Are law schools inflating their graduate employment statistics? Students at several schools claim they are. A series of suits is forcing the American Bar Association to re-examine its reporting requirements. Irene Plagianos reports

It didn't take long for Judge Melvin Schweitzer to decide whether New York Law School (NYLS) had deceived its former students.

Last August, nine recent grads sued the school, claiming it had misled them by advertising inflated postgraduate employment statistics – and then left them saddled with huge amounts of debt and scant job prospects.

On 22 March, just 10 days after hearing oral arguments on NYLS's motion to dismiss, the New York State court judge threw out the proposed class action, ruling in essence that if someone is smart enough to go to law school, they're smart enough to know that they can't rely only on what a school says about itself.

But while Schweitzer stopped the suit against NYLS for the moment, he didn't squash the larger debate in the legal profession about the merits of the student's claims.

This debate continues in large part due to the suits filed against NYLS and 13 other law schools by David Anziska and two other Manhattan-based solo practitioners, Jesse Strauss and Frank Raimond.

The trio of young, media-savvy lawyers say that the schools aren't just luring students into their classrooms by manipulating employment stats – they're committing fraud.

According to their own websites and other marketing materials, the schools advertise employment rates of nearly 90% or higher. But Anziska's team maintains that those percentages are deceptive because they include all types of employment, not just full-time legal work, and not just jobs that require a Juris Doctor (JD).

And Anziska's crew says that the data manipulation is intentional – the schools are roping students into paying hundreds of thousands of dollars for a JD with the false promise of a job.

"Plain and simple: what the law schools are doing is disingenuous," says Anziska. "Because of the schools' wilful blindness, a generation of lawyers is drowning in debt."

Not surprisingly, the schools see things differently. Legally, they say, they aren't doing anything wrong. They say they're simply following American Bar Association (ABA) standards in how they disclose their employment data.

The ABA has historically allowed law schools to report their graduates as employed even if they hold part-time and low-salary jobs that don't require a law degree. And because employment information is self-reported, students don't have to let their schools know exactly what they're doing, or how much they're making.

"There's been no allegation that these schools have done anything else, but comply with the ABA guidelines," says Edmund O'Toole, a Venable partner who is defending NYLS as well as Florida Coastal School of Law, another law school that has been sued.

O'Toole asserts that the plaintiffs' team is "using the courts not to indict the schools for their individual behaviour, but to indict the ABA for not being detailed enough in the information it requires."

Judge Schweitzer didn't get into the issue of whether the ABA should strengthen its reporting requirements. Rather, he basically said in his ruling Anziska's clients from NYLS should know better.

"By anyone's definition, reasonable consumers – college graduates – seriously considering law school are a sophisticated subset of education consumers, capable of sifting through data and weighing alternatives before making a decision regarding their post-college options, such as applying for professional school," the judge wrote.

Schweitzer's decision, if upheld, could knock out all similar suits in New York State. Anziska's team plans to appeal, but they also have another 25 pending or planned suits in 11 other states and the District of Columbia.

Meanwhile, the ABA is taking action. Last December, the Association announced that it would require schools to report more detail about the kinds of jobs that their graduates land. The reforms were affirmed in March, as part of a revised accreditation standard.

Anziska and his team may have lost a battle, but the war is far from over. Many people have been questioning the real value of an expensive legal education, especially in a difficult job market with more lawyers than legal jobs.

Over the past few years, there has been a substantial push from a growing number of graduates, professors, legal professionals and even US senators for greater transparency in how law schools report and break down their employment and salary statistics.

"There is no question that a whole generation has gone to law school under fundamentally misleading information – I don't think that's really contestable," says Paul Campos, a professor at the University of Colorado Law School. "What will be the legal consequences is a more complicated question."

(Anziska cites Campos's April 2011 article for The New Republic, called 'How Law Schools Completely Misrepresent Their Numbers', as one inspiration for his suits; he has even attached it to all the complaints.)

Unlike the plaintiffs in his suits, Anziska quickly found employment – at Sidley Austin – after graduating cum laude from the University of Michigan Law School in 2003. Six months later, he jumped to Berger & Montague, a Philadelphia-based class action firm. In 2009, he left to work on a short-lived legal start-up company, then opened his own class action shop.

Last year, Anziska joined forces with Strauss – a former Blank Rome associate he met through an old Sidley Austin pal – who had also moved into class action work. Raimond joined the team last autumn from the New York City Law Department after reading about the pair.

Suing law schools is their first collaboration, and it has garnered substantial attention, including stories in New York, Bloomberg BusinessWeek, and The New York Times.

(They weren't the first to sue a law school over employment stats. Last May, the Los Angeles firm of Miller Barondess filed a suit on behalf of the graduates of Thomas Jefferson School of Law, who claim that the San Diego institution has been putting out misleading job and salary data. That case is proceeding to discovery.)

For Anziska, the smoking gun that proves that schools are fudging their numbers is that graduate employment stats have stayed the same year to year, even during the recession.

"You have this economic crash, but many law schools are still claiming 90% employment rates for the class of 2009, the class of 2008," Anziska says. "[Law schools] say 'It's a recession, why are you blaming us for if there aren't jobs?' Yeah, well, your numbers don't reflect that."

NYLS, for example, has advertised a graduate employment rate between 90% and 92% since 2005. The other schools sued by Anziska's team report similar percentages, which are not disputed by either side. (The US News & Word Report uses, and prints, those numbers as part of its rankings.) What is disputed is whether those numbers are purposefully deceptive.

