

Destroying the capacity for outrage is in some ways the worst crime these institutions commit.

Update:  Given Dean Solomon's incredible representation to the ABA that he only became aware in March that the school was reporting inaccurate graduate debt numbers, two readers have asked me to post information on how to contact the ABA regarding this matter:

Office of the Consultant on Legal Education /
Section of Legal Education and Admissions to the Bar

American Bar Association
321 N. Clark Street, 21st Floor
Chicago, IL 60654
Phone: 312.988.6738
Fax: 312.988.5681

Another reader asked for a link to my article on the law school crisis (This is an updated SSRN version of an earlier draft some readers may have downloaded from ExpressO.  The updated version includes among other things 2011 salary and debt information, along with the most current information on law schools hiring their own graduates).

Wednesday, July 25, 2012

Most top law schools still accepting applications for fall class

A couple of days ago a commenter noted that it appeared the University of Illinois might still  be accepting applications for the fall class, more than four months after the school’s formal application deadline of March 15th, and less than a month before the start of 1L orientation. 

This piqued another reader’s interest, who proceeded to call the admissions office of every top 50 law school, to see whether any of these schools were still accepting applications for the incoming class of 2012. 
At the same time yet another reader, who was planning to start law school in 2013, but who began to rethink that plan, in part because he got a very high score on the June LSAT, emailed a number of high-ranked schools, inquiring if they might entertain an application at this late date from someone with his impressive credentials.  He forwarded me some fascinating responses, and I asked him to email the rest of the top 50 as well.  (In the wake of the responses he got he has decided not to apply, but not for the reasons one might assume).

The results of these inquiries are eye-opening. Given that part of a school’s USNWR ranking is determined by its yield rate – that is, the proportion between total applicants, total acceptances, and total matriculants – it would seem in a school’s interest to have a late application deadline (in addition, application fees are a source of revenue). 
But this ignores the extent to which law schools use application deadlines as status-signaling devices. With a couple of exceptions, application deadlines are closely correlated with hierarchical status: high-ranked schools all have formal application deadlines in February or March, or at the latest early April, while low-ranked schools usually have much later deadlines.  (The two exceptions to the former rule are Alabama and Indiana-Bloomington, which extend their formal application deadlines late into the summer).

As we are about to see, the key word in the previous paragraph is “formal.”  Here is a list of top 50 schools who were still accepting applications for the 2012 class as of July 24th (The date next to the school’s name is the deadline for applications according to the school’s web site):

Chicago   (2/1)
Michigan (2/15)
Northwestern (2/15)
Cornell:   (2/1)
Georgetown (3/1)
Texas: (2/1)
UCLA:   (2/1)
Vanderbilt:  (3/15)
George Washington (4/5)
Minnesota:  (4/1)
WUSL:  (4/1)
Boston U (3/30)
Wisconsin (3/1)
Washington & Lee:  (3/1)
Alabama:  (8/8, i.e., formal deadline hasn’t passed)
Illinois: (3/1)
Emory:  (3/1)
Indiana-Bloomington:  (7/31, i.e., formal deadline hasn’t passed)
Fordham:  (3/1)               
Arizona State:  (2/1)
William & Mary:  (3/1)
George Mason: (4/1)
Brigham Young:  (3/1)
Arizona:  (2/15)
Wake Forest:  (3/15)                                                                                      
Utah:  (2/15)
Pepperdine: (2/1)
American:  (3/1)

So 28 of the 50 top schools – including eight of the top 17 -- are still accepting applications for 2012. In all but two cases they’re doing so four to six months after their formally announced deadlines, and in some instances just three weeks before the beginning of the fall semester.  

But the real story is more complicated, and more troubling.  Ten of these 28 schools told my correspondent who called the admissions office that they were not accepting applications (This person, unlike the e-mailer, gave no information about his qualifications). These ten schools are Chicago, Michigan, Texas, UCLA, George Washington, Emory, Boston U, Arizona State, Fordham, and George Mason.  (In addition, Wisconsin told the caller the answer was no, but that the school “might consider an exception.”).

What does all this tell us?

