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http://www.nytimes.com/2011/01/09/education/edlife/09ap-t.html?
January 8, 2011
Is Law School a Losing Game?
By DAVID SEGAL
IF there is ever a class in how to remain calm while trapped beneath $250,
000 in loans, Michael Wallerstein ought to teach it.
Here he is, sitting one afternoon at a restaurant on the Upper East Side of
Manhattan, a tall, sandy-haired, 27-year-old radiating a kind of surfer-dude
serenity. His secret, if that’s the right word, is to pretty much ignore
all the calls and letters that he receives every day from the dozen or so
creditors now hounding him for cash.
“And I don’t open the e-mail alerts with my credit score,” he adds. “I
can’t look at my credit score any more.”
Mr. Wallerstein, who can’t afford to pay down interest and thus watches the
outstanding loan balance grow, is in roughly the same financial hell as
people who bought more home than they could afford during the real estate
boom. But creditors can’t foreclose on him because he didn’t spend the
money on a house.
He spent it on a law degree. And from every angle, this now looks like a
catastrophic investment.
Well, every angle except one: the view from law schools. To judge from data
that law schools collect, and which is published in the closely parsed U.S.
News and World Report annual rankings, the prospects of young doctors of
jurisprudence are downright rosy.
In reality, and based on every other source of information, Mr. Wallerstein
and a generation of J.D.’s face the grimmest job market in decades. Since
2008, some 15,000 attorney and legal-staff jobs at large firms have vanished
, according to a Northwestern Law study. Associates have been laid off,
partners nudged out the door and recruitment programs have been scaled back
or eliminated.
And with corporations scrutinizing their legal expenses as never before,
more entry-level legal work is now outsourced to contract temporary
employees, both in the United States and in countries like India. It’s
common to hear lawyers fret about the sort of tectonic shift that crushed
the domestic steel industry decades ago.
But improbably enough, law schools have concluded that life for newly minted
grads is getting sweeter, at least by one crucial measure. In 1997, when U.
S. News first published a statistic called “graduates known to be employed
nine months after graduation,” law schools reported an average employment
rate of 84 percent. In the most recent U.S. News rankings, 93 percent of
grads were working — nearly a 10-point jump.
In the Wonderland of these statistics, a remarkable number of law school
grads are not just busy — they are raking it in. Many schools, even those
that have failed to break into the U.S. News top 40, state that the median
starting salary of graduates in the private sector is $160,000. That seems
highly unlikely, given that Harvard and Yale, at the top of the pile, list
the exact same figure.
How do law schools depict a feast amid so much famine?
“Enron-type accounting standards have become the norm,” says William
Henderson of Indiana University, one of many exasperated law professors who
are asking the American Bar Association to overhaul the way law schools
assess themselves. “Every time I look at this data, I feel dirty.”
IT is an open secret, Professor Henderson and others say, that schools
finesse survey information in dozens of ways. And the survey’s guidelines,
which are established not by U.S. News but by the American Bar Association,
in conjunction with an organization called the National Association for Law
Placement, all but invite trimming.
A law grad, for instance, counts as “employed after nine months” even if
he or she has a job that doesn’t require a law degree. Waiting tables at
Applebee’s? You’re employed. Stocking aisles at Home Depot? You’re
working, too.
Number-fudging games are endemic, professors and deans say, because the
fortunes of law schools rise and fall on rankings, with reputations and huge
sums of money hanging in the balance. You may think of law schools as
training grounds for new lawyers, but that is just part of it.
They are also cash cows.
Tuition at even mediocre law schools can cost up to $43,000 a year. Those
huge lecture-hall classes — remember “The Paper Chase”? — keep teaching
costs down. There are no labs or expensive equipment to maintain. So much
money flows into law schools that law professors are among the highest paid
in academia, and law schools that are part of universities often subsidize
the money-losing fields of higher education.
“If you’re a law school and you add 25 kids to your class, that’s a
million dollars, and you don’t even have to hire another teacher,” says
Allen Tanenbaum, a lawyer in Atlanta who led the American Bar Association’s
commission on the impact of the economic crisis on the profession and legal
needs. “That additional income goes straight to the bottom line.”
There were fewer complaints about fudging and subsidizing when legal jobs
were plentiful. But student loans have always been the financial equivalent
of chronic illnesses because there is no legal way to shake them. So the
glut of diplomas, the dearth of jobs and those candy-coated employment
statistics have now yielded a crop of furious young lawyers who say they
mortgaged their future under false pretenses. You can sample their rage, and
their admonitions, on what are known as law school scam blogs, with names
like Shilling Me Softly, Subprime JD and Rose Colored Glasses.
“Avoid this overpriced sewer pit as if your life depended on it,” writes
the anonymous author of the blog Third Tier Reality — a reference to the
second-to-bottom tier of the U.S. News rankings — in a typically
scatological review. “Unless, of course, you think that you will be better
off with $110k-$190k in NON-DISCHARGEABLE debt for a degree that qualifies
you to wait tables at the Battery Park Bar and Lounge.”
But so far, the warnings have been unheeded. Job openings for lawyers have
plunged, but law schools are not dialing back enrollment. About 43,000 J.D.
’s were handed out in 2009, 11 percent more than a decade earlier, and the
number of law schools keeps rising — nine new ones in the last 10 years,
and five more seeking approval to open in the future.
Apparently, there is no shortage of 22-year-olds who think that law school
is the perfect place to wait out a lousy economy and the gasoline that fuels
this system — federally backed student loans — is still widely available.
But the legal market has always been obsessed with academic credentials,
and today, few students except those with strong grade-point averages at top
national and regional schools can expect a come-hither from a deep-pocketed
firm. Nearly everyone else is in for a struggle. Which is why many law
school professors privately are appalled by what they describe as a huge and
continuing transfer of wealth, from students short on cash to richly
salaried academics. Or perhaps this is more like a game of three-card monte,
with law schools flipping the aces and a long line of eager players, most
wagering borrowed cash, in a contest that few of them can win.
