Showing posts with label job market for lawyers. Show all posts
Showing posts with label job market for lawyers. Show all posts

Monday, April 24, 2017

Whittier Law School is closing: "They shoot horses,don't they?"

Whittier Law School is closing. And well it should.

Whittier Law School, which a Daily Caller writer described as "one of America’s crappiest law schools," has a crummy record by almost any measurement. In 2016, 174 Whittier graduates took the California Bar Exam, and only 40 passed. That's a 22 percent pass rate, compared to a 62 percent pass rate among California law-school graduates as a whole.

And Whittier Law graduates are having a hell of a time finding jobs as lawyers. Less than 30 percent of Whittier's class of 2016 landed long-term jobs as attorneys ten months after graduating, according to an article published in abovethelaw.com. And only 2 percent found jobs in large law firms, which generally pay the highest salaries.

Yet, in spite of low employment rates and  a dismal bar-passage record, Whittier charges its students a lot of money. It cost $45,000 a year to attend Whittier Law School in 2016, not including books and living expenses. On average, Whittier's 2016 graduates left school owing $179,000 in student-loan debt.

Clearly it was time to put Whittier Law School out of its misery before it attracted another class of students who would graduate with massive debt and little chance of getting an attorney's job that would pay enough to justify $179,000 in student loans.

Of course, the law-school faculty objected. In fact some of them filed a lawsuit in an unsuccessful effort to persuade a judge to stop the law school from closing.

Law-school dissenters even trotted out that old bromide about the law school's commitment to diversity. The law school's web site avowed that it sought to provide "a high quality education to students of diverse backgrounds and abilities--students who might not otherwise have been able to receive a legal education and who are now serving justice and enterprise around the world."

What a load of bull!

It is true that U.S. News & World Report recently ranked Whittier as the nation's second most diverse law school. A majority of its students are nonwhite and a majority are women. But a law school that leaves its graduates with an average of $179,000 in student loans and little prospect of a lawyer's job is not doing anything positive toward promoting diversity.

I commend the Whittier Board of Trustees for having the courage to close Whittier Law School. Other universities need to do the same--at least two dozen by my reading of data compiled by Law School Transparency.

There are simply not enough law jobs for people who graduate from second- and third-tier law schools, and the cost of attending these schools is more likely to leave graduates with a lifetime of indebtedness than a lucrative career as an attorney.

After all, as Jane Fonda's character said in an old movie about endurance dancing, "They shoot horses, don't they?"

"They shoot horses, don't they?"

References

Sonali Kohli, Rosanna Xia, and Teresa Watanabe. Whittier Law School is closing, due in part to low studentachievement. Los Angeles Times, April 20, 2017.

Elizabeth Olsen. Whittier LawSchool Says It Will Shut Down. New York Times, April 19, 2017.


Staci Zaretsky. Whittier Law School Will Close, Leaving Disaster In Its Wake. abovethelaw, April 20, 2017.




Friday, March 25, 2016

Unemployed Lawyers with Student Loan Debt: The Law Schools Should Be Forced To Bear Part of The Cost of Law School Loans

Recently, I wrote about Anna Alaburda, who sued Thomas Jefferson School of Law, her law school alma mater. Alaburda spent  $150,000 to attend TJSL. After graduating in 2008, she was unable to find a remunerative law job; and her student loan debt grew to $170,000. She claimed she was induced to enroll at Thomas Jefferson by the law school's false assertions that most of its graduates got well-paying legal jobs.

Alaburda's case went to trial, and this week a jury ruled against her.  Alaburda's loss is the latest in a string of defeats by unemployed or underemployed law school graduates who sued their law schools for fraud or misrepresentation.

Some unemployed or underemployed lawyers have filed for bankruptcy to discharge their student loans, but they've had mixed success. Michael Hedlund, a graduate of Willamette Law School, succeeded in getting a partial discharge of his law-school debt, but he endured ten years of litigation before the Ninth Circuit Court of Appeals rendered a decision in his favor in 2013.