(1)    Times are already harder in even the high-rent districts of legal academia than I would have guessed.  What answer do you suppose somebody would have gotten two years ago if he had contacted Chicago and Michigan six months after their application deadlines and asked, can i still haz a look frm yr adcom plz?

(2)    Do As I Say Not As I Do, Chapter 734.  Law schools go on endlessly about “ethics” and “honor codes,” and “professional responsibility,” and the Rule of Law, but are once again willing to fold, spindle and mutilate their own rules with extreme prejudice should they find those rules in any way inconvenient to their own immediate interests.  And again, lawyers can get in big trouble when they’re caught doing similar things.

(3)    If you were on the wait list on one or more of these schools, how aggravated would you be to discover that your spot in the class might be taken by somebody who missed the application deadline by half a year?

(4)    These sorts of shenanigans illustrate yet another unfair advantage possessed by people with enough cultural capital to understand that even at high-status institutions The Rules aren’t really the rules if you know how to work the system.

(5)    Does this behavior raise any potential legal liability? My correspondent who called the schools wonders if at least the public institutions in the group who told him he couldn’t apply, while telling the e-mailer he could, might be violating certain procedural norms to an extent that could be actionable.  (There’s a nice little con law hypo).

Leaving aside questions of strict legality, this kind of thing just smells bad. How hard is it for a law school to simply tell potential applicants the truth, even about something as supposedly straightforward as its application deadline?  The answer to that question is both revealing and depressing.

Update:  Certainly situations arise where there are compelling reasons for a school to consider a late application.  It's unfortunate that schools don't make it clear that they're willing to consider such applications.  Again, as in so many other areas, the key is transparency: If a school makes it part of its announced policy that it might consider a late application under appropriate circumstances, then people have notice of the actual policy, and opportunities will arise to judge whether the school is abusing that policy. (Do "compelling reasons" end up meaning humanitarian or other equitable considerations, or letting in the big donor's kid at the last minute?).

Tuesday, July 24, 2012

Sunk costs

Suppose you’ve absorbed all the bad news about the legal job market, and you have a queasy feeling.  You’re worried that you won’t find a job as a lawyer, that you won’t like the job if you do find one, and/or that you won’t be able to pay off your loans even with a job you like.  But you’ve already invested one or two years in law school.  Should you walk away at this point?  Or does it make sense to finish the degree?

The answer, as any tiresome law professor would say, is “it depends.”  First the bad news:  The time and money that you’ve invested so far are “sunk costs.”  No matter what you do, you can’t regain those hours or dollars.  If you are a law student, you have already spent X dollars and Y hours working towards your degree.  Nothing will change that investment:  Whether you finish law school or choose a different path, those dollars and hours are gone. 

No one likes to think about “goneness,” so your brain will try to give those spent hours/dollars meaning.  This gives rise to what economists call the “sunk cost fallacy.”  Confronted with costs that can’t be recovered, people try to give the lost costs meaning—even if that leads to irrational actions.  The classic example is a person who purchases a movie ticket and then hears from a reliable friend that the movie is revoltingly awful.  At this point, the purchaser doesn’t want to see the movie; he trusts his friend that the ninety minutes will be agonizing.  On the other hand, the purchaser doesn’t want to acknowledge to himself that he wasted eight dollars on the movie ticket.  Some people will go to the movie as a way of giving value to the purchased ticket—even though, paradoxically, they will end up losing both the price of the ticket and the ninety minutes they might have spent doing something more pleasant.  Sunk costs create excruciating decisions, especially when the costs are much larger than eight dollars.

Now the slightly better news:  The time and money already devoted to law school are sunk costs, but not necessarily dead weights.  You should consider these investments when deciding whether to continue law school, but not as sunk costs that have to be validated.  Don’t think about how much you’ve invested so far.  Instead, think about what—if anything—you’ve gained.  This is not a Pollyanna exercise; it’s a way of helping you avoid the sunk cost fallacy.  The question you have to ask is:  Given my talents, experience, and potential (all as measured today), together with the particular options open to me (again, as you know them today), what is the best path forward?  Will another year or two of law school yield benefits that outweigh the costs?  Or would a leave of absence (perhaps leading to a permanent departure) produce a better outcome?  To answer those questions, you have to fully assess your current position—including whatever you’ve gained from time in law school. 

