Monday, April 29, 2013

Law School Dean Compares Lying to U.S. News to Enron Fraud

Dean Nancy Rapoport has just posted an article on SSRN that compares lying to U.S. News to the Enron case. 

Managing U.S. News & World Report-the Enron Way

Abstract: "This essay suggests that lying about the numbers that schools report to US News is no better than the lying that Enron did about its various methods of 'earnings management.' It also suggests that administrators - being humans - can talk themselves into lying about the numbers for all sorts of (very bad) reasons."

Some excerpts:

"With so many examples of 'schools gone wild,' it’s difficult for law deans and law faculties to tell their students that lawyers shouldn’t lie. The law schools that have misstated their stats are sending the message that lawyers shouldn’t lie, unless: (1) lying will make their lives easier; (2) verifying the facts is too much trouble; or (3) the likelihood of getting caught—and punished—is low. That’s not the message that we should be sending. So why do law schools misrepresent their stats to U.S. News?"

"But what I want to discuss is the ease with which people can find themselves caught in a lie and how our lies affect what we’re trying to teach our law students."

"Cognitive dissonance (the subconscious rationalization of two competing moral views) is easy to spot in fudging the rankings. Someone who thinks of herself as honest and who still, say, plays with her school’s placement figures to make them look better than they really are is subconsciously justifying her 'creativity' by deciding that U.S. News’s questions are so bogus that she shouldn’t have to take them seriously. If she’s not sure that her answers are accurate, she can always assume that someone else will catch her mistake (diffusion of authority). She can reason that, because other schools are hiding their bad placement numbers by hiring their own graduates, her school should do the same (social pressure). When schools let the U.S. News rankings drive their own admissions decisions (e.g., preferring LSATs over work experienceor "striving") or scholarship awards (buying higher LSATs with full rides plus stipends)—or when schools set the size of their entering classes and transfers solely to keep their LSATs and UGPAs high—those decisions are all perfect examples of anchoring bias (letting the rankings drive all other decisions)."

"When we lie, we’re telling our students and alumni that it’s ok for them to lie, too."

"'Rankings management' just reminds me too much of the 'earnings management' that I followed when I devoured every news article out there about the Enron scandal. I know that Enron is ancient history by now to most people. It’s not ancient history to me and to many of my friends who lived through the experience in Houston, in Portland, and elsewhere. But one key factor of Enron’s collapse strikes me as relevant today."

"But cheating at the rankings also imprints a school’s students and graduates. The same administration that is stressing adherence to an honor code and the importance of professionalism and ethics may be the one 'construing' its answers and developing very delicate loopholes. Bad LSATs? Move those students to the part-time program! Part-time program LSATs now being counted in the rankings? Cut the entering class and admit lots of transfers! Placement low? Hire graduates as research assistants, unless they’re not good enough to do that type of work (in which case, hire them to do filing)!"

"But it’s also important for us to remember that we—administrators and law professors—are modeling the behavior that we want our students to adopt. Whether we like it or not, we’re role models. Therefore, what we’re actually teaching our students when we fudge is that a zealous advocate stops at nothing to achieve her client’s objectives, even when those objectives aren’t very worthwhile. Once we teach our students that, we’ve created another generation of liars. No ranking is worth that."

(Scott Fruehwald

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