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Monday, March 26, 2012

Tamanaha: Law Schools Continue to Game Employment Stats to Goose U.S. News Ranking

U.S. News LogoBalkinization, New York Law School's "Victory" Was a Defeat for Law Schools--And Why the ABA Transparency Rules Will Fail, by Brian Tamanaha (Washington U.):

When the fraud lawsuit against New York Law School was dismissed last week, the school proclaimed vindication. It was anything but that. What Judge Schweitzer ruled is that no reasonable consumer would have relied upon the obviously inflated employment percentages and salary numbers posted by the school. ... 

While I have doubts about the soundness of the judge’s decision in this case, he is absolutely correct that prospective law students must not take at face value employment numbers advertised by law schools. The recent US News ranking confirms that, despite new ABA reporting rules, law schools nationwide continue to advertise unbelievably high employment numbers for graduates.

By all accounts, 2010 was the worst year so far in the most dismal market for legal employment in several decades (though 2011 might yet turn out to be worse). Only 64% of 2010 graduates obtained full time jobs as lawyers. Given the poor job market, and given the new reporting rules imposed by the ABA, one would have expected that the employment figures law schools reported for their 2010 graduates would be substantially lower than for 2009. That did not happen, however—numerous law schools continue to claim that over 90% of their 2010 graduates obtained employment. ...  Had the new ABA rules been effective in producing greater transparency, law schools across the board should have shown large drops.

A few striking anomalies will expose the depth and pervasiveness of the problem (additional anomalies are identified here and here).

Yale Law School, to its credit, reported a significant drop in employment, falling from 96.5% in 2009 to 91.8% in 2010. That sounds about right for a top school like Yale in a historically tough employment environment. What’s puzzling is that every other top 15 school reports a higher employment rate, despite Yale’s two major advantages: It is ranked #1, with the most outstanding student credentials, and the size of its graduating class is relatively small, making it easier to place most everyone.

Incredibly, a number of law schools ranked far beneath Yale reported a notably higher employment rate, including George Mason (96.4%), Loyola Marymount (94.1%), Kentucky (94.2%), and UNLV (93.2%). Even a few bottom schools reported employment on a par with Yale: Florida International (90.1%), Baltimore (91.2%), Akron (91.8%), Toledo (90.1%), and Atlanta’s John Marshall (91.6%). It is absurd to think that any of these schools exceeded or matched Yale’s employment rate.

Washington University (my own institution), even more so than Yale, reported a drastically reduced employment rate, falling from 95.5% in 2009 to 80.7% in 2010. (Ouch!) Our 80% employment rate is unusually low among top 25 law schools—not until the 76th ranked law school is a lower employment number reported. Indeed, a significant number of bottom 100 law schools (including New York Law School) report a higher employment percentage. Wash. U. paid a severe price in the ranking for reporting such a poor employment number, falling from 18th to 23rd, despite improving in other measures. Dean Syverud, the incoming Chair of the ABA Section on Legal Education, was determined to scrupulously comply with the new ABA reporting standards, knowing that the school would likely suffer as a result. Understandably, a number of students vocally questioned the wisdom of his decision, given the resulting fall in ranking.

A few ranking winners exhibited anomalies in the opposite direction. The two biggest climbers in the first tier were the University of Washington (up from 30 to 20) and Arizona State University (up from 40 to 27). Both schools somehow defied the legal recession and reported significant leaps in their employment rate. UW went from 89.5% in 2009 to 96% in 2010; ASU went from 89.8% in 2009 to 98.2% in 2010. (Both schools put Yale to shame--or perhaps the opposite.)

ASU’s feat is especially curious because its (usually) closely ranked peer school, Arizona (ranked 42 last year and 43 this), has similar scores on most measures except for employment. In a year when ASU reported a large jump in employment, claiming the highest rate in the entire country, Arizona’s employment rate dropped from 89.4% to 87.4% (a couple of percentage points down like most schools). This is an odd disparity given that they are even-handed competitors in the same legal market. These results are even more peculiar when one considers that Arizona’s bar pass rate (93.7%) was much higher than ASU’s (85.9%).

Looking at bar pass rates exposes another set of strange findings. At most law schools the bar pass rate is about the same as or higher than the employment rate—that makes sense because a graduate cannot hold a job as a lawyer without passing the bar. However, eighteen law schools in the top 100 report employment rates at least 10% above their bar pass rate. At the high-rising University of Washington, for example, 96% were reported as employed, but only 85% of the class passed the bar. ASU likewise had a much higher employment rate than bar pass rate (in contrast to Arizona). ...