And all those losers can remain cash-poor for a long time. “I think the
student loans that kids leave law school with are more scandalous than
payday loans,” says Andrew Morriss, a law professor at the University of
Alabama. “And because it’s so easy to get a student loan, law school
tuition has grossly outpaced the rate of inflation for the last 20 years. It
’s now astonishingly high.”
Like everything else about the law, however, the full picture here is
complicated. Independent surveys find that most law students would enroll
even if they knew that only a tiny number of them would wind up with six-
figure salaries. Nearly all of them, it seems, are convinced that they’re
going to win the ring toss at this carnival and bring home the stuffed bear.
And many students enroll for reasons other than immediate financial returns.
Mr. Wallerstein, for instance, was drawn by the prestige of the degree. He
has no regrets, at least for now, even though he seems doomed to a type of
indentured servitude at least through his 30s.
“Law school might not be worth it for another 10 or 15 years,” he says, “
but the riskier approach always has the bigger payoff.”
True, say Professor Henderson and his allies. But he contends that law
schools — which, let’s not forget, require students to take courses on
disclosure and ethics — have a special moral obligation to tell the truth
about themselves. It’s an obligation that persists, he says, even if
students would sign on the dotted line no matter what.
“You’re beginning your legal education at an institution that is engaging
in the kind of disreputable practices that we would be incredibly
disappointed to discover our graduates engaging in,” he says. “What we
have here is powder keg, and if law schools don’t solve this problem, there
will be a day when the Federal Trade Commission, or some plaintiff’s
lawyer, shows up and says ‘This looks like illegal deception.’”
WHEN he started in 2006, Michael Wallerstein knew little about the Thomas
Jefferson School of Law, other than that it was in San Diego, which seemed
like a fine place to spend three years.
“I looked at schools in Pennsylvania and Long Island,” he says, “but I
thought, why not go somewhere I’ll enjoy?”
Mr. Wallerstein is chatting over lunch one recent afternoon with his fiancé
e, Karin Michonski. She, too, seems unperturbed by his dizzying collection
of i.o.u.’s. Despite those debts, she hopes that he does not wind up in one
of those time-gobbling corporate law jobs.
“We like hanging out together,” she says with a laugh.
If love paid the bills, these two would be debt-free tomorrow. But it doesn
’t, and Mr. Wallerstein has no money in the bank, no assets and — aside
from the occasional job as a legal temp — no wages to garnish. He and Ms.
Michonski live rent-free in a nearby brownstone, in return for keeping an
eye on the elderly man who owns the place.
“Sometimes the banks will threaten to sue,” he says, “but one of the
first things you learn in law school, in civil procedure class, is that it
doesn’t make sense to sue someone who doesn’t have anything.”
He remembers little about the promotional materials the Thomas Jefferson
school sent when he applied in 2006, other than a pamphlet with lots of
promising numbers. That was before the economy crumbled, but the school’s
postgraduate data still looks fabulous, particularly given its spot in the
fourth and bottom tier of U.S. News’s rankings. The most recent survey says
92 percent of Thomas Jefferson grads were employed nine months after they
earned their degrees.
Beth Kransberger, associate dean of student affairs at Thomas Jefferson,
stands by that figure, noting that it includes 25 percent of those graduates
who could not be located, as well as anyone who went on to other graduate
studies — all perfectly kosher under the guidelines.
Like lots of administrators, she defends the figures she gathers and laments
that so many other schools are manipulating results.
“You need to take the high road,” she said. “Schools that are behaving
the most ethically want students who come to law school with their eyes open
.”
Even students with open eyes, though, will have a hard time sleuthing
through the U.S. News rankings. They are based entirely on unaudited surveys
conducted by each law school, using questions devised by the American Bar
Association and the National Association for Law Placement. Given the stakes
and given that the figures are not double-checked by an impartial body,
each school faces exactly the sort of potential conflict of interest lawyers
are trained to howl about.
The surveys themselves have a built-in bias. As many deans acknowledge, the
results are skewed because graduates with high-paying jobs are more likely
to respond than people earning $9 an hour at Radio Shack. (Those who don’t
respond are basically invisible, aside from reducing the overall response
rate of the survey.)
Certain definitions in the surveys seem open to abuse. A person is employed
after nine months, for instance, if he or she is working on Feb. 15. This is
the most competitive category — it counts for about one-seventh of the U.S
. News ranking — and in the upper echelons, it’s not unusual to see claims
of 99 percent and, in a handful of cases, 100 percent employment rates at
nine months.
A number of law schools hire their own graduates, some in hourly temp jobs
that, as it turns out, coincide with the magical date. Last year, for
instance, Georgetown Law sent an e-mail to alums who were “still seeking
employment.” It announced three newly created jobs in admissions, paying $
20 an hour. The jobs just happened to start on Feb. 1 and lasted six weeks.
A spokeswoman for the school said that none of these grads were counted as
“employed” as a result of these hourly jobs. In a lengthy exchange of e-
mails and calls, several different explanations were offered, the oddest of
which came from Gihan Fernando, the assistant dean of career services. He
said in an interview that Georgetown Law had “lost track” of two of the
three alums, even though they were working at the very institution that was
looking for them.
As absurd as the rankings might sound, deans ignore them at their peril, and
those who guide their schools higher up the U.S. News chart are rewarded
with greater alumni donations, better students and jobs at higher-profile
schools.
“When I was a candidate for this job,” said Phillip J. Closius, the dean
of the University of Baltimore School of Law, “I said ‘I can talk for 10
minutes about the fallacies of the U.S. News rankings,’ but nobody wants to
hear about fallacies. There are millions of dollars riding on students’
decisions about where to go to law school, and that creates real
institutional pressures.”
Mr. Closius came from the University of Toledo College of Law, where he
lifted the school to No. 83 from No. 140, he said. Among his strategies:
shifting about 40 students with lower LSAT scores into the part-time program
. Because part-time students didn’t then count in the U.S. News survey —
the rules have since been changed — Toledo’s bar passage rate rose, which
helped its ranking.
