New York Times, Is Law School a Losing Game?, by David Segal:

[A] generation of J.D.’s face the grimmest job market in decades. Since 2008, some 15,000 attorney and legal-staff jobs at large firms have vanished, according to a Northwestern Law study. Associates have been laid off, partners nudged out the door and recruitment programs have been scaled back or eliminated. …

But improbably enough, law schools have concluded that life for newly minted grads is getting sweeter, at least by one crucial measure. In 1997, when U.S. News first published a statistic called “graduates known to be employed nine months after graduation,” law schools reported an average employment rate of 84%. In the most recent U.S. News rankings, 93% of grads were working — nearly a 10-point jump.

In the Wonderland of these statistics, a remarkable number of law school grads are not just busy — they are raking it in. Many schools, even those that have failed to break into the U.S. News top 40, state that the median starting salary of graduates in the private sector is $160,000. That seems highly unlikely, given that Harvard and Yale, at the top of the pile, list the exact same figure.

How do law schools depict a feast amid so much famine?

“Enron-type accounting standards have become the norm,” says William Henderson of Indiana University, one of many exasperated law professors who are asking the ABA to overhaul the way law schools assess themselves. “Every time I look at this data, I feel dirty.”

It is an open secret, Professor Henderson and others say, that schools finesse survey information in dozens of ways. And the survey’s guidelines, which are established not by U.S. News but by the ABA, in conjunction with an organization called the National Association for Law Placement, all but invite trimming.

A law grad, for instance, counts as “employed after nine months” even if he or she has a job that doesn’t require a law degree. Waiting tables at Applebee’s? You’re employed. Stocking aisles at Home Depot? You’re working, too.

Number-fudging games are endemic, professors and deans say, because the fortunes of law schools rise and fall on rankings, with reputations and huge sums of money hanging in the balance. You may think of law schools as training grounds for new lawyers, but that is just part of it. They are also cash cows.

Tuition at even mediocre law schools can cost up to $43,000 a year. Those huge lecture-hall classes — remember “The Paper Chase”? — keep teaching costs down. There are no labs or expensive equipment to maintain. So much money flows into law schools that law professors are among the highest paid in academia, and law schools that are part of universities often subsidize the money-losing fields of higher education.

“If you’re a law school and you add 25 kids to your class, that’s a million dollars, and you don’t even have to hire another teacher,” says Allen Tanenbaum, a lawyer in Atlanta who led the ABA’s commission on the impact of the economic crisis on the profession and legal needs. “That additional income goes straight to the bottom line.” …

I think the student loans that kids leave law school with are more scandalous than payday loans,” says Andrew Morriss, a law professor at the University of Alabama. …

[Henderson:] “What we have here is powder keg, and if law schools don’t solve this problem, there will be a day when the Federal Trade Commission, or some plaintiff’s lawyer, shows up and says ‘This looks like illegal deception.’” …

(Hat Tip: Brad Mank, Ann Murphy, Michael Talbert.)