New York Law School

Law grads take their job frustrations to court

August 31, 2011: 5:00 AM ET

As more law school graduates facing six-figure debt loads are either unable to find a legal job or taking low-paying legal drone jobs, some are opting to sue their alma maters for fraudulent advertising.

By Elizabeth G. Olson, contributor

FORTUNE -- Budding law school students are still coming in droves, tuition coffers are plentiful, and faculty still receive generous six-figure salaries. And some top-performing graduates continue to land the golden $160,000 first-year law firm job.

But law schools are no longer the pathway to a secure, tony professional future they once were. The legal job market is undergoing shifts that could upend the way law schools do business and even how the public thinks about a legal diploma.

Anger has been building as more law school graduates are facing five or six-figure debt loads from their legal education but are either unable to find a legal job, or any work for that matter, or taking low-paying legal drone jobs.

Fed up, several groups of graduates are going to court to stop law schools from engaging in what they argue is fraudulent advertising. Job placement figures are misleading or are outright wrong, claim some of the newly degreed students who have struggled to latch on to jobs as the traditional legal hiring structure erodes.

Alexandra Gomez-Jimenez, 30, was so frustrated with her job search after earning her law degree in 2007 that she decided this summer to sue her alma mater, New York Law School, for fraudulent advertising. She and other graduates of the Manhattan-based law school filed a lawsuit claiming they were duped by exaggerated job placement stats that law schools publish to attract students.

"When I was applying, New York Law School said employment right out of school was high," says Gomez-Jimenez, who worked as a paralegal after graduating from college.

New York Law's school literature, she says, claimed that alumni would find jobs with $70,000 to $80,000 salaries, and that 90% found jobs within six months of graduating. "I looked at it as their having a network of connections that would get me a job. But I never got help, or even an interview."

5 bright spots in a dim jobs picture

New York Law School's dean, Richard Matasar, has publicly defended the school's practices but did not respond to a request for comment for this article. Matasar also happens to be the head of the American Law Deans Association, which was formed to change law school accreditation practices and policies.

Gomez-Jimenez says that she still had no job six months after earning her law degree and was facing her first payment on $190,000 in loans for tuition, books, and living expenses. She found a temporary job reviewing legal documents. Eventually, she hung a shingle as an immigration lawyer but decided to join the class action suit after seeing a Craigslist ad looking for plaintiffs.

Other Frustrated American law school graduates also have filed lawsuits against Thomas M. Cooley Law School, which has four campuses in Michigan and is opening another near Tampa, Fla., and Thomas Jefferson School of Law in San Diego.

These schools turn out large numbers of graduates, but it's not just diploma-mill law schools that are in this particular game, says David Anziska, a lawyer for Kurzon Strauss, the New York law firm that represents the plaintiffs in the New York Law School and Cooley law school cases.

"Law schools all make it a secret, but it's not just the recession. This has been going on for a long time," Anziska says, noting that many law schools are portraying the dearth of jobs as a blip due to the poor economy. "Law schools need to adopt rigorous methods that tell you the extent of full-time legal employment."

Moving to shed some sunlight on law grad job market

Even as the legal job market tumbles, law schools have been moving at a glacial pace to adjust to the new economic reality. But after a 2010 commission studied the economy's impact on legal employment, and regulators asked questions, the American Bar Association took a major step last month toward requiring law schools to be more specific about the actual employment outlook of their graduates.

At the same time, federal lawmakers have begun to question the accrediting body, formally called the ABA Section of Legal Education & Admissions to the Bar, about how its process accounts for rising default rates on federally backed student loans. A law student today accrues an average of $98,000 in debt for three years of legal education, up more than 200% from the 1987 average.

A panel of accreditation experts from the U.S. Department of Education fanned the flames of this debate in June when it publicly questioned whether law schools -- 200 of which are accredited by the ABA -- were taking adequate steps to collect job placement information from their graduates.

This was welcome news to Kyle McEntee, co-founder of nonprofit organization Law School Transparency, which has been trying for several years to pry open the doors of the law school establishment and bring greater openness to what law students can expect when they graduate.

"There is a culturally embedded belief that a law degree brings financial success," says McEntee, who started Law School Transparency with fellow Vanderbilt Law School alum Patrick Lynch. "So far, there has been a lot of talk in the legal profession, but we want law schools to lay out the specifics so students can have the necessary information to make a decision."

It took the ABA well over a year to agree to tighten employment-reporting requirements for the law schools it accredits. It will hold schools responsible for the completeness and accuracy of the data. Prospective law students will have to wait some time before they can benefit from any of these new requirements, as the first such questionnaire won't go out until in February of next year, and the questions themselves are still up for debate.

But McEntee concedes that "systemic reforms to legal education will not occur by simply opening up the window and letting in a little sunlight," and that academics and practicing lawyers need to step up and argue for reform.

All quiet on campus?

Overhauling law school job reporting has drawn a blizzard of support from jobless law grads, but few academics have been outspoken about upending the currently cozy situation for law schools and their parent universities. Paul Campos, a constitutional law professor at the University of Colorado law school at Boulder, happens to be one notable exception to the rule.

Campos claims that the National Association of Law Placement already collects adequate employment data, and it doesn't look too pretty. NALP figures show a 51% employment rate for 2010 law school graduates, and figures may well be as low as 45% of those who have full-time, permanent legal jobs, according to Campos's calculations.

"It's really striking what an enormous gap there is between actual employment and what law schools say," he says. "It might be called puffery, or more unkind things.

"None of them wants to be any more honest than they have to be," he says. And students hesitate to tell the truth about their employment, because it could tarnish the law school's reputation and diminish the value of their degree, he adds.

Rankings published by U.S. News and World Report -- fuel law schools' fear of scaring off applicants, whose choices are heavily influenced by the annual listings. A reliance on these rankings has driven schools to distort their data, and students seldom report their actual salaries, critics argue.

Campos, who started looking into the issue after many of his students struggled to find work, says he estimates that only 63% of grads nationally find jobs a year after graduation, when excluding those holding non-legal jobs or doing part-time or temporary work. The NALP figure is 88%.

Although applications are slowing -- 10% fewer people applied than last year -- a substantial number, nearly 80,000 people, still applied to law school for this upcoming fall, according to the Law School Admissions Council's latest figures.

At the same time, grads like Gomez-Jimenez say they are determined to reform the process by pursuing their class action suits in court.

"I don't expect to get any money out of this lawsuit," she says. "But I want to change the process. They get so much money from us, but the law school didn't even try to help me or my classmates."

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