“You can call it massaging the data if you want, but I never saw it that
way,” he says. Weaker students wound up with lighter course loads, which
meant that fewer of them flunked out. In his estimation, a dean who pays
attention to the U.S. News rankings isn’t gaming the system; he’s making
the school better.
Unfortunately, he says, not all schools play fair.
Of course, fair play is hardly encouraged. Any institution with the guts to
report, say, a 4 percent drop in postgraduate employment would plunge in the
rankings, leaving the dean to explain a lot of convoluted math, and the
case for unvarnished truth, to a bunch of angry students and alums.
Critics of the rankings often cast the issue in moral terms, but the problem
, as many professors have noted, is structural. A school that does not
aggressively manage its ranking will founder, and because there are no cops
on this beat, there is no downside to creative accounting. In such
circumstances, the numbers are bound to look cheerier, even as the legal
market flat-lines.
“We ought to be doing a better job for our students and spend less time
worrying about whether another school is five spots ahead,” says David N.
Yellen, dean of the Loyola University Chicago School of Law. “But in the
real world you can’t escape from the pressures. We’re all sort of trapped.
I don’t know if anyone is out-and-out lying, but I do know that a lot of
schools are hyping a lot of misleading statistics.”
WHEN Mr. Wallerstein started at Thomas Jefferson, he was in no mood for
austerity. He borrowed so much that before the start of his first semester
he nearly put a down payment on a $350,000 two-bedroom, two-bath condo,
figuring that the investment would earn a profit by the time he graduated.
He was ready to ink the deal until a rep at the mortgage giant Countrywide
asked if his employer at the time — a trade magazine publisher in New
Jersey — would write a letter falsely stating that he was moving to San
Diego for work.
“We were on a three-way call with my real estate agent and I said I didn’t
feel comfortable with that,” he says. “The Countrywide guy chuckled and
said, ‘Everyone lies on their mortgage application.’ ”
Instead, Mr. Wallerstein rented a spacious apartment. He also spent a month
studying in the South of France and a month in Prague — all on borrowed
money. There were cost-of-living loans, and tuition of about $33,000 a year.
Later came a $15,000 loan to cover months of studying for the bar.
Today, his best guess is that he should be sending $2,000 to $3,000 a month
in total, to lenders that include Wells Fargo, Citibank and Sallie Mae.
“There are a bunch of others,” he says. “I’m not really good at keeping
records.”
Mr. Wallerstein didn’t know it at the time, but Thomas Jefferson leads the
nation’s law schools in at least one category: 95 percent of students
graduate with debt, the highest rate in the U.S. News rankings.
The reason, Ms. Kransberger says, is that many Thomas Jefferson students are
either immigrants or, like Mr. Wallerstein, the first person in their
family to get a law degree; statistically those are both groups with
generally little or modest means. When Ms. Kransberger meets applicants
engaged in what she calls “magical thinking” about their finances, she
advises them to defer for a year or two until they are on stronger footing.
“But I don’t think you can act as a moral educator,” she says. “Should
we really be saying to students who don’t have family help, ‘No, you
shouldn’t have access to law school’? That’s a tough argument to make.”
It’s an argument complicated by the reality that a small fraction of
graduates are still winning the Big Law sweepstakes. Yes, they tend to hail
from the finest law schools, and have the highest G.P.A.’s. But still.
“Who’s to say to any particular student, ‘You won’t be the one to get
the $160,000-a-year job,’ ” says Steven Greenberger, a dean at the DePaul
College of Law. “I think they should have all the info, and the info should
be accurate, but saying once they know that they shouldn’t be allowed to
come, that’s predicated on the idea that students are really ignorant and
don’t know what is best for them.”
Based on the seething and regret you hear from some law school grads, more
than a few wish that someone had been patronizing enough to say, “Oh no you
don’t.” But it’s often hard to convince students about the potential
downside of law school, says Kimber A. Russell, a 37-year-old graduate of
DePaul, who writes the Shilling Me Softly blog.
“This idea of exceptionalism — I don’t know if it’s a thing with
millennials, or what,” she says, referring to the generation now in its 20s
. “Even if you tell them the bottom has fallen out of the legal market,
they’re all convinced that none of the bad stuff will happen to them. It’s
a serious, life-altering decision, going to law school, and you’re dealing
with a lot of naïve students who have never had jobs, never paid real
bills.”
Graduates who have been far more vigilant about their finances than Mr.
Wallerstein are in trouble. Today, countless J.D.’s are paying their bills
with jobs that have nothing do with the law, and they are losing ground on
their debt every day. Stories are legion of young lawyers enlisting in the
Army or folding pants at Lululemon. Or baby-sitting, like Carly Rosenberg,
of the Brooklyn Law School class of 2009.
“I guess I kind of assumed that someone would hook me up with something,”
she says. She has sent out 15 to 20 résumés a week since March, when she
passed the bar. So far, nothing.
Jason Bohn is earning $33 an hour as a legal temp while strapped to more
than $200,000 in loans, a sizable chunk of which he accumulated during his
time at Columbia University, where he finished both a J.D. and a master’s
degree.
“I grew up a ward of the state of New York, so I don’t have any parents to
call for help,” Mr. Bohn says. “For my sanity, I have to think there is
an end in sight.”
AS a student, Mr. Wallerstein assumed that the very scale of law school —
all the paperwork, all the professors, all the tests — implied that pots of
gold awaited anyone with smarts, charm and a willingness to work hard. He
began to doubt that assumption when the firm where he had interned told him
that it hadn’t been profitable for two years and could not offer him a full
-time job.
Mr. Wallerstein and his fiancée moved back East after graduation, and he
landed a job at a small firm in Queens. He says he was paid $10 an hour and
worked for a manager who seemed to have walked straight out of a Dickens
novel. Over a firm-wide lunch, as Labor Day approached, she asked employees
to thank her, one at a time, for giving them the holiday off.
