Law school fuzzy grad jobs stats: A federal offense?

March 16, 2012: 10:20 AM ET

Widespread manipulation of law school employment data may boost a school's rankings, but it might also be considered federal fraud, according to a new study.

By Elizabeth G. Olson, contributor

Columbia Law School

Columbia Law School has been subject to increased scrutiny over its job placement stats.

FORTUNE -- Every year, law school deans anxiously await the release of national rankings, and for good reason. A school's prestige, revenues, and perhaps even its future depend on them.

The U.S. News & World Report released their famed rankings on Tuesday, and even deans of successful law schools may find that snagging a top spot on the list may come at a harsh cost.

Accusations that law schools have "gamed" the system by providing incomplete, misleading, or even downright false data on incoming students and graduate employment have marred the competition. So far, law schools are brushing off legal suits by jobless, or seriously underemployed, graduates and other efforts to pry open precise employment data, and clinging to the ivory-tower system of plentiful applicants with deep pockets.

But law school officials may take notice -- and umbrage -- when they see the title of a new study by two law school professors: "Law Deans in Jail."

The 77-page paper, written by Emory University School of Law professors Morgan Cloud and George Shepherd, concludes that widespread manipulation of law school graduate employment data may have not only pushed institutions higher in the national law school rankings, but also could be considered "mail and wire fraud under federal law."

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The U.S. News ranking of the country's law schools may be so flawed by deceptive or misleading statistics submitted by the country's law schools that "the harm done for many years to thousands of people has been so severe, it should not be hard to recognize the need for investigations by federal authorities to determine whether crimes have been committed," the pair conclude in the paper.

"We have simply looked at law schools and the rankings as if they were any other industries, subject to the same laws that apply to everyone else," says Cloud in an interview about the draft study, which was published on the Social Science Research Network.

Outrage spreads to top-tier schools

So far, Cloud and Shepherd say they have not received any reaction from either deans or the American Bar Association, which accredits nearly 200 law schools nationwide, but they are not the only insiders holding law schools up to increased scrutiny.

Civil lawsuits filed last year against a dozen law schools across the country are making their way through state and federal courts, Congress is looking into holding a hearing on law school reporting practices, and more details of law school employment data are surfacing regularly on the web.

This week, Columbia University and New York University's prestigious law schools started to feel the heat.

After both schools posted additional employment data, Paul Campos, a law professor behind the Inside the Law School Scam blog, found that the two top-line schools appear to have inflated the number of law school graduates who landed "big law" jobs, meaning associate jobs at firms with more than 250 lawyers.

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Such a job is the coveted brass ring of the legal profession, with typical starting annual pay at $160,000, bonuses, and a shot at the ultimate prize of a million-dollar-plus law partnership -- greatly offsetting the six-figure debt that students can accumulate during three years of law school.

Campos, who teaches constitutional law at the University of Colorado, found that the two schools reported that a total of 555 2010 graduates found full-time legal employment at major law firms. Campos compared that figure to a listing by a major legal publication, the National Law Journal, which routinely tracks such information, which placed the number at 448 -- or nearly 20% less than the law school's placement offices reported.

"Law schools may be cooking the books, or be incompetent in reporting or it may be that firms are hiring career associates and not partner-track associates," says Campos. "But it's a huge discrepancy. And it could show a level of arrogance that could mean trouble for law schools."

Both NYU and Columbia have issued public responses claiming that these assertions are misleading.

Amy Rotenberg, the spokesman for the American Bar Association's section on legal education, which has responsibility for law school accreditation, says that it had sent its own questionnaire to law schools, and that the section's council is setting in motion changes to accreditation standards. However, nothing final will be adopted until this summer.

Day of reckoning coming?

Even as law schools cling to traditional ways of doing business -- paying six-figure professor salaries and offering expensive perks -- and freely gild the institution's reputation, the quality of its students, and their post-graduation prospects, law school deans are unlikely to be hauled before a criminal court.

"Again and again, people talk about gaming the law school rankings," says Shepherd. "But if gaming means publishing false or deceptive information, law schools that do this could face civil or even criminal liability."

Cloud and Shepherd say U.S. News & World Report law school rankings, which dominate the field, have particular influence on "many students' decisions about which schools to attend, and to pay dearly for the privilege.

"When the rankings are based in part upon false data, then those who are responsible may be guilty of federal crimes," they wrote in their paper.

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Last year, Villanova University and the University of Illinois each admitted that for several years they had submitted false information about law school applicants, including their median undergraduate grade point averages and law school admissions test scores, both data points used to compile the national law school rankings.

The ABA allows law schools to report salary information of the highest earning graduates as if it were representative of the entire class. Also, law schools do not distinguish between graduates practicing law full-time and those working part-time or in non-legal fields.

Even so, "the profession has seemed blind to the possibility that some law schools, U.S. News, and their employees may have committed crimes for profit," the law professors wrote. U.S. News did not offer comment for this story.

In Congress, Senator Barbara Boxer (D-Calif.) has called on the American Bar Association to do more for the admission and post-graduate information that law schools report. Her office says it wants a hearing, but no date has been set.

Facing the facts

While around 44,000 people graduate from law school a year, they face a market where 15,000 or more legal jobs have vanished in recent years due to outsourcing to foreign countries and industry streamlining.

The ABA has asked law schools for more precise data to review ways to increase oversight and transparency, and U.S. News has requested greater transparency from law school deans.

But results have been mixed. One law school even rolled back the amount of information available to prospective enrollees, says Kyle McEntee, who posts such information on the website of nonprofit Law School Transparency.

Among top tier law schools -- where debt can be steep -- employment data can be hard to parse as well. Columbia University's law school, which kept its No. 4 national ranking this year, says that it did not exaggerate its employment numbers because two dozen law firms did not report their hiring, and employed graduates who had not been admitted to the bar were not included in the overall total.

"It's true that the elite bar is hiring fewer people," says David Schizer, dean of Columbia's law school. "But is Columbia affected? No."

The flap over fudging hiring numbers, he says, was a concern only because "Columbia is the gold standard. People are aware of how much being here does for their careers."

But Campos, writing on his blog, says, "I'll say this for Columbia: the place doesn't lack for chutzpah. When it comes to fundraising, they probably use NSA [National Security Agency] databases to secure their alums' cell phone numbers and GPS nanotechnology to track their exact locations."

But the veracity of the school's stunning 98% graduate employment stats, Campos writes, remains a "deep and abiding mystery."

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