More recently, two heavily indebted law-school graduates were denied bankruptcy relief. Mark Tetzlaff, racked up thousands of dollars in debt to pursue post-secondary studies; and he eventually received an MBA and a law degree from Florida Coastal School of Law, a bottom-tier law school. Tetzlaff actually paid off his law school debt, which he was required to do in order to get Florida Coastal to release his transcripts. But he never obtained a good job as an attorney, and he was unable to pay off other student loans. When he filed for bankruptcy in 2012, he owed $260,000 in student-loan debt.

The Eighth Circuit was not sympathetic to Mr. Tetzlaff's plight and refused to discharge his student loans in a decision released last year. And the U.S. Supreme Court refused to hear his appeal.

Likewise, a bankruptcy court in California ruled against Mark Lilly in 2013. Like Mr. Tetzlaff, Mr. Lilly took on a massive amount of student-loan debt, including debt he acquired to obtain an MBA and a law degree from McGeorge School of Law in Sacramento, which is not a top-ranked law school. His request for bankruptcy relief was denied, but he never found work as a lawyer.

This is the tragic reality: the legal job market has imploded, but law schools have not reduced enrollments sufficiently in response to the shrinking demand for lawyers. Law schools continue to pump out far more attorneys than American society needs, and many law schools have lowered their admissions standards just to get students in the door. For people like Mark Tetzlaff and Mark Lilly, who graduated from mediocre law schools, there are virtually no jobs. In California, for example, there are now 2.5 law graduates for every job opening.

Thus far, law graduates have borne most of the suffering created by a shrinking job market, especially graduates who received their degrees from nonprestigious law schools like Florida Coastal, Thomas Jefferson, and McGeorge. On average, law graduates who borrow to finance their studies acquire $140,000 in student-loan debt. Graduates of Thomas Jefferson School of Law, where Anna Alaburda obtained her degree, now graduate with an average debt load of $180,000! Many simply can't find jobs that will allow them to pay off their student loans.

In my view, some of the suffering experienced by unemployed law graduates should be shifted to the law schools, which have charged students exorbitant tuition and are graduating more students than our economy can absorb. These schools purport to maintain the highest ethical standards, but in reality, many of them are making admissions decisions based on their revenue needs and not the welfare of their students.

Whether or not they are guilty of misrepresentation, as Ms. Alaburda asserted  against TJSL, many law schools are certainly guilty of behaving contrary to the public interest. Surely, these schools should help their unemployed graduates pay back massive student-loan debt that was acquired to obtain degrees that are virtually worthless.

References

Hedlund v. Educ. Resources Inst., Inc., 718 F.3d 848 (9th Cir. 2013).

Lilly v. Illinois Student Assistance Comm’n, 538 B.R. 45 (Bankr. S.D. Cal. 2013).

Elizabeth Olsen. Law Student Gets Her Day in Court. New York Times, March 6, 2016. http://www.nytimes.com/2016/03/07/business/dealbook/court-to-hear-suit-accusing-law-school-of-inflating-job-data.html?smid=fb-nytimes&smtyp=cur&_r=1

Tetzlaff v. Educational Credit Management Corporation794 F.3d 756 (7th Cir. 2015). Accessible at http://caselaw.findlaw.com/us-7th-circuit/1708687.html

Thomas M. Cooley Law School v. Kurzon Strauss, LLP, 759 F.3d 522 (6th Cir. 2014). Accessible at http://www.ca6.uscourts.gov/opinions.pdf/14a0139p-06.pdf

Gary Warth. Jury rejects fraud claim against law school. San Diego Union-Tribune, March 24, 2016. Accessible at http://www.sandiegouniontribune.com/news/2016/mar/24/thomas-jefferson-law-school-verdict/

Joshua Wright. The Oversaturated Job Market for Lawyers Continues and On-the-Side Legal Work Grows. EMSI blog, January 10, 2014. Accessible at: http://www.economicmodeling.com/2014/01/10/the-oversatured-job-market-for-lawyers-continues/

Monday, January 18, 2016

Trouble in Paradise: Thomas Jefferson Law School is sued by one of its graduates, who accuses the school of "fraudulent business practices"

Law school, it has been said, is the best option for people who want to make a lot of money but are risk adverse.