“When it was my turn, I said, ‘Labor Day is about celebrating the 40-hour
workweek, weekends, that sort of thing,’ ” Mr. Wallerstein recalls. “She
said, ‘Well, workers have that now so you don’t need a day off to
celebrate it.’ ”
He lasted less than a month.
Since then, he has found jobs at temporary projects reviewing documents.The
latest of these gigs is in office space rented on the 11th floor of the
Viacom building in Times Square. He sits in a small, windowless room with
five other lawyers, all clicking through page after page of documents on
computers under fluorescent lights. The walls are bare except for the name
of each lawyer, tacked overhead.
“Welcome to the veal pen,” said one during a tour two weeks ago.
The job is set up through a company called Peak Discovery, which put an ad
on Craigslist, seeking 100 lawyers. “We got about 300 responses overnight,
” said John Thacher, who is managing the project.
Mr. Thacher has managed about 2,500 people in his six years in the temporary
legal business, and maybe five of them have gone on to associate jobs in
law firms, the kind of work that nearly everyone aspires to when entering
law school.
“Most of us either went to the wrong law school, which is the bottom two-
thirds, or we were too old when we graduated,” he said. “I was 32 when I
graduated, and at 32 you’re washed up in this field, in terms of a shot at
the real deal. They perceived me as somebody they can’t indoctrinate into
slave labor and work to death for seven years and then release if they don’
t like you.”
This gets to what might be the ultimate ugly truth about law school: plenty
of those who borrow, study and glad-hand their way into the gated community
of Big Law are miserable soon after they move in. The billable-hour business
model pins them to their desks and devours their free time.
Hence the cliché: law school is a pie-eating contest where the first prize
is more pie.
Law school defenders note that huge swaths of the country lack adequate and
affordable access to lawyers, which suggests that the issue here isn’t
oversupply so much as maldistribution. But when the numbers are crunched,
studies find that most law students need to earn around $65,000 a year to
get the upper hand on their debt.
That kind of money is hard to earn hanging a shingle in rural Ohio or in
public defenders’ offices, the budgets of which are often being cut. As
elusive, and inhospitable, as jobs in Big Law may be, they are one of the
few ways for new grads to keep out of delinquency.
The mismatch of student expectations and likely postgraduate outcomes is
starting to yield some embarrassing headlines. In October, a student at
Boston College Law School made news by posting online an open letter to the
dean, offering to leave the school if he could get his tuition money back.
“With fatherhood impending,” wrote the student, whose name was redacted,
“I go to bed every night terrified of the thought of trying to provide for
my child AND paying off my J.D., and resentful at the thought that I was
convinced to go to law school by empty promises of a fulfilling and
remunerative career.”
After a few years of warnings by concerned professors, the American Bar
Association is now studying whether it should refine the questions in its
surveys in order to get more realistic and useful statistics for the U.S.
News rankings. In mid-December, the organization held a two-day hearing in
Fort Lauderdale, Fla., about the collection of job placement data.
“There is a legitimate question about whether we’re asking for detailed-
enough info and displaying that info for those who use it,” says Bucky
Askew of the bar association. “I think it’s fair to say we’re aware of
the criticism and have a committee working to getting to the bottom of this.”
And what about U.S. News? The editors could, but won’t unilaterally demand
better data from law schools. “Do we have the power to do that? Yes, I
think we do,” said Robert Morse, who oversees the law school rankings. “
But we’d have to create a whole new definition of ‘employed,’ and it
would be awkward if U.S. News imposed that definition by itself. It would be
preferable if the A.B.A. took a leadership role in this.”
Instead of overhauling the rankings, some professors say, the solution may
be to get law schools and the bar association out of the stat-collection
business. Steven Greenberger of DePaul recommends a mandatory warning — a
bit like the labels on cigarette packs — that every student taking the LSAT
, the prelaw standardized test, must read.
“Something like ‘Law school tuition is expensive and here is what the
actual cost will be, the job market is uncertain and you should carefully
consider whether you want to pursue this degree,’ ” he says. “And it
should be made absolutely clear to students, that if they sign up for X
amount of debt, their monthly nut will be X in three years.”
Another approach would be to limit class sizes or the number of new law
schools. But the bar association, which is granted accrediting authority by
the Department of Education, says that it would run afoul of antitrust law
if it imposed such limits.
Today, American law schools are like factories that no force has the power
to slow down — not even the timeless dictates of supply and demand.
Solving the J.D. overabundance problem, according to Professor Henderson,
will have to involve one very drastic measure: a bunch of lower-tier law
schools will need to close. But nobody inside of the legal establishment, he
predicts, has the stomach for that. “Ultimately,” he says, “some public
authority will have to step in because law schools and lawyers are incapable
of policing themselves.”
MR. WALLERSTEIN, for his part, is not complaining. Once you throw in the
intangibles of having a J.D., he says, he is one of law schools’ satisfied
customers.
“It’s a prestige thing,” he says. “I’m an attorney. All of my friends
see me as a person they look up to. They understand I’m in a lot of debt,
but I’ve done something they feel they could never do and the respect and
admiration is important.”
Compared with the life he left four years ago, he has lost ground. That
research position in Newark, he figures, would pay him $60,000 a year now,
with benefits. Instead, he’s vying with a crowd for jobs that pay at rates
just a little higher, but that last only a few weeks at a time, with no
benefits. And he’s a quarter-million dollars in the hole.
Unless, somehow, the debt just goes away. Another of Mr. Wallerstein’s
techniques for remaining cool in a serious financial pickle: believe that
the pickle might somehow disappear.
“Bank bailouts, company bailouts — I don’t know, we’re the generation of
bailouts,” he says in a hallway during a break from his Peak Discovery job
. “And like, this debt of mine is just sort of, it’s a little illusory. I
feel like at some point, I’ll negotiate it away, or they won’t collect it.”
He gives a slight shrug and a smile as he heads back to work. “It could be
worse,” he says. “It’s not like they can put me jail.”