For each school, the employment rate is an aggregate and may include all kinds of work, not just full-time jobs that require a JD. Whether graduates are hired as an associate at an Am Law 200 firm or as a barista at Starbucks, all of their distinct jobs disappear into a single statistic.

"We want to know how many grads are actually getting full-time permanent employment where a JD is required or preferred," Anziska says. "I don't think that number is over 50%. I think it's never been over 50%."

Anziska says that his intention is to "sue as many schools as possible" with similar claims of fraud. His team is already co-ordinating with firms in other states to handle the bulk of cases filed outside of New York.

What his clients are seeking in all of the cases, Anziska says, is to require independent auditors for law school employment data. They are also seeking partial tuition reimbursement.

The strategy is meant to get the plaintiffs to their goal faster, perhaps with a global settlement, Anziska says. But they'll have to get past a series of motions to dismiss first. And that may not be so easy, as Judge Schweitzer's ruling has shown.

NYLS was high on Anziska's hit list mainly because it is very large, with more than 500 students per class, and very expensive, with tuition running more than $47,000 (£30,000) a year.

While those stats put it in the same league as Harvard Law School, its ranking does not. NYLS clocked in at number 137 on the latest survey from the US News & World Report. "We felt the school is basically like a JD factory," says Anziska. "They're a money-making business, churning out graduates with an average debt of more than $100,000 (£64,000)."

NYLS alumnus Chloe Gilgan, one of the plaintiffs in Anziska's suit, graduated in the top 15% of her class in 2008. She has not found any type of work as a lawyer, and carries a debt of more than $200,000 (£128,000). "But I'm not suing because I didn't find work," she says. "I'm suing because the school lied."

Gilgan says that she applied to NYLS even though she considered it a third-tier school. But she also felt, according to the school's employment data, that she'd find a job if she put in the work.

After securing an internship with The Hague in her second summer, she says she applied for jobs at nearly 100 firms.

Finding no work as a lawyer, she took a seasonal job in a department store just to pay bills, and then found a low-paying gig as a legal assistant that did not require a JD. "I know I graduated at a terrible time for the economy," says Gilgan. "But that's not reflected in the school's employment data."

Gilgan and her co-plaintiffs charge that NYLS committed fraud and negligent misrepresentation – and violated New York State's general business law regarding deceptive acts and practices – by reporting that about 90% of its students had found jobs within nine months after graduating.

They had their first chance to air some of their claims in court when Judge Schweitzer held a hearing on 8 March to consider NYLS's motion to dismiss. Standing before the judge, Venable partner Michael Volpe (an NYLS graduate himself) laid out the reasons to dismiss the complaint.

The plaintiffs' beef, Volpe said, was with the ABA, not with the law schools. He also contended that school administrators never guaranteed law students a job or a specific salary, and that the plaintiffs failed to show that the school's actions caused them harm.

And the students who head to law school are smart – some of them have multiple degrees, he said – so they should be aware of what market conditions are like.

"What this case appears to be is that the plaintiffs just didn't get the job they wanted now, a few months or a couple of years after law school," Volpe said.

Strauss, Anziska's colleague, quickly ran through the plaintiffs' arguments, emphasising that this case was not about which jobs, if any, the plaintiffs had found. "The harm here is that our clients overpaid for a degree that is worth substantially less," he said.

In dismissing the suit, Judge Schweitzer said that the plaintiffs could not blame NYLS for the recession. But he also suggested that NYLS had not provided them with the fullest employment statistics that it could have.

Schweitzer wrote that the plaintiffs decided to attend law school before the "full effects of the [economic] maelstrom hit, and have now turned their disappointment and angst on their law school for not adequately anticipating the possibility of the supervening storm and presenting the most complete job-related data that could possibly have been compiled."

Though Schweitzer's decision was a setback, Anziska points to another case as precedent. Last year, nearly 8,000 students sued the California Culinary Academy in San Francisco, claiming that it misled them about their prospects for securing work after graduation. The school settled, paying tuition reimbursements that totalled more than $40m (£25.5m).

But some observers say that Anziska's suits are different. Brian Tamanaha, a professor at Washington University School of Law and the author of the book Failing Law Schools, says he is sympathetic to the plaintiffs' claims, but he is not sure there is a legal remedy for the law school's practices.

The biggest hurdle may be class certification, Tamanaha and other professors say. Because the plaintiffs naturally have different reasons for entering law school, it may be difficult to group them together.

Brian Leiter, a professor at the University of Chicago Law School, adds that each state's consumer fraud law will also play heavily into whether these cases make it past motions to dismiss and head into discovery.

If most of the schools can show they were complying with the ABA rules, he adds, the cases may not go very far. And the ABA's rules may be about to change. New reporting requirements were approved by the Association's legal education section in March and will go up for a vote before the House of Delegates later this year.

ABA spokesperson Amy Ruroden says the Association will ask schools to report more detailed employment statistics – including how many students find full-time employment in a job that requires or prefers a legal degree. (John O'Brien, chair of the ABA section on legal education, was unavailable for comment.)

"There has been concern in he press and among students" about employment statistics, Ruroden says. "We felt that we needed to be more specific in what we require." But she declined to comment on whether the suits prompted the ABA to amend its rules.

Many professors say the suits by Anziska's crew likely spurred the ABA to act. "The ABA was a somnolent organisation until it had the bejesus scared out of it," says Campos. "There's a nice little irony here – nothing like a lawsuit to concentrate an institution's attention."

For his part, Anziska says: "We're happy the ABA is making some effort to change. But that doesn't remedy our plaintiffs' claims. We're going to keep suing."

A version of this article first appeared in The American Lawyer, an affiliate title of Legal Week.