Once, there was once a lot of truth in that observation. Twenty-five years ago, law-school graduates had great employment opportunities.  People graduating from the most prestigious law schools commanded very high salaries, and even people who graduated from second-tier schools and had mediocre grades had a fair chance at earning a decent living.

But that is no longer true. The job market for attorneys has collapsed. There is a massive glut of lawyers in the United States, and there is now only about one job available for every two law-school graduates.

At the same time, tuition rates at the nation's law schools has shot up.  To cite one example, it now costs 36 times more to attend the University of Texas School of Law than it did when I was a student there 35 years ago (from $1,000 a year to $36,000 a year).

Today, most people can't attend law school without borrowing a lot of money, and job prospects for people who graduated from second- and third-tier law schools are not good. Thousands of law-school graduates are carrying student-loan debt that they can't repay.

Unfortunately, some law schools continued to tout high employment rates for their graduates--rates that bore no resemblance to reality in a falling job market. Some graduates are claiming they were enticed into attending law school by false representations that there were good jobs awaiting them when they graduated.

Clark Moffatt sues his alma mater for "fraudulant and deceptive business practices."

This brings me to the case of Moffatt v. Thomas Jefferson School of Law. Clark Moffatt, a 2009 graduate of TJSL,  filed a lawsuit against his alma mater in 2014, alleging "fraudulent and deceptive business practices."

Moffatt claims he decided to enroll in TJSL based on the school's representation that a high percentage of its graduates got jobs. The law school's employment statistics were published in U.S. News & World Report. Reasonably relying on TJSL's representations, Moffatt says, he borrowed about $100,000 to pay TJSL's tuition.

TJSL's representations, Moffatt alleged, were "false, misleading, inflated, and inaccurate." According to Moffatt, TJSL claimed that 92.1 percent of its 2009 graduating class were employed nine months after graduation, which suggested that more than 90  percent of its graduates were working in full-time, law-related positions.

In fact, Moffatt charges, those employment figures included people who were working part time or in non-law related jobs. "In other words, if graduates accept part-time employment working as a waiter or a clerk at a convenience store, they are considered to be 'employed nine months after graduation.'"

Moffatt claimed that TJSL categorized many people who were not working in law jobs as being employed in "business/industry," including people working in unskilled positions. "TJSL admits that its policy is to categorize all unskilled labor positions as 'business/industry,' including TJSL graduates who are employed as a stripper, cocktail waitresses, and restaurant servers."

In spite of a plummeting job market for lawyers, Moffatt said in his complaint, TJSL increased the number of students it enrolled each year, and it also lowered its admission standards. In 2005, the law school accepted only about one applicant out of four. By 2012, "TJSL's acceptance rate jumped to 73 percent. In 2013, according to Moffatt, TJSL accepted more than 4 out of 5 applicants.

Most of TJSL's students borrowed money. Indeed, Moffatt's complaint alleges, the New York Times reported in 2011 that TJSL led the nation's law schools in student indebtedness, with 95 percent of students graduating with debt.  The average debt load for TJSL graduates, Moffatt said in his complaint, is $180,000!

Moffatt's complaint in Moffatt v. Thomas Jefferson School of Law is 18 pages long and well worth reading. Its description of TJSL's policies, if accurate, shows a a mediocre law school with very high tuition and high levels of student debt increasing its enrollment and dropping its admission standards during a falling job market for lawyers. Not a pretty picture.

Will Clark Moffatt win his law suit?

The Moffatt case is scheduled for trial in March of this year. It may be settled before trial; and in fact, the case may already have been settled under terms that were not publicly disclosed.  It is common for institutions to settle high-profile litigation like the Moffatt case under terms that forbid the parties from disclosing any details. This is how the Catholic Church settled many of the priest abuse lawsuits that were filed against it.