January 8, 2011
Is Law School a Losing Game?
By DAVID SEGAL
IF there is ever a class in how to remain calm while trapped beneath $250,
000 in loans, Michael Wallerstein ought to teach it.
Here he is, sitting one afternoon at a restaurant on the Upper East Side of
Manhattan, a tall, sandy-haired, 27-year-old radiating a kind of surfer-dude
serenity. His secret, if that’s the right word, is to pretty much ignore
all the calls and letters that he receives every day from the dozen or so
creditors now hounding him for cash.
“And I don’t open the e-mail alerts with my credit score,” he adds. “I
can’t look at my credit score any more.”
Mr. Wallerstein, who can’t afford to pay down interest and thus watches the
outstanding loan balance grow, is in roughly the same financial hell as
people who bought more home than they could afford during the real estate
boom. But creditors can’t foreclose on him because he didn’t spend the
money on a house.
He spent it on a law degree. And from every angle, this now looks like a
catastrophic investment.
Well, every angle except one: the view from law schools. To judge from data
that law schools collect, and which is published in the closely parsed U.S.
News and World Report annual rankings, the prospects of young doctors of
jurisprudence are downright rosy.
In reality, and based on every other source of information, Mr. Wallerstein
and a generation of J.D.’s face the grimmest job market in decades. Since
2008, some 15,000 attorney and legal-staff jobs at large firms have vanished
, according to a Northwestern Law study. Associates have been laid off,
partners nudged out the door and recruitment programs have been scaled back
or eliminated.
And with corporations scrutinizing their legal expenses as never before,
more entry-level legal work is now outsourced to contract temporary
employees, both in the United States and in countries like India. It’s
common to hear lawyers fret about the sort of tectonic shift that crushed
the domestic steel industry decades ago.
But improbably enough, law schools have concluded that life for newly minted
grads is getting sweeter, at least by one crucial measure. In 1997, when U.
S. News first published a statistic called “graduates known to be employed
nine months after graduation,” law schools reported an average employment
rate of 84 percent. In the most recent U.S. News rankings, 93 percent of
grads were working — nearly a 10-point jump.
In the Wonderland of these statistics, a remarkable number of law school
grads are not just busy — they are raking it in. Many schools, even those
that have failed to break into the U.S. News top 40, state that the median
starting salary of graduates in the private sector is $160,000. That seems
highly unlikely, given that Harvard and Yale, at the top of the pile, list
the exact same figure.
How do law schools depict a feast amid so much famine?
“Enron-type accounting standards have become the norm,” says William
Henderson of Indiana University, one of many exasperated law professors who
are asking the American Bar Association to overhaul the way law schools
assess themselves. “Every time I look at this data, I feel dirty.”
IT is an open secret, Professor Henderson and others say, that schools
finesse survey information in dozens of ways. And the survey’s guidelines,
which are established not by U.S. News but by the American Bar Association,
in conjunction with an organization called the National Association for Law
Placement, all but invite trimming.
A law grad, for instance, counts as “employed after nine months” even if
he or she has a job that doesn’t require a law degree. Waiting tables at
Applebee’s? You’re employed. Stocking aisles at Home Depot? You’re
working, too.
Number-fudging games are endemic, professors and deans say, because the
fortunes of law schools rise and fall on rankings, with reputations and huge
sums of money hanging in the balance. You may think of law schools as
training grounds for new lawyers, but that is just part of it.
They are also cash cows.
Tuition at even mediocre law schools can cost up to $43,000 a year. Those
huge lecture-hall classes — remember “The Paper Chase”? — keep teaching
costs down. There are no labs or expensive equipment to maintain. So much
money flows into law schools that law professors are among the highest paid
in academia, and law schools that are part of universities often subsidize
the money-losing fields of higher education.
“If you’re a law school and you add 25 kids to your class, that’s a
million dollars, and you don’t even have to hire another teacher,” says
Allen Tanenbaum, a lawyer in Atlanta who led the American Bar Association’s
commission on the impact of the economic crisis on the profession and legal
needs. “That additional income goes straight to the bottom line.”
There were fewer complaints about fudging and subsidizing when legal jobs
were plentiful. But student loans have always been the financial equivalent
of chronic illnesses because there is no legal way to shake them. So the
glut of diplomas, the dearth of jobs and those candy-coated employment
statistics have now yielded a crop of furious young lawyers who say they
mortgaged their future under false pretenses. You can sample their rage, and
their admonitions, on what are known as law school scam blogs, with names
like Shilling Me Softly, Subprime JD and Rose Colored Glasses.
“Avoid this overpriced sewer pit as if your life depended on it,” writes
the anonymous author of the blog Third Tier Reality — a reference to the
second-to-bottom tier of the U.S. News rankings — in a typically
scatological review. “Unless, of course, you think that you will be better
off with $110k-$190k in NON-DISCHARGEABLE debt for a degree that qualifies
you to wait tables at the Battery Park Bar and Lounge.”
But so far, the warnings have been unheeded. Job openings for lawyers have
plunged, but law schools are not dialing back enrollment. About 43,000 J.D.
’s were handed out in 2009, 11 percent more than a decade earlier, and the
number of law schools keeps rising — nine new ones in the last 10 years,
and five more seeking approval to open in the future.
Apparently, there is no shortage of 22-year-olds who think that law school
is the perfect place to wait out a lousy economy and the gasoline that fuels
this system — federally backed student loans — is still widely available.
But the legal market has always been obsessed with academic credentials,
and today, few students except those with strong grade-point averages at top
national and regional schools can expect a come-hither from a deep-pocketed
firm. Nearly everyone else is in for a struggle. Which is why many law
school professors privately are appalled by what they describe as a huge and
continuing transfer of wealth, from students short on cash to richly
salaried academics. Or perhaps this is more like a game of three-card monte,
with law schools flipping the aces and a long line of eager players, most
wagering borrowed cash, in a contest that few of them can win.
