We’re still waiting to see if the lawsuits marshaled against law schools over their questionable employment statistics will have any effect. Obviously schools are misleading people about the employment outcomes of recent graduates — notice that the law schools aren’t even arguing that they give students an accurate picture. They just say their numbers shenanigans conform to the pathetic guidance laid down by the American Bar Association. But it’s still an open question whether this employment obfuscation will be legally actionable.
Basically, nobody cares if law schools lie to potential students.
But if the credit ratings agencies feel they’ve been lied to, that might be a whole different kind of problem…
Inside Higher Education reports that Moody’s has just noticed that misleading consumers might not be the best business move for law schools:
Moody’s Investors Service said this week that a class action filed against 12 law schools last week could endanger those schools’ financial positions, since they rely overwhelmingly on tuition revenue, and a lawsuit alleging that a school inflated graduation and employment statistics is not a strong selling point for attracting students.
Take a step back for a second: remember that we are talking about institutions of higher learning that are trying to trick people into attending. This isn’t about whether or not law students are “entitled’ to a job post graduation. This is about whether or not law schools have an obligation to give people the facts, all the facts, before people might spend or borrow over $100,000 to pursue the degree.
Clearly, neither law schools nor the ABA feels they are under any moral obligation to be transparent. It’s highly questionable whether or not the schools are under any legal obligation. But maybe they have a financial obligation in the open marketplace?
Of course, the entire outlook from Moody’s seems dependent on whether prospective law students avoid schools that have been sued like the plague. But we’ve seen over time that prospective law students don’t do a very good job at researching relevant facts before committing to law school. I can just hear a law dean on the phone with a Moody’s researcher saying: “No, you don’t understand, our business model is based on our students being too stupid to understand facts available on the internet, much less the complications of an actual lawsuit. Yeah, I know, it’s wild, we make unemployable lawyers out of people too dumb to research basic evidence, and we make a killing doing so.”
Report: Suit Against Law Schools Not Good For Business [Inside Higher Education]