Even if the case goes to trial, Clark Moffatt may lose. Graduates of Thomas M. Cooley Law School lost their fraud case against a Michigan non-profit law school. The Sixth Circuit Court of Appeals ruled that it was unreasonable for the law school's graduates to rely on the school's salary statistics. And a student at Arizona Summit Law School lost her fraud claim against a for-profit law school operated by Infilaw Corporation.

Judges may be reluctant to rule against law schools in cases like Mr. Moffatt's. If he wins, then hundreds of Thomas Jefferson law graduates might also have valid claims. And a fraud judgment against a law school would open the door for former students to petition the Department of Education for student-loan forgiveness. One judgement against a law school based on facts like those Moffatt alleged could have cascading financial consequences.

Why is Moffatt v. Thomas Jefferson School of Law significant?

Regardless of the outcome, Moffatt v. Thomas Jefferson School of Law is a significant case because it illustrates the high risks that students run when they borrow money to enroll in law school--particularly second- and third-tier schools like Thomas Jefferson, Arizona Summit, and Thomas M. Cooley.

Tuition at all these schools is extremely high, and most students must take out student loans in order to pay their tuition bills. Obviously, people who attend these schools hope they will find a good job after graduation that will justify six-figure debt loads. As Clark Moffatt said in his complaint, "Nobody attends law school to get a job as a convenience store clerk."

Nationwide, law-school enrollment levels are dropping as many intelligent individuals conclude that going to law school is not longer a good financial bet.  But law schools have not lowered their enrollments enough to match the falling demand for lawyers.

Instead, many have kept their enrollment-levels high while lowering their admission standards.  Some law schools have admission standards so low that a majority of their graduates are at high risk of failing the bar exam.

The law schools have not been responsible in addressing the imploding job market for lawyers.  They admit too many students, and their tuition rates are too high. In my view, there is no justification for the stratospheric rise in law-school tuition.

Some law-school graduates who were unable to find well-paying legal jobs have filed for bankruptcy, but the courts have not always been sympathetic.  In Tetzlaff v Educational Credit Management Corporation, for example, the Seventh Circuit Court of Appeals refused to discharge the student-loan debt of a law-school graduate who graduated from a bottom-tier law school with mountains of debt and who had failed the bar exam twice.

In my opinion, American law schools have put revenues ahead of their students' welfare, and the American Bar Association has not policed legal education in a responsible way. Thus far, unemployed and underemployed lawyers who are swamped by student-loan debt have only two options for relief. They can file for bankruptcy, hoping to discharge their debts in the bankruptcy courts. Or they can do what Clark Moffatt did and sue their alma maters for misrepresentation.

References

Steven J. Harper. Too Many Law Students, Too Few Legal Jobs, New York Times, August 25, 2015. Accessible at: http://www.nytimes.com/2015/08/25/opinion/too-many-law-students-too-few-legal-jobs.html

Lorona v. Arizona Summit Law School, No. CV-15-00972-PHX-NVW, 2015 U.S. Dist. LEXIS 168862 (D. Ariz. Dec. 16, 2015).

McDonald v. Thomas M. Cooley Law School, 724 F.3d 654 (6th Cir. 2013).

Moffatt v. Thomas Jefferson Law School, No. 37-2014-00033723-CU-PN-CTL, filed in California Superior Court for the County of San Diego, Oct. 2, 2014.

David Segal, Is Law School A Losing Game? New York Times, January 8, 2011. Accessible at: http://www.nytimes.com/2011/01/09/business/09law.html?_r=0

Joshua Wright. The Oversaturated Job Market for Lawyers Continues and On-the-Side Legal Work Grows. EMSI blog, January 10, 2014. Accessible at: http://www.economicmodeling.com/2014/01/10/the-oversatured-job-market-for-lawyers-continues/







Sunday, October 25, 2015

American Law Schools Have Embraced Greed And Have Become Poor Models for the Ethical Practice of Law

Many years ago when I was a practicing lawyer, my senior law partner made an observation I never forgot. Law graduates become the kind of attorney they will always be, he remarked, based on their first law job.