And all those losers can remain cash-poor for a long time. “I think the
student loans that kids leave law school with are more scandalous than
payday loans,” says Andrew Morriss, a law professor at the University of
Alabama. “And because it’s so easy to get a student loan, law school
tuition has grossly outpaced the rate of inflation for the last 20 years. It
’s now astonishingly high.”
Like everything else about the law, however, the full picture here is
complicated. Independent surveys find that most law students would enroll
even if they knew that only a tiny number of them would wind up with six-
figure salaries. Nearly all of them, it seems, are convinced that they’re
going to win the ring toss at this carnival and bring home the stuffed bear.
And many students enroll for reasons other than immediate financial returns.
Mr. Wallerstein, for instance, was drawn by the prestige of the degree. He
has no regrets, at least for now, even though he seems doomed to a type of
indentured servitude at least through his 30s.
“Law school might not be worth it for another 10 or 15 years,” he says, “
but the riskier approach always has the bigger payoff.”
True, say Professor Henderson and his allies. But he contends that law
schools — which, let’s not forget, require students to take courses on
disclosure and ethics — have a special moral obligation to tell the truth
about themselves. It’s an obligation that persists, he says, even if
students would sign on the dotted line no matter what.
“You’re beginning your legal education at an institution that is engaging
in the kind of disreputable practices that we would be incredibly
disappointed to discover our graduates engaging in,” he says. “What we
have here is powder keg, and if law schools don’t solve this problem, there
will be a day when the Federal Trade Commission, or some plaintiff’s
lawyer, shows up and says ‘This looks like illegal deception.’”
WHEN he started in 2006, Michael Wallerstein knew little about the Thomas
Jefferson School of Law, other than that it was in San Diego, which seemed
like a fine place to spend three years.
“I looked at schools in Pennsylvania and Long Island,” he says, “but I
thought, why not go somewhere I’ll enjoy?”
Mr. Wallerstein is chatting over lunch one recent afternoon with his fiancé
e, Karin Michonski. She, too, seems unperturbed by his dizzying collection
of i.o.u.’s. Despite those debts, she hopes that he does not wind up in one
of those time-gobbling corporate law jobs.
“We like hanging out together,” she says with a laugh.
If love paid the bills, these two would be debt-free tomorrow. But it doesn
’t, and Mr. Wallerstein has no money in the bank, no assets and — aside
from the occasional job as a legal temp — no wages to garnish. He and Ms.
Michonski live rent-free in a nearby brownstone, in return for keeping an
eye on the elderly man who owns the place.
“Sometimes the banks will threaten to sue,” he says, “but one of the
first things you learn in law school, in civil procedure class, is that it
doesn’t make sense to sue someone who doesn’t have anything.”
He remembers little about the promotional materials the Thomas Jefferson
school sent when he applied in 2006, other than a pamphlet with lots of
promising numbers. That was before the economy crumbled, but the school’s
postgraduate data still looks fabulous, particularly given its spot in the
fourth and bottom tier of U.S. News’s rankings. The most recent survey says
92 percent of Thomas Jefferson grads were employed nine months after they
earned their degrees.
Beth Kransberger, associate dean of student affairs at Thomas Jefferson,
stands by that figure, noting that it includes 25 percent of those graduates
who could not be located, as well as anyone who went on to other graduate
studies — all perfectly kosher under the guidelines.
Like lots of administrators, she defends the figures she gathers and laments
that so many other schools are manipulating results.
“You need to take the high road,” she said. “Schools that are behaving
the most ethically want students who come to law school with their eyes open
.”
Even students with open eyes, though, will have a hard time sleuthing
through the U.S. News rankings. They are based entirely on unaudited surveys
conducted by each law school, using questions devised by the American Bar
Association and the National Association for Law Placement. Given the stakes
and given that the figures are not double-checked by an impartial body,
each school faces exactly the sort of potential conflict of interest lawyers
are trained to howl about.
The surveys themselves have a built-in bias. As many deans acknowledge, the
results are skewed because graduates with high-paying jobs are more likely
to respond than people earning $9 an hour at Radio Shack. (Those who don’t
respond are basically invisible, aside from reducing the overall response
rate of the survey.)
Certain definitions in the surveys seem open to abuse. A person is employed
after nine months, for instance, if he or she is working on Feb. 15. This is
the most competitive category — it counts for about one-seventh of the U.S
. News ranking — and in the upper echelons, it’s not unusual to see claims
of 99 percent and, in a handful of cases, 100 percent employment rates at
nine months.
A number of law schools hire their own graduates, some in hourly temp jobs
that, as it turns out, coincide with the magical date. Last year, for
instance, Georgetown Law sent an e-mail to alums who were “still seeking
employment.” It announced three newly created jobs in admissions, paying $
20 an hour. The jobs just happened to start on Feb. 1 and lasted six weeks.
A spokeswoman for the school said that none of these grads were counted as
“employed” as a result of these hourly jobs. In a lengthy exchange of e-
mails and calls, several different explanations were offered, the oddest of
which came from Gihan Fernando, the assistant dean of career services. He
said in an interview that Georgetown Law had “lost track” of two of the
three alums, even though they were working at the very institution that was
looking for them.
As absurd as the rankings might sound, deans ignore them at their peril, and
those who guide their schools higher up the U.S. News chart are rewarded
with greater alumni donations, better students and jobs at higher-profile
schools.
“When I was a candidate for this job,” said Phillip J. Closius, the dean
of the University of Baltimore School of Law, “I said ‘I can talk for 10
minutes about the fallacies of the U.S. News rankings,’ but nobody wants to
hear about fallacies. There are millions of dollars riding on students’
decisions about where to go to law school, and that creates real
institutional pressures.”
Mr. Closius came from the University of Toledo College of Law, where he
lifted the school to No. 83 from No. 140, he said. Among his strategies:
shifting about 40 students with lower LSAT scores into the part-time program
. Because part-time students didn’t then count in the U.S. News survey —
the rules have since been changed — Toledo’s bar passage rate rose, which
helped its ranking.
