SAN FRANCISCO — Michael D. Lieberman decided to enroll at Southwestern Law School after reading that 97% of its graduates were employed within nine months. He graduated in 2009, passed the bar on his first try but could not find a job as a lawyer. He worked for a while as a software tester, then a technical writer, and now serves as a field representative for an elected official.
Lieberman, who earned his undergraduate degree at UC San Diego, is one of dozens of law graduates across the country who have joined class-action lawsuits, alleging that law schools lured them in with misleading reports of their graduates’ success.
Instead of working in the law, some of the graduates were toiling at hourly jobs in department stores and restaurants and struggling to pay back more than $100,000 in loans used to finance their education. Others were in temporary or part-time legal positions.
Although Lieberman believes his degree may still be a “useful tool,” he and other graduates said the suit was intended to combat “systemic, ongoing fraud prevalent in the legal education industry” that could “leave a generation of law students in dire financial straits,” according to the complaint.
Nearly 20 lawsuits — five of them against California schools — are being litigated at a time of dim employment prospects for lawyers. Much of the work once done by lawyers can now be done more quickly by computers.
Online services have made law libraries largely unnecessary, allowing corporations to do more work in-house. Software has sped the hunt for information needed in discovery and other legal tasks, and Web-based companies offer litigants legal documents and help in filling them out. Even after the economy improves, some experts believe the supply of lawyers will outstrip jobs for years to come.
Although lawyer gluts come and go, “I don’t think any of them rival the situation we are seeing today,” said Joseph Dunn, chief executive of the State Bar of California, which regulates the state’s 230,000 attorneys. “The legal community in all 50 states is being dramatically impacted.”
New and inexperienced lawyers, unable to find jobs at law firms, are opening private practices, potentially putting clients at risk, according to a California bar report issued in February. To confront “serious issues of public protection,” a bar task force has recommended requiring practical experience as a condition of a license. The California Supreme Court would eventually have to approve the new rules.
Legal job hunt
Here are percentages of California law school graduates in 2011 who had found full-time, long-term jobs as lawyers nine months after graduation:
|U. of San Diego||46.9|
|U. of San Francisco||34.2|
Source: American Bar Assn.
Graphics reporting by Scott J. Wilson
Besides Southwestern, alumni have sued San Francisco’s Golden Gate University, the University of San Francisco and San Diego’s Thomas Jefferson and California Western schools of law. Each school charges about $40,000 a year in tuition.
J.R. Parker, a lead lawyer in four of the California cases, said graduate jobs included “literally folding shirts in Macy’s.”
Parker said he found it “galling” that the schools gathered data that showed graduates were ending up in non-legal jobs but omitted that information from what they disclosed to the public — a contention that is in dispute. Job data are a highly influential factor in law school rankings. The suits allege the schools also inflated their graduate earnings, reporting the results of only a carefully selected sample.
Michael C. Sullivan, a lawyer representing the schools, said they provided employment data the same way as other law schools, publishing the figures they were required to report to the American Bar Assn. The ABA has since changed the requirements so that law schools now must disclose how many of their graduates were in jobs that required a law degree or for which one was preferred.
Once complaints reached the ABA, the schools began breaking down the job categories for its graduates. Suddenly, the outlook for prospective students looked less promising.
In advance of the ABA rule changes, Southwestern reported in 2011 that only 52% of the previous year’s graduating class had obtained full-time, permanent jobs for which a law degree was needed or preferred, and that salary figures were based on only 19% of the class, according to the suit.
Sullivan said some law graduates may make only limited job searches. A Thomas Jefferson graduate who sued had turned down a $60,000 law job because she didn’t want to make a long drive for training, he said.
“What I find most ironic is that those individuals advertised themselves to law schools as great critical thinkers,” Sullivan said of the law-grads-turned-litigants. “Now they say they never considered the possibility that employment might include part-time jobs.”
A total of 18 law schools around the country have been sued, and courts in other states have dismissed at least five of the suits, according to Sullivan. In California, which has strong consumer laws, courts have been more receptive. California judges have permitted three of the suits to proceed; two have not yet been heard.
The suits’ success may depend on whether courts decide they should proceed as class actions on behalf of all graduates, rather than the named plaintiffs. They are modeled loosely after a wave of suits against trade and technical schools for allegedly misleading students about the value of their degrees.
“These cases are not easy to bring,” said Ray Gallo, who filed and settled a class action for $40 million against the California Culinary Academy in San Francisco and is consulting in the Thomas Jefferson suit. The law school cases may even be more challenging because “these are by and large higher-quality institutions than these trade schools,” he said.
Already, the scarcity of legal jobs has caused law school applications to plunge. A national study of 2011 law graduates found that only 55% of them had law-related jobs nine months after graduation. Some experts believe bottom-tier law schools will be forced out of business and that even the prestigious schools will begin to limit the sizes of their incoming classes.
Indiana University law professor William D. Henderson, citing census data, said law office jobs peaked in 2004. There were 50,000 more jobs that year than in 2010, he said.
At the same time, some legal services are being outsourced to such places as India, and Internet-based companies are offering consumers relatively inexpensive help navigating litigation.
Still, not everyone shares the dismal outlook. Erwin Chemerinsky, dean of UC Irvine Law School, said his students are finding full-time jobs as lawyers even during this slow economy.
“It is not the same across all law schools when you look at employment prospects,” he said.
Rudy Hasl, dean of the Thomas Jefferson School of Law, said the retirement of baby boomers also would open up jobs.
Both deans said there was huge unmet demand for legal services for the poor and middle class, and the next generation of practitioners might be able to fill that demand. The state bar agrees.
“Across the country, the need for legal services among those who cannot pay or have limited ability to pay has never been higher,” the bar report said.