Graduates sue their law schools for illegal marketing tactics

Fifty-one recent law school graduates are suing their alma maters in New York, California, Illinois, Delaware and Florida for consumer fraud, the Wall Street Journal reported December 27.

And according to an article by University of Missouri law professor Ben Trachtenberg, to be published in the June 2013 Nebraska Law Review, the biggest question is what took them so long.

For years, he notes, law schools nationwide have been routinely practicing the kind of illegal marketing tactics that would get any other marketer hauled up before the FTC – with no consequences other than the forced resignation of two law school deans over as many years.

“In their efforts to maintain enrollment,” Trachtenberg writes, “law school officials have engaged in deceit and misrepresentation,” using “highly misleading advertising,” “misleading statistics” and “bald-faced lies.”

“The abuses here weren’t so small,” one legal blogger notes:

Law schools made specific representations about salaries, scholarships, and other facts to encourage six-figure investments. The people making the representations were professionals with advanced degrees, who had inside knowledge of the legal industry. Most of the people receiving the representations were college students with relatively little knowledge of either law schools or law practice.

Lies, damn lies and statistics

One example of misleading marketing, which Trachtenberg calls a “brazen falsehood,” was falsifying undergraduate GPA and LSAT scores.

Another is padding graduates’ employment and salary statistics.

For example, a recruitment e-mail blast from the Rutgers-Camden law school claiming “our average starting salary for a 2011 graduate who enters private practice is in excess of $74,000, with many top students accepting positions with firms paying in excess of $130,000.” The only problem is, only 11 percent of their 2011 graduating class reported their salaries, and that’s way too small a sample for an average. And, of course, that weaselly qualifier about “accepting positions” with law firms totally excludes those 2011 graduates with no jobs, or no law jobs, at all.

Taken together, this creates what Trachtenberg calls “a highly misleading sales pitch.”

But that’s nothing compared to a New York Law School document which counts “graduates unable to find legal jobs who work in retail, childcare of food service” as being employed in the “corporate/business” category. Well, Starbucks and McDonalds are corporations and businesses.

When law schools do talk about graduates actually doing legal work, they count part-time and temporary jobs and “‘eat-what-you-kill’ arrangements in which a firm allows a recent graduate to associate with established lawyers without receiving a salary” as if they were full-time, salaried employment.

In general, law school statistics count as “employed” graduates whose employment outcomes are far from what most law students would consider successful. For example, schools for years commonly reported the percentage of students who were “employed” with no qualifications concerning (a) whether a job is part-time or full-time, (b) whether a job is temporary or permanent, or (c) whether a job is legal or non-legal (that is, whether the graduate has a job requiring bar admission). Accordingly, a student could count as “employed” while holding a part-time, non-legal temporary job (such as a twenty-hour-per-week, temporary, secretarial position). This phenomenon continues today [and is] representative of what law schools have disseminated for years.

Phony jobs

Among the numbers for graduates employed in law jobs are those in what law schools call “Entry into Practice” and “Postgraduate Fellowship” programs and Trachtenberg calls “Statistics-Enhancing Jobs at Law Schools.”

The University of Virginia, Vanderbilt University and Washington & Lee University law schools’ marketing materials claimed that 90 to 98 percent of their classes of 2010 were employed nine months after graduation, while conveniently forgetting to mention that 11 percent of those graduates were working for the schools themselves.

Nationally, 9 percent of ABA-accredited law schools hired between 11 and 15 percent of their own 2010 graduates.

At Boston University, fully one of four working law graduates (25 percent) was working for the university.

Scholarships with a hidden catch

Law schools offer desirable applicants seemingly full merit-based scholarships while forgetting to mention that those scholarships are renewable, based on class rank at the end of the first year.

They typically offer such scholarships to more than half the entering class, with renewals for only the top third, based on first-year grades. This means that at least one-sixth (16.7 percent) will be left holding the bag, with nothing more than a “too bad, kid, you should’ve read the fine print” for their efforts.

Underreported student debt

“[L]aw schools have long understated the amount of educational debt incurred by their students,” Trachtenberg writes, “with some schools recently admitting they have underreported their graduates’ indebtedness by as much as two-thirds” in reports to the ABA.

This is because they somehow manage to overlook non-tuition loans (e.g., for books and housing), post-degree loans (even if the law school issued them) and loans from outside sources (e.g., banks).

Ignoring the law

If you think there oughta be a law against that, there is – or at least a Rule of Professional Conduct.

Rule 8.4(c) states that “It is professional misconduct for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”

Trachtenberg supplies more than ample evidence that “dishonesty, fraud, deceit or misrepresentation” is exactly what too many law schools have been involved in.

Yet, there have been no investigations, no ethics hearings, no disbarments, no trials – just two count ’em two resignations.

When business executives who don’t know the law commit fraudulent or misleading marketing, the lawyers, the courts and the regulatory agencies come down on them like a ton of bricks. When law professors and deans, who do know the law but break it anyhow, do the same thing, some kind of old boys’ rule kicks in and they’re allowed to get away with it.

Leaving the only enforcement of the law whatever to come from those 51 cheated law graduates. At least they’re showing they have “knowledge of law schools or law practice.”