“You can call it massaging the data if you want, but I never saw it that
way,” he says. Weaker students wound up with lighter course loads, which
meant that fewer of them flunked out. In his estimation, a dean who pays
attention to the U.S. News rankings isn’t gaming the system; he’s making
the school better.
Unfortunately, he says, not all schools play fair.
Of course, fair play is hardly encouraged. Any institution with the guts to
report, say, a 4 percent drop in postgraduate employment would plunge in the
rankings, leaving the dean to explain a lot of convoluted math, and the
case for unvarnished truth, to a bunch of angry students and alums.
Critics of the rankings often cast the issue in moral terms, but the problem
, as many professors have noted, is structural. A school that does not
aggressively manage its ranking will founder, and because there are no cops
on this beat, there is no downside to creative accounting. In such
circumstances, the numbers are bound to look cheerier, even as the legal
market flat-lines.
“We ought to be doing a better job for our students and spend less time
worrying about whether another school is five spots ahead,” says David N.
Yellen, dean of the Loyola University Chicago School of Law. “But in the
real world you can’t escape from the pressures. We’re all sort of trapped.
I don’t know if anyone is out-and-out lying, but I do know that a lot of
schools are hyping a lot of misleading statistics.”
WHEN Mr. Wallerstein started at Thomas Jefferson, he was in no mood for
austerity. He borrowed so much that before the start of his first semester
he nearly put a down payment on a $350,000 two-bedroom, two-bath condo,
figuring that the investment would earn a profit by the time he graduated.
He was ready to ink the deal until a rep at the mortgage giant Countrywide
asked if his employer at the time — a trade magazine publisher in New
Jersey — would write a letter falsely stating that he was moving to San
Diego for work.
“We were on a three-way call with my real estate agent and I said I didn’t
feel comfortable with that,” he says. “The Countrywide guy chuckled and
said, ‘Everyone lies on their mortgage application.’ ”
Instead, Mr. Wallerstein rented a spacious apartment. He also spent a month
studying in the South of France and a month in Prague — all on borrowed
money. There were cost-of-living loans, and tuition of about $33,000 a year.
Later came a $15,000 loan to cover months of studying for the bar.
Today, his best guess is that he should be sending $2,000 to $3,000 a month
in total, to lenders that include Wells Fargo, Citibank and Sallie Mae.
“There are a bunch of others,” he says. “I’m not really good at keeping
records.”
Mr. Wallerstein didn’t know it at the time, but Thomas Jefferson leads the
nation’s law schools in at least one category: 95 percent of students
graduate with debt, the highest rate in the U.S. News rankings.
The reason, Ms. Kransberger says, is that many Thomas Jefferson students are
either immigrants or, like Mr. Wallerstein, the first person in their
family to get a law degree; statistically those are both groups with
generally little or modest means. When Ms. Kransberger meets applicants
engaged in what she calls “magical thinking” about their finances, she
advises them to defer for a year or two until they are on stronger footing.
“But I don’t think you can act as a moral educator,” she says. “Should
we really be saying to students who don’t have family help, ‘No, you
shouldn’t have access to law school’? That’s a tough argument to make.”
It’s an argument complicated by the reality that a small fraction of
graduates are still winning the Big Law sweepstakes. Yes, they tend to hail
from the finest law schools, and have the highest G.P.A.’s. But still.
“Who’s to say to any particular student, ‘You won’t be the one to get
the $160,000-a-year job,’ ” says Steven Greenberger, a dean at the DePaul
College of Law. “I think they should have all the info, and the info should
be accurate, but saying once they know that they shouldn’t be allowed to
come, that’s predicated on the idea that students are really ignorant and
don’t know what is best for them.”
Based on the seething and regret you hear from some law school grads, more
than a few wish that someone had been patronizing enough to say, “Oh no you
don’t.” But it’s often hard to convince students about the potential
downside of law school, says Kimber A. Russell, a 37-year-old graduate of
DePaul, who writes the Shilling Me Softly blog.
“This idea of exceptionalism — I don’t know if it’s a thing with
millennials, or what,” she says, referring to the generation now in its 20s
. “Even if you tell them the bottom has fallen out of the legal market,
they’re all convinced that none of the bad stuff will happen to them. It’s
a serious, life-altering decision, going to law school, and you’re dealing
with a lot of naïve students who have never had jobs, never paid real
bills.”
Graduates who have been far more vigilant about their finances than Mr.
Wallerstein are in trouble. Today, countless J.D.’s are paying their bills
with jobs that have nothing do with the law, and they are losing ground on
their debt every day. Stories are legion of young lawyers enlisting in the
Army or folding pants at Lululemon. Or baby-sitting, like Carly Rosenberg,
of the Brooklyn Law School class of 2009.
“I guess I kind of assumed that someone would hook me up with something,”
she says. She has sent out 15 to 20 résumés a week since March, when she
passed the bar. So far, nothing.
Jason Bohn is earning $33 an hour as a legal temp while strapped to more
than $200,000 in loans, a sizable chunk of which he accumulated during his
time at Columbia University, where he finished both a J.D. and a master’s
degree.
“I grew up a ward of the state of New York, so I don’t have any parents to
call for help,” Mr. Bohn says. “For my sanity, I have to think there is
an end in sight.”
AS a student, Mr. Wallerstein assumed that the very scale of law school —
all the paperwork, all the professors, all the tests — implied that pots of
gold awaited anyone with smarts, charm and a willingness to work hard. He
began to doubt that assumption when the firm where he had interned told him
that it hadn’t been profitable for two years and could not offer him a full
-time job.
Mr. Wallerstein and his fiancée moved back East after graduation, and he
landed a job at a small firm in Queens. He says he was paid $10 an hour and
worked for a manager who seemed to have walked straight out of a Dickens
novel. Over a firm-wide lunch, as Labor Day approached, she asked employees
to thank her, one at a time, for giving them the holiday off.