If you’ve finished one or two years of law school, you’re a different person than you were as a 0L. You know a little more about law practice, and a lot more about the challenges of the job market.  You’ve gained the basic skill of thinking like a lawyer, and maybe some more specialized skills (knowledge of a particular doctrinal area, experience mediating, etc).  You know about your own performance in law school—what you loved, what you hated, where you excelled, and where you had trouble.  You can also estimate what your performance, combined with other experiences and attributes, might yield for you on the job market. 

I'm not suggesting that those gains were worth the price; given the high price of law school, both financially and personally, there's a good chance the gains were not worth their cost.  But that's not the relevant question now; regrets will lead you straight to the sunk cost fallacy.  Instead, you have to assess your current position, including any gains you've realized while in law school, without thinking about the amounts you've already paid.  In my next post, I'll suggest how to apply your assessment of your current position, as well as the other information you've gathered, to think through next steps.

Update: [LP] Previous posts by DJM on this topic are here and here.

The absurdity of UC-Irvine

A few years ago, somebody decided it would be a good thing for the University of California to open another law school. Now even a few years ago this was obviously a terrible idea.  Today . . . well.

So it has come to pass that UC-Irvine's dean, Erwin Chemerinsky, has taken to the pages of the National Law Journal to explain why it's actually a good thing that the dumpster fire that is the California market for new (and old) attorneys has now been supplemented by another law school. And not just another law school, but one that will charge nearly $47,000 this year in resident tuition and fees, and $53,000 to non-residents, while conveniently located smack in the middle of one of the most expensive places to live in the USA.  (Estimated cost of attendance at UCI this fall is $71,000/$77,000.  Debt-financing a law degree  from the school will result in a total debt of $250,000 to $280,000 for the class of 2015 six months after graduation, assuming COL increases).

But a funny thing happened on the way to the apologia: Chemerinsky's article is around a thousand words long, and exactly none of them are dedicated to explaining either why California needs a new law school or whether that school is worth anything like the cost of attending it.

Instead, the article is dedicated to the proposition that it's impossible -- literally impossible -- to provide a "quality" legal education for much less than the mind-boggling price UCI is charging for this increasingly less in demand product.  This argument takes the form of an attempt to refute some of the central claims of Brian Tamanaha's Failing Law Schools, such as that law professors are paid too much.

Tamanaha is correct that law professors are paid significantly more than university faculty in disciplines like English, philosophy and history. Imagine that a law school tried to pay at that level, say roughly half of current faculty salaries at top law schools. Who would come and teach at a school where they got paid half what other law schools would pay them, and who would stay there when other opportunities arose?
Current faculty salaries at top law schools range from nearly $200,000 for entry-level hires (including summer money) to double that or more for the highest-paid senior people.  So Chemerinksy's argument -- which as so often the case in our business lacks any reference to concrete numbers -- is that you can't staff a "quality" law school faculty with people getting paid $100,000 to $200,000 per year.

Now it just so happens that the latter pitifully inadequate salary scale  is a higher pay scale than that which obtained at elite (let alone typical) law schools not so long ago, as in the early 1980s. (I am of course adjusting for inflation).  So the idea that one can't staff a "quality" law school with people getting paid half of what professors at top law schools today is obviously absurd from a historical perspective.  (Not to mention that there are plenty of lower-tier law schools today that have salary scales that look like those of elite law schools 30 years ago).

Of course it isn't the 1980s any more. Expectations have changed. Indeed they have -- law professors at top schools expect to get paid stupendous salaries for teaching two to three classes per year, supervising the composition of law review articles, counting SSRN downloads etc.  And professors at third and fourth tier schools expect to have the same salaries and teaching loads that professors at elite schools enjoyed a generation ago.  But what has changed can change again.

Chemerinksy claims raising teaching loads wouldn't do much to alter legal education's absurd price structure because lots of professors at UCI are teaching four courses per year.  As so often is the case in this business of ours an anecdote fills in for data: The actual data indicate the standard teaching package at all top 50 schools and many second tier schools is three classes per year, and the functional teaching package at the elites, once one takes into account research leaves, sabbaticals, etc., is closer to two.  Again, a generation ago four courses was the standard package at a few elite schools, while five and six courses were standard everywhere else.

