In the United States, disgruntled
law graduates who have been unable to secure legal jobs have been bringing claims
against their law schools under state consumer laws, which vary from state to
state. Anna Alaburda’s case against the Thomas Jefferson School of Law (TJSL) which
is currently before the San Diego Supreme Court could be more successful than
other cases, as the consumer laws in California are believed to be more
favourable to consumers than consumer laws in other states. Australian law
graduates have been facing similar challenges to their American counterparts,
with an increase in the number of law students graduating and a sluggish legal
recruitment market creating an increasingly desperate situation. Could the
trend of law graduates suing their law schools spread to Australia?
Previous cases in the United States
There have been a number of
previous cases in the United States where law students have claimed their law
school provided misleading statements on employment prospects for their law
graduates. In the 2012 New York Supreme Court case of Alexandra Gimez-Jiminaz, et al v New York Law School, nine
graduates of New York Law School brought a case claiming the entering classes
of 2005-2010 had been misled as by graduate outcome statistics provided by NYLS,
as facts were omitted that would have given prospective students a more accurate
picture of post-graduation employment prospects. The 90% employment outcome
advertised included graduates working in part time jobs and those working in
jobs that did not required law degrees. The damages sought were the sum equal
to “the difference between the alleged inflated tuition they paid because of
the allegedly misleading statements and what they characterise as the “true
value” of a NYLS degree, together with certain expenses incurred”. Many of the
plaintiffs had successfully started their legal careers, including:
1. Alexandra
Gomez-Jimenez who had her own thriving immigration practice;
2. Scott
Tiedke who worked as a legal compliance officer at an investment management
firm;
3. Gergana
Miteva who worked as a contract attorney for some time before finding full time
legal employment; and
4. Geoffrey
Corsideo who worked at a New Jersey law firm.
Justice Schweitzer dismissed the
case, citing the legal principle caveat emptor “buyer beware”, and that
prospective law students are “are a
sophisticated subset of education consumers, capable of sifting through data
and weighing alternatives before making a decision regarding their post college
options”.
Anna Alaburda’s Case
Anna Alaburda is a 37 year old
TJSL graduate who completed her three year Juris Doctor in 2008 and had a student
debt of about $150,000 on graduation. Alaburda struggled to find full time
employment as a lawyer and felt misled by the employment prospect figures she
claimed were decisive to her enrolling in the JD program at TJSL. In 2011 she
filed her initiating application, claiming the TJSL statistics about alumni
employment outcomes were misleading and had been inflated and that she would
not have studied the JD at TJSL if she had known the true statistics. The
matter took until 7 March 2016 to get to the San Diego Superior Court, as the
law school made a number of applications to have the matter dismissed. Alaburda,
who is currently 37 years old, has a student loan debt of about $170,000, as
the interest rate on the loan is 8%.
What is the real issue?
While we can all feel sorry for
Alaburda and her colleagues, the law suit distracts from the real issues.
First, there needs to be some degree of personal responsibility, as people are
not forced to enrol in postgraduate law. Second, there is currently a large
surplus of universities offering undergraduate law and postgraduate law
courses, and the quality of many of these courses is questionable. Steps need
to be taken to prevent even more surplus positions at law schools becoming available
and to ensure all law schools offer a quality education.
1. Ranking
and reputations of law schools
The first thing to note about
Alaburda’s case is her choice of law school. TJSL ranks extremely poorly in
comparison to other universities offering the JD course in the United States.
The law school rankings given to TJSL are so poor that the US News Law Ranking
system do not publish the rankings for TSJL and a number of other poorly
performing universities (presumable to protect themselves from defamation
claims). Students are aware of the ranking and reputation of their law school
prior to enrolling. Students studying law are also aware that it is difficult
to get a job as a lawyer and that not all graduates work as lawyers after completing
their JD. Getting a job as a graduate lawyer in the United States is difficult
and employment rates are far from 100%. For example in 2014, 40% of law
graduates across the United States did not secure a job in the law within 12
months of graduation. While this would include graduates who do not wish to
practice law, this 40% would also include a large number of graduates who want
a legal career.
Similar cases to Ms Alaburda’s
never made it to trial in states like Illinois and Michigan as the judges
managing the cases in those states concluded law students chose to have a legal
education at their own risk. Alaburda would have been aware of the difficulties
of obtaining employment in the law prior to starting her JD. While Alaburda had
solid grades and graduated near the top of her class, even top students would
struggle to get a job after attending a law school with such a low ranking
reputation. Further, while Alaburda has yet to find a full time job in the law,
she failed to make the most of opportunities that arose.
2. Not
taking opportunities
On graduation, Alaburda sent her
resume to 150 law firms. This is not out of the ordinary for a law graduate
given the state of the legal market, though other students take the approach of
quality over quantity of applications. She received several interviews and one
job offer. This is more success than a number of law graduates have. She turned
down the legal job as the salary ($60,000) was less than for non-legal jobs she
had applied for. To me, this is a clear case of a graduate choosing a non-legal
path. I have no sympathy, and neither should the courts, for law graduates who
turn down an offer other law graduates would do anything for, and then later
claim they could not get a legal job. The starting salary for law graduates can
be relatively low, as a law graduate must be trained before they become self-sufficient
and useful. Salaries quickly rise for competent graduates. Alaburda later worked in a series of part
time, temporary legal positions mainly reviewing documents for law firms, found
this work unsatisfactory, could not get a full time position and filed an
initiating application against TJSJ.
