For the first time, a law graduate’s suit against her law school is proceeding to trial this week.
After the financial crisis and economic collapse of 2007-2010, many law graduates were unable to find gainful employment as the legal industry experienced its worst downturn in generations – possibly the worst in history. Law firms stopped hiring, and they laid off thousands of associates. Governments slashed their administrative budgets. And funding for legal services and nonprofits dried up. This created what has become a “lost generation” of attorneys who racked up $100,000-$200,000 in student loan debt but have not been able to find viable employment.
Despite the economic downturn in the legal profession, many law schools continued to report rosy job figures in their advertising and marketing materials to justify high tuition and fees. Because of lax oversight and ambiguous regulatory requirements, schools could tell prospective law students that the vast majority of their graduates got jobs – even if those jobs were temporary, part-time, low-paying, or not law-related.
Law graduates filed lawsuits against their schools for misrepresenting job placement figures. However, most of these lawsuits were dismissed on the basis that students enrolled in law school at their own risk, and they either knew or should have known that there were no guaranteed results. Judges concluded that law students tend to be smart people, and they should know that a law degree is not necessarily a ticket to success.
At least one of those lawsuits has survived dismissal, however, and is heading to trial.
Anna Alaburda racked up $150,000 in student loans to attend the Thomas Jefferson School of Law. She graduated near the top of her class, passed the state bar exam, and sent her resume out to more than 150 law firms, but she claims that she was unable to find gainful legal employment. Instead, she has been working for nearly a decade doing temporary, low-paying document review projects. Meanwhile, she says, her law school boasted a 92.1% full-time job placement rate in 2011, which was during the worst of the legal job crisis – and an actual increase from 2006-2007, when the legal job market was doing quite well. Ms. Alaburda argues that these figures were inflated and misleading because they included any full-time job – an associate position at a prestigious law firm, or, say, a sales associate position at a retail store. She claims that she would not have enrolled at Thomas Jefferson had she known that the job statistics were misleading.
According to The New York Times, “Law schools labor to keep their employment data at the highest percentage level because it is a major factor in national law school rankings, which in turn give schools the credibility to charge six figures for a three-year legal education.” Since the economic crisis, the American Bar Association has tightened its regulations over how law schools report job data, requiring schools to be more precise in providing job placement statistics.
Nevertheless, it will be interesting to see how this trial plays out. A ruling against Ms. Alaburda in California, a state with some of the strongest consumer protection laws, could be the nail in the coffin for claims against law schools (and possibly other professional schools) for deceptive business practices. And in my opinion, the facts in this particular case may not be incredibly strong – the school is arguing that Ms. Alaburda turned down a decent-paying law firm job offer after graduation, which could severely undercut her arguments.
On the other hand, a ruling for Ms. Alaburda could have a wide range of possible implications – it could be just a blip on the radar, or it could provide a basis for keeping ajar the mostly-closed door for legal relief for similarly affected law school graduates in the future.