So cutting faculty compensation and raising teaching loads to those which obtained when Chemerinksy was getting what I assume he still considers an adequate legal education would in fact result in an enormous reduction in law school budgets, since faculty salary and benefits make up 50% to 60% of the typical law school's expenditures.  Now it's true it's difficult for schools to proceed in this direction, because of a collective action problem.  But that collective action problem will start disappearing faster than cashews in a bowl of mixed nuts as soon as a few central administrations decide that the envelopes coming over from the law school seem way too light this year.

Of course even bigger cost savings can be realized by returning to the faculty-student ratios that existed 30 years ago.  Across legal academia, faculty-student ratios have been cut in half, going from 29.1 to 1 in 1978 to 14.9 to 1 in 2008.  (Harvard had a ratio of 21 to 1 as recently as the late 1990s. Today it's 10 to 1 -- and that's actually quite a bit higher than most elite schools).

In other words we're not talking rocket surgery here.  Chemerinksy's argument that such measures will result in an unacceptable sacrifice in quality is the kind of argument one always hears from defenders of cartels that maintain wildly inefficient price structures.  (Not to mention that, if anyone has even tried to establish that American legal education is appreciably "better" than it was 30 years ago, I'm unaware of the effort).

But all this is really quite beside the point.  Let's assume for the purposes of argument that it really does cost as much as Chemerinsky says it does to provide a quality legal education.  The problem is that, going forward very few of UCI's graduates are going to get jobs that even begin to justify UCI's cost.  Even making the extraordinarily optimistic assumption that UCI ends up placing its grads down the  line as well as UCLA and USC do, this means that perhaps one third will get six-figure jobs, and maybe half of those people will hold on to them long enough to have a reasonable shot at getting their educational debt down to manageable levels.  And that, needless to say, is the optimistic projection.

The more realistic projection is that UCI ends up placing people in high paying legal jobs about as well as Hastings does.  And that outcome doesn't come within a light year of justifying either school's cost.

Ultimately what happens to UCI isn't very important per se (except, naturally, to the people who are reckless enough to enroll there this fall without a massive discount on advertised tuition).  What's important is that the model of legal education Chemerinksy is defending is economically unsustainable. That's Tamanaha's point, and there isn't a word in Chemerinsky's reply that's responsive to it.

Monday, July 23, 2012

Cooley counts temp doc review as a full-time long-term job

Friday a federal judge ruled that because "the [employment and salary] statistics provided by Cooley and other law schools in a format required by the ABA were so vague and incomplete as to be meaningless," those statistics "could not reasonably be relied upon." Therefore anybody who did rely on those statistics could not claim to have been defrauded, since the statistics were too fraudulent to defraud reasonable people (If this argument makes sense to you, you have what is called a legal mind).

Over the last year and a half enough pressure has been brought to bear on the ABA's Section of Legal Education that the lower-tier law school deans and faculty who control it have been forced to disgorge school-specific employment (but not salary) information.  People who apply to Cooley and other law schools can go to an ABA web page and look up how many 2011 graduates of those schools supposedly got full-time long-term jobs requiring bar admission.

There they will learn that Cooley reported 375 of 999 2011 graduates got such jobs (that's approximately 37.5% for us English majors).  That sounds pretty awful, but even this dire number is probably significantly overstated.  Leaving aside the fact that 21.3% of those "jobs" consist of the 80 2011 Cooley grads who listed themselves as solo practitioners, if we go to Cooley's web page and dig around long enough to actually find the placement data page, we will find this footnote in small print underneath the first employment table (brought to my attention by a law professor who prefers to remain nameless):

NOTE: The ABA advised schools to determine and report every graduate’s full-time/long- or short-term and part-time/long- or short-term employment status, even if a graduate did not voluntarily supply complete information. Of those 2011 graduates reporting sufficient information for Cooley to make this determination, slightly more than 87 percent reported full-time/long-term employment. Based on this high percentage, the default classification for those lacking complete data was full-time/long-term unless Cooley had evidence to contradict that classification.

