HUFFINGTON POST
08/10/2011 10:15 pm ET Updated Oct 10, 2011

Graduates accuse law schools of scamming students

NEW YORK (Reuters) - Facing a stagnant job market, law graduates from New York and Michigan schools on Wednesday accused their alma maters of duping graduates out of hundreds of thousands of dollars in tuition by publishing misleading post-graduation employment and salary statistics.

The two class-action suits were filed by graduates of New York Law School in lower Manhattan and Thomas M. Cooley Law School in Lansing, Michigan, amid growing scrutiny over whether law schools across the country are deliberately concealing the truth about their graduates' employment and salary in order to enroll more students despite their dismal job prospects.

Among the tactics allegedly employed by the schools were misclassifying graduates with temporary or part-time jobs as "fully" employed, omitting information about graduates who didn't respond to employment surveys, and creating post-graduate job programs to hire their own graduates.

"The law school industry today is much like a game of three-card monte, with law schools flipping over ace after ace, while a phalanx of non-suspecting players wager mostly borrowed money based on asymmetrical information on a game few of them can win," according to the New York lawsuit.

"These claims are without merit," Richard Matasar, the dean and president of New York Law School, said in a statement.

James Thelan, the associate dean for legal affairs and general counsel at Thomas Cooley, called the claims baseless.

'STATISTICS DELIBERATELY FUDGED'

According to the suits, both schools enroll large classes each year and charge around $100,000 for a law degree. While both boast employment rates of 80 percent or better within 9 months of graduation, those statistics are deliberately fudged to make it seem like all of the jobs are in the legal field, plaintiffs said.

"We are bringing these lawsuits because thousands of young lawyers, like the plaintiffs, struggle to purchase a home, raise a family and make investments because they leveraged their future to a law school based on inaccurate information," said Jesse Strauss, a partner at Kurzon Strauss representing the plaintiffs. "It is time for the legal academy to own up to this problem."

The Cooley plaintiffs are seeking $250 million in damages and the New York Law School graduates are asking for $200 million in tuition refunds for a proposed class of recent graduates. Both suits are asking a court to force the schools to be more transparent in how they report post-graduate job and salary information.

But if they want their money back, the students may face an uphill battle.

They would have to prove the school intentionally misled them, according to Larry Ribstein, associate dean of research at the University of Illinois School of Law.

The court also may inquire whether the students' understanding of their post-graduation chances of obtaining a job in the legal field was the deciding factor to attend the school, Ribstein said.

"There are a lot of questions about when a lie, or failure to disclose everything a customer might want to know, sinks to the level of being a lie, or rises to the level of triggering a fraud action," Ribstein said.

"Whether law schools have some responsibility to disclose the information -- that's a separate issue," he said.

The New York and Michigan law-school graduates aren't the first to take their schools to task for allegedly breaking promises. In May, a similar lawsuit was filed by graduates of Thomas Jefferson School of Law in San Diego, demanding more transparent post-graduation data from their school.

In October, a third-year student at Boston College Law School posted an anonymous open letter to the school's dean offering to drop out in exchange for a tuition refund.

Earlier this year, Sen. Barbara Boxer, a California Democrat, and Sen. Charles Grassley, a Republican from Iowa, each wrote to the president of the American Bar Association, asking the organization to increase its scrutiny of law schools across the country.

On Monday, the American Bar Association's 566-member House of Delegates adopted two resolutions related to legal education. The first is designed to help graduates better manage the average $100,000 debt they accumulate at school. The second encourages law schools to report employment data in a way that more accurately reflects how many graduates find law-related jobs.

(Reporting by Jessica Dye. Edited by Peter Bohan)