ABA report on law schools' graduate jobs data reporting

By Karen Sloan, that first appeared in The National Law Journal.

The American Bar Association is changing the way it collects graduate employment information from law schools.  The council of the Section of Legal Education and Admissions to the Bar on Dec. 3 (2011) approved a new annual questionnaire intended to gather more detailed information about where recent law grads find work.  The change came as law students, graduates and three U.S. senators heaped criticism on the ABA and law schools for not providing prospective law students with an accurate picture of graduate employment and salary levels.  "The section is fully committed to clarity and accuracy of law school placement data," said John O'Brien, dean of New England School of Law and chairman of the section. "As a result of these changes, future law students will be better informed about their prospects than ever before."

The updated questionnaire contains several new elements:

• Law schools will report their graduate employment and salary data directly to the ABA, rather than through the National Association of Law Placement.

• Graduate employment information will be made available to the public faster. Instead of being published two years after a particular class graduates, the data will be collected earlier in the year and will be made public approximately one year after graduation.

• Law schools will have to report whether graduates are in jobs funded by the schools, themselves. They will have to stipulate whether graduates are in jobs requiring bar passage; positions for which J.D.s are an advantage; professional positions that do not require a J.D.; non-professional positions; and whether jobs are long-term or short-term.

• Employment and salary information must be reported for each individual graduate rather than in the aggregate, giving the ABA the ability to audit the figures.

The new questionnaire does not include all the changes that transparency advocates have been pushing for. Law School Transparency — a nonprofit organization that seeks to improve consumer data for law students — has called upon the ABA to publish school-specific salary data. That would allow prospective law students to see how much graduates of each school earn.

As with the old questionnaire, job and salary data will not be reported together and school-specific salary data will not be released publicly. Instead, each school will report the three states in which the largest number of its graduates finds jobs.  Prospective students won't be able to see the average salary for graduates who take government jobs. The ABA plans to make salary information available based on job type and state, said ABA consultant for legal education Hulett "Bucky" Askew, but those numbers will be not be broken down by law school.  School-specific salary data may yet be made available to the public under a different proposal being considered by the ABA's Standards Review Committee, which is evaluating all of the ABA's law school accreditation standards, Askew said.

The new questionnaire is an improvement, said Law School Transparency co-founder Kyle McEntee.  But the ABA made a mistake by temporarily eliminating some key questions from the 2011 survey, which went out to law schools this fall, he said.  That questionnaire did not ask schools to report the number of graduates in the class of 2010 in full- and part-time jobs or in jobs that require a J.D., meaning that less information will be available about the class of 2010 than for previous classes.  Members of the questionnaire committee said they needed more time to refine the definitions of those job categories. The updated definitions were incorporated into the new questionnaire.  "There are still questions about [the changes] took so long and why it still falls short of providing the best consumer information," McEntee said.

Contact Karen Sloan at ksloan@alm.com

Employees now own Mestel's legal staffing empire

by Julie Triedman.  November 01, 2011.

For associates, equity partnership remains the gold ring that motivates many young lawyers to endure a years-long grind. Now, temporary attorneys who have been slogging away at document review in firm basements and off-site annexes are finally getting their chance at that prize, too.

In August, Mestel & Company, one of the largest legal staffing and lateral placement firms in the country, announced that it had been turned over to its employees under an employee stock ownership plan, or ESOP. The impact is potentially far-reaching: Mestel & Company manages a network of more than 50,000 temporary attorneys and legal staff from 22 offices across the country.

Founder and president Lynn Mestel says that any permanent or temporary employee is eligible to be vested in company stock after completing 1,000 hours of work in a calendar year—a benchmark that many of her temps, whom she calls "contractors," regularly surpass. While she won't say how many have already qualified for stock, she says that "thousands" filed W-2 forms with her company's temporary legal staffing unit, Hire Counsel, in 2011 alone, and roughly one in ten were eligible as of August 22, the date the ESOP plan came into effect.

On a recent afternoon, the 58-year-old Mestel, a onetime Benjamin N. Cardozo School of Law graduate, explained how the idea took shape in early 2010. One of her chief concerns was her legacy. "I was thinking about longevity. My goal was never to sell it, to dump it and leave," she says. Mestel founded the recruiting business a quarter-century ago, and the temp business a few years later. The conjoined businesses, which have tripled in size in the past five years, are now a national partner-placement and staffing behemoth.

As she was pondering the fate of her company, Mestel looked at studies that showed that companies with employee stock ownership plans generally perform better over time than non–ESOP companies (with some notable exceptions—Enron Corporation, WorldCom, Inc., and Adelphia Inc. all had ESOPs). Mestel felt that employees would be as inspired as she's been if given a stake in the business. "It's a tremendous motivator for the contractors to continue to deliver their best work," she says. In the end, financial considerations helped crystallize her decision. "My question was simple: Do I want to give 30 percent to the federal government or to my employees?" Under federal law, businesses that are 100 percent employee-owned via an ESOP pay no federal taxes on earnings.

ESOP equity ownership differs from law firm partnership in one major respect: An ESOP is a passive stake in the success of the business. Unlike a partnership, an ESOP doesn't allow employees to participate in management decisions or strategies. It is run much like a 401(k) retirement account, via a trust.

And even if the company remains as profitable as its recent growth suggests, temps will have to wait several years to see profits accumulate in their ESOP accounts. That's because earnings initially go to pay down the bank and the private investors who lent the money to the ESOP trust that bought out the equity of its founder. Mestel says she remains a major investor. How much has she invested? She won't say.

Adecco boosts third quarter profit 13 per cent

"GENEVA - The world's biggest temporary staffing group Adecco said Tuesday its third quarter profit rose 13 per cent to 145 million euros (S$252 million) and forecast a strong performance for the rest of the year.

The results, which were in line with analysts' expectations, were built on a four per cent increase in revenues to 5.27 billion euros for the three months ending September.

Adecco said it expected "another strong performance in the fourth quarter and remains absolutely confident it will achieve its target profit margin of above 5.5 per cent in the medium term".

France, Adecco's biggest market, posted a seven per cent growth in revenues to 1.6 billion euros while the United States saw a five per cent rise to 903 million euros, the company said."

from news services...