And based on my experience, my law partner's assessment is 100 percent accurate. Young people who graduate from law school and begin working for an ethical law firm are molded into ethical lawyers and remain ethical lawyers all their lives. Fledgling attorneys who join firms with sloppy ethics or an undue focus on making money become ethically sloppy themselves, and the slipshod ethical standards of their first employer shape their entire careers.

But of course attorneys' ethical values are being shaped even before they take their first law jobs. Law students first begin developing their ethical standards while in law school. In their classroom interactions and their examinations, they learn the value of honesty and fair dealing.

And if this is true, then it is important for law students to attend law schools that model the highest ethical standards. For if law students see their law schools make decisions based on greed and self-promotion, it seems likely that the students themselves will adopt similar attitudes about the legal  profession.

And this brings me to an editorial in today's Sunday Times entitled "The Law School Debt Crisis." In 2012, the Times reported, the average law graduate accumulated $140,000 in debt; and yet newly minted attorneys are entering a job market in which 43 percent of them cannot find long-term, full time jobs in the legal field.

Simply put, the market for lawyers is flooded. Many sensible young people have analyzed their job prospects if they go to law school and have decided to choose other professions. In fact, as Steven J. Harper reported in a New Times op ed essay a few months ago, law-school enrollment has slipped from 52,000 in 2010 to 38,000 last year.

But the drop in law-school enrollments has not kept pace with the slump in demand for lawyers. Most law schools depend on tuition money for the vast majority of their income; they simply must attract students to maintain their revenue streams. Consequently, they have lowered admissions standards to keep heir enrollments up. In 2014, the Times pointed out, test scores on the common portion of the LSAT were the lowest they have been in 25 years.

In sum, this is the state of the legal field. Law schools all over the United States hiked their tuition in response to a change in federal law that allowed students to borrow the full amount of their graduate education. And law schools also admitted more students to boost revenues. When the market for lawyers crashed, law schools did not reduce their fees or cut their enrollments sufficiently. The result, to use the Times' language, is a "death spiral" in the legal job market with unemployed or under-employed attorneys carrying mountains of student-load debt that they can't pay off.

Ironically, the glut in lawyers is occurring at the same time distressed student-loan debtors are filing for bankruptcy without the aid of  attorneys. When these overburdened student-loan borrowers file adversary proceedings to discharge their student loans through bankruptcy, they are opposed by loan collection companies that have plenty of high-paid legal talent.

How can this disaster be turned around? The Times recommends expanding the Obama administration's so-called gainful employment rules that tie an institution's eligibility for federal student-aid money to its success in preparing graduates for good jobs. Currently the rule only applies to for-profit law schools, but the Times urges the rule be amended to cover nonprofit law schools as well.

The Times also thinks a cap should be placed on the amount of federal student loans a student can obtain. A cap in federal loan money, the Times believes, would drive tuition down.

 I support both these ideas, but I would go further. I would shut off federal student-aid money to all for-profit schools, including for-profit law schools, which charge extraordinarily high tuition and have lousy records for placing their graduates in good jobs that require law degrees.

For the American people, the stakes are high. Our society is based on the rule of law, and our law schools must produce graduates who are intelligent and have the highest ethical standards. But American law schools have set a poor ethical example for their students. They have bloated their student rolls and raised their tuition for the sole purpose of sucking up student-loan money and enhancing their revenues.

Our justice system will break down completely if our nation's lawyers adopt the ethical standards of the law schools they attended and begin thinking of their profession solely as a way to get rich.

References

Editorial. The Law School Debt Crisis. New York Times, October 25, 2015. Accessible at: http://www.nytimes.com/2015/10/25/opinion/sunday/the-law-school-debt-crisis.html

Steven J. Harper. Too Many Law Students, Too Few Legal Jobs. New York Times, August 25, 2015.  Accessible at: http://www.nytimes.com/2015/08/25/opinion/too-many-law-students-too-few-legal-jobs.html

Elizabeth Olsen. Burdened With Debt, Law School Graduates Struggle In Job Market. New York Times, April 26, 2015. Accessible at: http://www.nytimes.com/2015/04/27/business/dealbook/burdened-with-debt-law-school-graduates-struggle-in-job-market.html