Note also that graduates working for legal temporary agencies were classified as full time/
long term due to the nature of their employment contract with the temporary agency.
Did you get that? Cooley grads who didn't indicate whether they were employed full-time, or long-term, were simply classified by the school as employed in full-time long-term jobs unless the school "had evidence to contradict that classification."  (I suspect they didn't look too hard for such evidence).

This methodology produces some remarkable comparative results.  For instance, according to Cooley's calculations, 91.7% of its 2011 grads who had legal jobs were in full-time/long-term positions, which is a higher percentage than Cornell (85.5%), UCLA (72.5%), Notre Dame (72.8%), and indeed the vast majority of ABA law schools.

Of course it helps pump up a bottom-feeding law school's "full-time/long-term" employment rate when it counts temporary document review positions as full-time long-term employment, which is precisely what Cooley has done. I can only imagine what jesuitical arguments were deployed by whoever decided that the "nature" of temp agency employment contracts required grads on doc review gigs the day their employment status was determined to be counted as employed in "long-term" positions (Most temp agency doc review positions last a few weeks. If you're curious about the life, JDU has a whole section devoted to it).

So even now Cooley continues to pump its employment stats full of as much hot air as its administrators think they can get away with.  What's remarkable is that, even when presented in this gamed-up form, the stats required by the brand new reporting regimes reveal how flat-out crazy anyone would have to be to attend Cooley (with exceptions as always for the independently wealthy and people who just need a law license to step into a guaranteed job).

Those stats indicate that Cooley was able to determine that a total of 10.9% of the school's 2011 grads were making a salary of $46,000 or more, at a school where the average level of law school debt at graduation (not total educational debt) is now over $115,000.  Nearly 40% of the class was either completely unemployed or had an unknown employment status. That the employment status of 263 out of 999 2011 Cooley grads was unknown is perhaps the single most remarkable aspect of the school's employment statistics. (The other four law schools in the state graduated 1,074 people in 2011.  A total of nine of these graduates had an unknown employment status).

I guess Cooley figures that what the school doesn't know can't hurt it. Hopefully fewer and fewer law school applicants are employing the same logic.

Sunday, July 22, 2012

A few notes on the Cooley decision

Federal district judge Gordon Quist has granted Cooley's motion to dismiss the class action suit brought against it. The short version of the opinion is that the plaintiffs should have known Cooley is a horrible law school, that the ABA reporting standards regarding employment with which Cooley complied are a joke, and that Cooley's self-published employment reports are so "inconsistent, confusing, and inherently untrustworthy" that a reasonably prudent person would not have relied on them.

In short the opinion creates a new common law exception to caveat emptor, which is that, as long as the defendant does not literally lie, it is not liable for representations that are so misleading on their face that they should put a reasonable person on notice that they are misleading, and therefore shouldn't be relied on.

Yet even by this astoundingly lax standard Judge Quist shouldn't have granted the motion, since he misapplies it to what Cooley actually did.  Consider his analysis of this portion of Cooley's 2010 employment report:




Theodore Souris, Augustus B. Woodward, and James Witherell classes

(September 2009, January 2010, and May 2010)
Number of 2010 graduates934
Number of graduates with employment status known780
Percentage of graduates employed76%
Average starting salary for all graduates$54,796

The learned judge then observes:

In the 2010 Employment Report,  [*18] Cooley indicates that 76% of its graduates were employed within nine months of graduation. This statistic could, at most, refer only to the 780 graduates who responded to the survey because Cooley could not know the employment status of those who did not respond to the survey. Since 780 of Cooley's graduates responded to the survey, this statistic, standing by itself, says that 593 of Cooley's graduates were employed. 187 were unemployed, and the employment status of 154 of Cooley's graduates was unknown (934 minus 780).
 But that's not what this table says.  The table says, "Percentage of graduates employed: 76%."  It does not say "Percentage of graduates employed whose employment status is known: 76%.  After all, if 91% of Cooley's graduates with a known employment status were employed, then that would mean 710 graduates (76% of 934) were employed.  In fact if I were reading this table and didn't know it had been published by a law school, I would have assumed, oddly enough, that "Percentage of graduates employed" ought to be understood to mean "Percentage of graduates employed."