3. Realities
of working as a junior lawyer
It is not unusual for junior
lawyers to do copious amount of document review, discovery and due diligence
related work as graduates. The reality of working as a junior lawyer is that
most of the work will be less than exciting, especially when working at a large
law firm, but quickly becomes more engaging as you are trusted with more
complicated legal work and the next generation of graduates take on the more
boring work. Alaburda had a series of part-time document review roles and found
this boring. However, this kind of work is the reality for most law graduates.
Will the trend of law graduates suing their law schools spread to come
to Australia?
Many of the factors leading to
law graduate law suits in the United States are currently present in the
Australian legal market:
1. Increasing
number of law schools offering sub-par courses
The number of law schools
offering undergraduate and postgraduate law has increased significantly in the
past 10 years. In NSW alone, the following law courses were accredited:
·
JD at the University of Sydney (2010);
·
JD at the University of NSW (2009);
·
JD at the University of Technology Sydney (2007);
·
JD at the University of New England (2005);
·
JD at the University of Newcastle (2013);
·
JD at the University of Notre Dame (2006);
·
LLB at the University of Notre Dame (2005);
·
LLB at the Australian Catholic University
(2013); and
·
LLB at the Top Education Institute (2014).
The pattern in other states is
similar. Law schools are easy to establish and tend to be high profit earners
for universities, as they are low cost compared to other degrees. It is not
just the increase in educational institutions offering law courses that is
problematic but the quality of the courses, especially given the significant
expense of postgraduate courses in particular.
2. Increasing
number of law graduates
The increasing number of law
schools and expanding of programs offered by existing law schools has created a
large excess of law graduates. I personally have several issues with the number
of law graduates churned out of law schools. However, growth in the number of
law graduates is unlikely to change, as the Productivity Commission’s Review into
Demand Driven Funding System recommended that law schools’ numbers not be
limited.
3. Increasingly
competitive to get a job as a lawyer
At the same time the number of
law graduates has increased, the legal markets has stagnated and large law
firms that traditionally employed large numbers of graduates have either
reduced or maintained the number of graduates they employ. New entrants into
the legal market, such as LegalVision are offering new opportunities for
graduates, but there is still a significant gap between law graduates wanting
to work as lawyers and positions available.
However, there are a number of
factors that might prevent the spread of law graduate law suits in Australia:
1. Less
financial pressure
Law graduates in the United
States face significant pressure on graduation to begin paying off their
$150,000 loans, which usually have an interest rate of 8%+. Australian students
do not face the same pressures, as a Commonwealth supported undergraduate
combined law student will graduate with a debt of about $50,000 which need only
be repaid in increments once the student has graduated and is earning a
significant amount of money. Australian graduates therefore do not face the
same financial pressures as their counterparts in the United States and are
more likely to be able to survive part time and paralegal work for some time
before securing a full time legal position, not succumbing to the temptation to
accept a higher paying non-legal job. In the United States, graduates face more
pressure to get a high earning job immediately to pay off their loans, even if
the job is non-legal.
2. Less
focus on graduate outcomes during student recruitment
Law schools in Australia are
generally very careful with statistics regarding employment prospects. Students
are normally lured via alumni success stories and a university’s reputation
rather than a focus on statistics. There is also a lack of statistics on law graduate
outcomes available. Graduate Careers Australia undertakes an annual survey of
short term outcomes for graduates 4 months after completion of qualifications (http://www.graduatecareers.com.au/research/researchreports/gradstats/).
These statistics are for all graduates and do not provide university by
university data. A response of “full time employment” includes full time
employment not related to the person’s degree. There is a breakdown by bachelor
degree, and in 2015, 74.1% of law graduates who completed the survey were
engaged in full time work at the time they completed the survey, about 4 months
after the completion of their qualifications.
3. Difficulties
bringing a claim under Australian consumer law
Even if a law graduate did wish
to commence legal action, it would be very difficult to bring successful action
under Schedule 2 to the Competition and Consumer Act 2010, as the lead possible
cause of action being misleading or deceptive conduct (s.18 Australian Consumer
Law) requires the conduct to be “likely to mislead or deceive”. The test
requires the identification of the audience, in this case, relatively
intelligent, well-educated persons considering enrolling in undergraduate or
postgraduate law. It would be difficult to mislead or deceive this target
audience, as potential law students would generally consider several law
schools and be aware of the general reputation and quality of the law school.
The test is objective, so the fact a student was actually mislead or deceived
will not be determinative if the relevant population segment would not have
been misled or deceived.
It is unlikely the trend of law
graduate litigation will spread to Australia. However, if the number of law
graduates continues to increase and the legal graduate market fails to improve,
we could see law graduates take legal action against their law schools in the
future.