Inexplicably, several schools list students in “JD required” jobs at a percentage higher than the school’s bar pass rate. ... It’s not clear how the number of students in “JD required” jobs can exceed the number of students who passed the bar, since the latter is necessary for the former. (The employment figures are taken 9 months after graduation, subsequent to the bar results.) ...

It bears emphasizing that the ABA has already implemented a stricter set of reporting requirements—and the above results occurred under the new ABA regime.

The fundamental problem here is that law schools can technically tell the “truth” even when they report absurdly high employment percentages. The categories themselves—“academic,” “business,” “JD preferred,” “employed job unknown”—beg for abuse. They guarantee the situation will not improve. ...

To regain its traditional parity with ASU, Arizona will be sorely tempted next year to more liberally categorize future graduates as employed in “academic” or “business” positions, or will use some other expedient to raise its employment rate to approximate ASU’s. ASU’s aggressive gaming thus puts pressure on Arizona to aggressively game. ...

The “weakest link” problem in game theory is a situation in which the worst actor(s) produce negative consequences that affect everyone. The law school ranking competition is a “weakest link” situation in the sense that, as long as aggressive massagers exist among law schools, there will be immense pressure on every law school to engage in aggressive massaging just to keep up. Good behavior under these circumstances will be punished in the ranking (and honorable deans will be fired)—and dubious behavior will be rewarded (and strategic deans will get raises). That is why the ABA reforms will inevitably fail.

There is only one possible solution: Only full-time “JD required” jobs should be counted and advertised by law schools. Any other category is susceptible to manipulation and will be exploited by law schools to conceal poor employment results. Current claims that the ABA reporting rules will improve transparency because they provide more “granular data” are wrong—they will produce more obfuscation by law schools.

If only full-time “JD required” jobs can be reported, law schools will be stripped bare and prospective students will finally get a clear look at their real job prospects. Law schools undoubtedly will vehemently oppose this proposal, calling it unfair, failing to credit them for all the great non-lawyer jobs their graduates are getting. If you find that argument persuasive, I have a used car I would like to sell you—it has terrific resale value and gets great gas mileage.

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Comments

"Inexplicably, several schools list students in “JD required” jobs at a percentage higher than the school’s bar pass rate. ... It’s not clear how the number of students in “JD required” jobs can exceed the number of students who passed the bar, since the latter is necessary for the former. (The employment figures are taken 9 months after graduation, subsequent to the bar results.) ..."

The foregoing statement does not quite sound right. A "JD required" job only requires a JD, i.e., a degree, not bar passage. Therefore, people can hold a "JD required" job without having passed the bar.

Posted by: Andy Patterson | Mar 26, 2012 4:34:57 PM

"What Judge Schweitzer ruled is that no reasonable consumer would have relied upon the obviously inflated employment percentages and salary numbers posted by the school."

If students applying to a school that ranks #135 in USNWR would not relied upon the data, what does that say about law school applicants (consumer) to the Top 100, Top, 50, Top 25, and Top 10 law schools?

Posted by: tax guy | Mar 26, 2012 6:00:34 PM

I challenge Andy to name one job that's "JD required" but does not require bar passage.

Legal academic? No, there are PhD faculty who never got a JD. (Consider: "Slightly more than 18% of law professors with Ph.D. degrees possess a Ph.D. degree but no law degree." http://law.marquette.edu/facultyblog/2011/09/08/what-should-be-the-prerequisites-for-becoming-a-law-professor/ ).

LSAT tutor? No, because the only prerequisite for that is having taken the LSAT, not having actually gone to law school.

Legal researcher? No, consider career paralegals with a deeper knowledge of Wexisberg than any 3L.

The only common situation where a JD is required, but bar passage is not, is in the "stub" year of a first year Biglaw associate or judicial clerkship position which, by their traditional start dates post-July, presumes that one is "bar pending" and often make continuance in the job contingent on eventual bar passage.

The fact is, "JD required" is a proxy for "job where one is engaged in the practice of law." The legal recruiting market bears this out, Andy's fanciful suppositions be damned. Consider also that every state has laws against the unauthorized practice of law, that specifically prohibit one from misrepresenting to the public, by act or omission, whether one is licensed to practice, such as by putting "JD" after one's name without a disclaimer.

Posted by: WL | Mar 27, 2012 12:12:03 PM