Clearly, what the plaintiffs Souris, Woodward, and Witherell should have done, if they had been reasonably prudent persons, was to construct a time machine.  They could have then used this machine to visit April, 2012, when the ABA first published school-specific employment data. Then, after examining this newly available data and noting that Cooley's "employment" rate for its 2010 graduates was actually 17.5% lower than the school claimed it was in the above table, they could have used the same machine to go back to the middle of the previous decade, when they were actually deciding whether to enroll at Cooley.  (Why employment statistics published in 2011 have any relevance to enrollment decisions made at least four years earlier  remains a mystery).

Indeed while they were visiting the future, they also could have enlightened themselves via recently published New York Times and Wall Street Journal articles regarding the deceptive reporting practices of law schools, or even perused a scam blog or 50.

Note that Judge Quist claims "the 'percentage of graduates employed' statistic is not objectively false," because the school did not represent that 76% of its graduates got jobs as lawyers. But he's simply wrong about that: Cooley's claim, made in the most straightforward English, that it knew 76% of its 2010 graduates were employed -- in any capacity -- in February of 2011 was as objectively false as a claim can be.

This is just one of several absurdities in Judge Quist's opinion.  The judge cites several cases in which plaintiffs relied on inaccurate statements from defendants, but failed to recover because they had information readily available to them which would have informed them that the statements they were relying on were inaccurate:

"[T]here can be no fraud where the means of knowledge regarding the truthfulness of the representation are available to the plaintiff and the degree of their utilization has not been prohibited by the defendant." The court in Schuler held that misrepresentations about the inventory of an automotive dealership were not actionable for the plaintiff who bought the dealership because the true figures and value appeared in schedules that the plaintiff received before making the deal. "Plaintiff either knew or could have readily discovered every material fact that was known by defendants at the time of sale."  (emphasis added)
So how were the plaintiffs here supposed to "readily discover" that Cooley's representations regarding its employment and salary figures were wildly misleading and featured at least one facially untrue statement?   The answer, it seems, is that it "should" have been self-evident to the plaintiffs that Cooley's published statistics were "inherently untrustworthy!"

Without question, the Employment Reports are inconsistent, confusing, and inherently untrustworthy. For example, whether Plaintiffs are referring to the median or mean average, there is an ambiguity in the descriptor of salary because the average salary stated in Cooley's dissemination assumes the existence of a salary in the first place. 8 In other words, a question arises, as it arose in oral argument, does the statistic  [*29] consider the "salaries" of those Cooley graduates who were not employed or who were sole practitioners who listed a salary of zero? Plaintiffs argued, as stated above, that to have failed to consider a "zero" salary would be misleading. But maybe not. This is the kind of question that a person serious about considering this statistic would ask. Plaintiffs and prospective students should have approached their decision to enter into law school with extreme caution given the size of the investment. Thus, even though Plaintiffs did not know the truth of how many graduates were used to calculate the average salary, at the very least, it is clear that the Employment Report has competing representations of truth. See id. at 683 (citing Schuler, 197 N.W.2d at 495). With red flags waiving [sic] and cautionary bells ringing, an ordinary prudent person would not have relied on the statistics to decide to spend $100,000 or more.
In other words, prospective law students who were imprudent enough to believe Cooley's "obviously" bogus statistics got what they deserved.

And the judge makes clear that what he's saying applies with equal force to anyone who should be reckless enough to ever believe any statistics published by law schools pursuant to ABA "disclosure" requirements. Indeed, the judge goes so far as to quote the plaintiffs' response as evidence for the proposition that everybody knows or should know that law schools lie about their stats, so what's the big deal?

'[I]t is widely accepted that American law schools, Cooley included, employ all  [*32] sorts of legerdemain to boost employment rates in a contracting legal market' (Pls.' Resp. at 5); once again, Plaintiffs state that they had other reasons to not rely upon the Employment Reports.
(This of course is yet another example of the Negligent Failure to Employ a Time Machine defense).

Judge Quist ends on a note that is sure to fill the members of our learned profession with pride:
The bottom line is that the statistics provided by Cooley and other law schools in a format required by the ABA were so vague and incomplete as to be meaningless and could not reasonably be relied upon. But, as put in the phrase we lawyers learn early in law school—caveat emptor.

I will have more to say about Cooley tomorrow morning.