Are Law Schools that Fudge Employment Stats Breaking Federal Law?

A paper by a newly minted UC Davis School of Law graduate is creating a buzz in legal circles, arguing that law schools that overstate job prospects for their graduates are violating federal law.

Joel Murray, who graduated this spring, writes in a paper posted on the Social Science Research Network that when law schools misrepresent their employment statistics, they’re defying the Federal Trade Commission Act, which prevents unfair or deceptive acts in business.

He wants the commission to begin investigating law schools.

The storyline is becoming increasingly familiar: A recent New York Times article reported that it’s an "open secret" that law schools manipulate the employment statistics they provide to the vaunted U.S. News & World Report.

In the latest U.S. News rankings, for example, law schools reported an average employment rate of 93 percent — nearly 10 percentage points higher than the rate in 1997, the Times reported. That’s despite a study showing 15,000 jobs at large law firms have disappeared since 2008.

And last month, a 2008 graduate of Thomas Jefferson School of Law in San Diego sued the school, contending that it had misrepresented its post-graduation statistics. According to the complaint, plaintiff Anna Alaburda racked up $150,000 in debt and has been unable to find a full-time job as an attorney – even though she graduated with honors.

Murray has watched similar stories unfold at UC Davis. Fellow law students graduated ahead of him, failed to find jobs and are weighed down by hundreds of thousands in debt.

Then last summer, he worked on the U.S. Senate Committee on Health, Education, Labor & Pensions’ investigation into for-profit colleges. Part of the investigation focused on colleges’ deceptive marketing tactics and inflated job-placement rates.

"We would go down to the Senate cafeteria at lunch, and we would talk, and we couldn’t believe how many similarities there were between what the for-profits were doing and what law schools were doing," Murray said in an interview.

Murray wrote his June 7 paper, "Professional Dishonesty: Do U.S. Law Schools That Report False or Misleading Employment Statistics Violate Consumer Protection Laws?" for a class. He sent it to friends and colleagues and posted it on Facebook, Twitter and his website. Law journals and consumer protection advocates took notice.

The Federal Trade Commission doesn’t typically pursue law schools. But Murray argues that when law schools report false or misleading employment statistics – which they have done, in several publicized cases – they are violating the Federal Trade Commission Act’s prohibitions on deceptive practices and false advertising.

"Prospective law students reasonably rely upon a law school’s employment statistics to choose whether to attend a law school, and consequently, reporting false or misleading employment statistics has a material effect on law students," Murray wrote.

One of the main questions is whether the commission has jurisdiction over law schools. The commission claims to have jurisdiction over nonprofits that provide financial benefits to members, so Murray argues: Why not include nonprofit law schools, which compete for customers and sell a product?

Chris Hoofnagle, director of the Berkeley Center for Law & Technology’s information privacy programs, said the idea would still face hurdles.

"At the most basic level, the FTC only has jurisdiction over acts in commerce," Hoofnagle said in an e-mail. "Thus, for-profit educational institutions would be the easiest to reach, but state-run institutions, for both legal and political reasons, are not going to be pursued by the FTC."

A spokeswoman for the commission said the FTC can’t speculate on whether it should launch an investigation, and the commission’s investigations are not public until a complaint is filed.

Murray says his focus on law schools’ employment stats is not about his own personal experience at UC Davis. In fact, he just accepted a position with a firm in Seattle, where he’s studying to pass the bar exam, he said.

It’s about changing the way law schools sell themselves to students.

"My goal with this paper is to raise awareness of this issue and help further the public calls for law schools to clean up their acts and to be transparent and honest with prospective students," he said. "I’m very happy with the education I received from UC Davis. I used the skills and intellectual ability I gained there to write this paper."


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