“When it was my turn, I said, ‘Labor Day is about celebrating the 40-hour
workweek, weekends, that sort of thing,’ ” Mr. Wallerstein recalls. “She
said, ‘Well, workers have that now so you don’t need a day off to
celebrate it.’ ”
He lasted less than a month.
Since then, he has found jobs at temporary projects reviewing documents.The
latest of these gigs is in office space rented on the 11th floor of the
Viacom building in Times Square. He sits in a small, windowless room with
five other lawyers, all clicking through page after page of documents on
computers under fluorescent lights. The walls are bare except for the name
of each lawyer, tacked overhead.
“Welcome to the veal pen,” said one during a tour two weeks ago.
The job is set up through a company called Peak Discovery, which put an ad
on Craigslist, seeking 100 lawyers. “We got about 300 responses overnight,
” said John Thacher, who is managing the project.
Mr. Thacher has managed about 2,500 people in his six years in the temporary
legal business, and maybe five of them have gone on to associate jobs in
law firms, the kind of work that nearly everyone aspires to when entering
law school.
“Most of us either went to the wrong law school, which is the bottom two-
thirds, or we were too old when we graduated,” he said. “I was 32 when I
graduated, and at 32 you’re washed up in this field, in terms of a shot at
the real deal. They perceived me as somebody they can’t indoctrinate into
slave labor and work to death for seven years and then release if they don’
t like you.”
This gets to what might be the ultimate ugly truth about law school: plenty
of those who borrow, study and glad-hand their way into the gated community
of Big Law are miserable soon after they move in. The billable-hour business
model pins them to their desks and devours their free time.
Hence the cliché: law school is a pie-eating contest where the first prize
is more pie.
Law school defenders note that huge swaths of the country lack adequate and
affordable access to lawyers, which suggests that the issue here isn’t
oversupply so much as maldistribution. But when the numbers are crunched,
studies find that most law students need to earn around $65,000 a year to
get the upper hand on their debt.
That kind of money is hard to earn hanging a shingle in rural Ohio or in
public defenders’ offices, the budgets of which are often being cut. As
elusive, and inhospitable, as jobs in Big Law may be, they are one of the
few ways for new grads to keep out of delinquency.
The mismatch of student expectations and likely postgraduate outcomes is
starting to yield some embarrassing headlines. In October, a student at
Boston College Law School made news by posting online an open letter to the
dean, offering to leave the school if he could get his tuition money back.
“With fatherhood impending,” wrote the student, whose name was redacted,
“I go to bed every night terrified of the thought of trying to provide for
my child AND paying off my J.D., and resentful at the thought that I was
convinced to go to law school by empty promises of a fulfilling and
remunerative career.”
After a few years of warnings by concerned professors, the American Bar
Association is now studying whether it should refine the questions in its
surveys in order to get more realistic and useful statistics for the U.S.
News rankings. In mid-December, the organization held a two-day hearing in
Fort Lauderdale, Fla., about the collection of job placement data.
“There is a legitimate question about whether we’re asking for detailed-
enough info and displaying that info for those who use it,” says Bucky
Askew of the bar association. “I think it’s fair to say we’re aware of
the criticism and have a committee working to getting to the bottom of this.”
And what about U.S. News? The editors could, but won’t unilaterally demand
better data from law schools. “Do we have the power to do that? Yes, I
think we do,” said Robert Morse, who oversees the law school rankings. “
But we’d have to create a whole new definition of ‘employed,’ and it
would be awkward if U.S. News imposed that definition by itself. It would be
preferable if the A.B.A. took a leadership role in this.”
Instead of overhauling the rankings, some professors say, the solution may
be to get law schools and the bar association out of the stat-collection
business. Steven Greenberger of DePaul recommends a mandatory warning — a
bit like the labels on cigarette packs — that every student taking the LSAT
, the prelaw standardized test, must read.
“Something like ‘Law school tuition is expensive and here is what the
actual cost will be, the job market is uncertain and you should carefully
consider whether you want to pursue this degree,’ ” he says. “And it
should be made absolutely clear to students, that if they sign up for X
amount of debt, their monthly nut will be X in three years.”
Another approach would be to limit class sizes or the number of new law
schools. But the bar association, which is granted accrediting authority by
the Department of Education, says that it would run afoul of antitrust law
if it imposed such limits.
Today, American law schools are like factories that no force has the power
to slow down — not even the timeless dictates of supply and demand.
Solving the J.D. overabundance problem, according to Professor Henderson,
will have to involve one very drastic measure: a bunch of lower-tier law
schools will need to close. But nobody inside of the legal establishment, he
predicts, has the stomach for that. “Ultimately,” he says, “some public
authority will have to step in because law schools and lawyers are incapable
of policing themselves.”
MR. WALLERSTEIN, for his part, is not complaining. Once you throw in the
intangibles of having a J.D., he says, he is one of law schools’ satisfied
customers.
“It’s a prestige thing,” he says. “I’m an attorney. All of my friends
see me as a person they look up to. They understand I’m in a lot of debt,
but I’ve done something they feel they could never do and the respect and
admiration is important.”
Compared with the life he left four years ago, he has lost ground. That
research position in Newark, he figures, would pay him $60,000 a year now,
with benefits. Instead, he’s vying with a crowd for jobs that pay at rates
just a little higher, but that last only a few weeks at a time, with no
benefits. And he’s a quarter-million dollars in the hole.
Unless, somehow, the debt just goes away. Another of Mr. Wallerstein’s
techniques for remaining cool in a serious financial pickle: believe that
the pickle might somehow disappear.
“Bank bailouts, company bailouts — I don’t know, we’re the generation of
bailouts,” he says in a hallway during a break from his Peak Discovery job
. “And like, this debt of mine is just sort of, it’s a little illusory. I
feel like at some point, I’ll negotiate it away, or they won’t collect it.”
He gives a slight shrug and a smile as he heads back to work. “It could be
worse,” he says. “It’s not like they can put me jail.”