Underemployed Cooley Law grads lose the war, but win the battle

July 30, 2013

Jesse Strauss of Strauss Law had two goals when he filed a fraud suit on behalf of 12 graduates of Thomas M. Cooley Law School. The first was to win compensation for the Cooley grads, who had paid tens of thousands of dollars of tuition in the misguided expectation that a Cooley law degree would lead to a full-time legal career. The second, he told me, was to dispel similar misguided expectations by anyone else considering enrollment at Cooley. A ruling Tuesday by the 6th Circuit Court of Appeals will probably spell the end of the hope that Cooley graduates can get any of their money back from the school, but it should also expose the law school as a highly questionable investment for prospective lawyers.

“Based on my clients’ reactions, everyone is proud of their involvement in this suit,” Strauss said. “We’ve done real justice.”

The Cooley suit, like 14 other class actions Strauss and co-counsel have filed against law schools that purportedly misrepresented employment and salary data about their graduates, claimed that the school deceived prospective students about their future job prospects. In reporting on the job status of its graduates, the grads alleged, Cooley failed to distinguish between those with legal careers and those with other kinds of jobs; a graduate working at Starbucks, for instance, would be counted in Cooley’s survey as employed in business. The school also claimed that its salary data was an average of all graduates’ incomes, but as the 6th Circuit noted, the reported number was actually an average of the salaries of graduates who responded to the law school’s survey.

The 6th Circuit panel – Judges Boyce Martin and Deborah Cook and U.S. District Judge James Graham, sitting by designation – did not dispute the Cooley students’ allegations, but nevertheless agreed with the district court that they do not have a cause of action. They can’t make claims under Michigan consumer laws because they bought their business education for the business purpose of attaining a full-time legal job. And they can’t make fraudulent misrepresentation claims because Cooley’s report on the percentage of graduates with jobs is not objectively false. The graduates also couldn’t show that they reasonably relied on Cooley’s statements, according to the 6th Circuit.

But the opinion, written by Judge Martin, is unstinting about the career prospects of Cooley graduates, which it describes as “dismal.” The 6th Circuit outlines the school’s loose admissions standards – the lowest in the country, with an acceptance rate 15 percent higher than the second-least selective law school – and high drop-out rates. Cooley enrolls 4,000 students at the school’s four campuses in Michigan (with another 700-student satellite campus planned for Florida) and charges full-timers $36,750 a year in tuition. According to the 6th Circuit, Cooley’s dean is one of the highest-paid law school deans in the country, earning more than $500,000 a year in 2008 and 2009 – almost ten times the average graduate salary Cooley reported

The careers of the 12 alumni in the case, as recounted by the 6th Circuit, are a caution to anyone contemplating Cooley’s tuition. The graduates are burdened with an average of $105,798 in debt, but none of them found full-time jobs as lawyers within nine months of graduating. A couple of the Cooley plaintiffs have since been employed by law firms. The others have either opened their own shops or forsaken legal careers altogether. One is a substitute teacher who moonlights as a day laborer on golf courses. Another manages telephone book deliveries and yet another is unemployed.

Those are sobering stories, and Strauss told me he hopes the improved transparency about the value of a Cooley law degree has an effect. His clients, he said, are contemplating a motion for en banc review at the 6th Circuit, but were discouraged that Judge Martin, whom Strauss regards highly, sided against the Cooley grads. “Courts just don’t want to grapple with these issues,” he told me. “Judges are successful lawyers. They tend to have faith that the ABA will deal with these things.”

Strauss said that although many of the class actions he’s brought on behalf of disenchanted law students have ended in dismissal, three cases, including California state court suits against Golden Gate University School of Law and University of San Francisco School of Law, have survived and are proceeding to class certification motions. Strauss’s suit against his own alma mater, Brooklyn Law School, was tossed in April.

Cooley’s general counsel, James Thelen, disputed the plaintiffs’ characterization of the value of a Cooley degree. The school’s mission, he told me, is to make law school accessible to people who want to become lawyers but might not meet the standards of more selective institutions. He said the school believes there’s plenty of demand for lawyers, if not at large firms serving corporate clients then at smaller shops with a different clientele. Thelen said that the 6th Circuit’s description of the “dismal” prospects of Cooley graduates is not a legal finding, but is based on unproven allegations from the plaintiffs’ complaint. As for Cooley’s reporting, Thelen said the school has always comported with the ABA’s guidelines because it is an accredited institution. When the ABA recently changed reporting standards, so did Cooley. He also said that the school’s applications and enrolment have declined along the nationwide trend. “I don’t think the allegations in this case have affected our enrolment directly,” Thelen said.

I asked the Cooley GC whether it was fair to offer admission to students without a realistic hope of paying off their loans through full-time law-related jobs. Thelen agreed that that’s a philosophical question all law schools – and not just Cooley – are going to have to confront. “To some extent, we are handcuffed by what we have to do to be accredited,” he said. Perhaps the solution, Thelen added, will be for the ABA to create a tier system of accreditation.

Cooley GC Thelen got his law degree from Tulane. The school’s outside counsel in the class action was Michael Coakley of Miller Canfield, a Michigan Law grad whose firm does, in fact, employ a small number of Cooley alums.

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