‘Bar application denied for inability to pay law school debt’

It sounds horrible, and it almost is.

A former student directs me to this article in the Minnesota Lawyer, Bar application denied for inability to pay law school debt, which in turn leads one to the Ohio Supreme Court opinion in In re Application of Griffin, Slip Opinion No. 2011-Ohio-20.

The facts are almost as stated in the hyperventilating article: The applicant failed the bar three times, and applied to take it a fourth time. He passed the character and fitness scrutiny of his local bar association (often a formality), but the Board of Commissioners of Character and Fitness overruled that decision. The Board said that the applicant’s financial circumstances called into question his fitness to be a lawyer.

What seems to have bothered the Board is not simply the applicant’s debt but his failure to deal with it responsibly. Mr. Griffin had a large but hardly unheard-of $170,000 in student loans, of which $150,000 was for law school. But he also had $16,500 in credit card debt, and that debt has been delinquent since 2008; one creditor even has obtained a default judgment against him. He was working part-time at the Public Defenders Office, at $12/hour, hoping to land a full-time job if he passed the bar. Meanwhile, the credit card debt wasn’t being paid, and the strategy he planned was to consider declaring bankruptcy even though that would only clear up the credit card debt and not the student loans, which are not discharged in bankruptcy. That said, he hadn’t actually pulled the trigger on the bankruptcy, so the debt was still hanging over him and presumably accruing penalties and interest.

The article spins all this as the court deciding that law school debt keeps the applicant from becoming a lawyer, or that his decision to work part time at legal aid (in hopes of a permanent post after passing the bar) instead of getting a better paying, maybe non-legal, job, is the source of the adverse decision. How terrible to count this public-spiritedness against him!

Not so fast. The guy defaulted on the credit card debt two or more years ago. He didn’t work things out with the bank; he let one bank get a judgment against him. Lawyers quite often get into trouble by mishandling client funds either through inattention or through over-optimism that if they just borrow a bit from the client fund to tide them over, they can put it all back next week…. So while I don’t see this result as compelled, I can’t say the court is wrong to treat the credit card debt issue as a red flag. (The three bar failures don’t speak all that well for his organization either. Anyone can fail the bar once. Twice is bad.)

And note too that the Ohio Supreme Court doesn’t say Mr. Griffin can never attempt the Ohio bar again. They basically tell him to go clean up his affairs and then get back to them. That’s pretty mild.

Yes, passing the bar and getting a full time job as a lawyer would be one way to do that, and this decision blocks that option, so there is a Catch-22 element to the court’s offer. But I still don’t think it is unreasonable under the circumstances. Despite the Minnesota Lawyer’s take on the story.

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12 Responses to ‘Bar application denied for inability to pay law school debt’

  1. anon says:

    So what do penalties and interests matter if you are going to declare bankruptcy. At that point, it’s a timing issue only unless I misunderstand something. Bankruptcy discharges the judgment. No money means no ability to pay so what was he supposed to do? Let him fail the fourth time if he wants after all they let him run up 170k in non-dischargeable debt even though I am sure it was obvious to his professors that the situation was pretty dismal.

    • The point, I would guess, is that the court fears that letting matters get to the point of having a judgment against you is a red flag, particularly as there are often ways to work out a repayment plan if you grab the bull by the horns. Leaving it hanging without actually filing for bankruptcy is also a possible issue — note that he hasn’t actually filed yet. It is hard to say the Court is wrong.

  2. Tyler says:

    They guy in the story used to be a stockbroker and gave that up to go to law school. Like me, he’s a member of the lost generation – lawyers who graduated between 2009 and some point in the future. Here’s what pisses me off about the court’s opinion:

    “We accept the board’s findings of fact and conclude that the applicant has neglected his personal financial obligations by electing to maintain his part-time employment with the Public Defender’s Office in the hope that it will lead to a full-time position upon passage of the bar exam, rather than seeking full-time employment, which he acknowledges would give him a better opportunity to pay his obligations and possibly qualify him for an additional deferment of his student-loan obligation.”

    First, seeking full-time in this environment is useless. If he sends out 400 resumes, cover letters and writing samples, he’ll spend over $1,000 on postage – money that he clearly doesn’t have. (by the way, i’ve sent out upwards of 600 resumes in the last 9 months and have exactly zero interviews to show for it. this despite being on law review and top 15% of the class at UM).

    Second, and more importantly, who the hell are these judges to tell him what kind of lawye he has to be? Maybe he likes being a public defender. Maybe he gave up his stockbroker job to do something that doesn’t bleed him of his will to live. Essentially, the court is telling this guy that he shouldn’t have given up his other career and that he should probably go back to it. Some people seem unable to understand that there are people out there who aren’t completely motivated by money and who are willing to forego a lucrative career for one that is rewarding in other ways.

    Third, as for the credit card debt, given the timing, it seems highly likely that he ran that up while in law school, not before. This isn’t some pre-existing debt that he was disregarding. It was probably debt he accumulated while trying to find a way to pay for tuition and cost of living while he was “clerking” (read: laboring for free) at a firm that was capitalizing on the market.

    Fourth, as far as him waiting for a full time position to open up, don’t the judges realize that this has become extremely, extremely common these days? No one can get jobs, so they hang on to any glimmer of actual full time employment. If he quit the job and did something non-legal, he would be cut out of the loop and unable to get legal work in future, because people who run firms seem to believe that not being immersed in law on a constant basis means you lose your legal skills and analytical abilities.

    Law isn’t special. Anyone with enough patience to slog through a mountain of poorly written jargon can become a lawyer. Let’s not confuse it with a field that requires actual talent.

  3. Tyler says:

    AND, if the Ohio Bar is so concerned about Griffin’s career choices and his ability to pay for his legal education, then why don’t they try giving a shit BEFORE the man signed up to go to law school in the first place? Why don’t they force Moritz to put up a warning on its website that reads: “WARNING: Inability to pay off our ridiculous tuition in the middle of a recession could result in a character and fitness failure.” The Ohio bar reminds me of those people who care more about what happens after people die than what happens while people are alive.

    His debt has nothing to do with his character. There is nothing to suggest that he could pay off his debts with his current income but is choosing not to. He’s not sitting around smoking a bong and playing Xbox instead of finding a job. All that’s happening is that this man has decided to use his legal skills to work in public service.

    • In general I agree that student debt in our society is not about character. But I am not prepared to make a blanket statement about debt and character; I see that as complicated, and it depends in part on why you borrowed the money and what you did with it. I do think, thought, that if you let it get to the point that someone takes out a judgment against you, and you let that fester for two years, and you keep beating your head against a wall like the bar exam, it’s not illegitimate for the bar, or the court, to wonder if you are going to do a good job of managing client funds or function well as a lawyer.

      Do I think the Board was right to reach out and grab this case after the local bar group let it through? Not especially. I’m no great fan of the character and fitness process anyway.

      Do I think the Court’s decision is compelled by these facts? Not at all.

      But is it obviously wrong in the ways portrayed by the Minnesota Layer? No to that too.

      This just isn’t a simple case of choosing to work in public service at low pay — it’s also a case of having your debt get really nasty and not cauterizing the wound (e.g. by declaring bankruptcy sooner).

      The Court is telling him to show he can get his act together, then come back again. That’s harsh, but not obviously wrong.

      Note also that this isn’t a case of a first-time taker or even a second-time taker of the bar. It’s a would-be fourth-time taker. I would imagine that the odds of passing after three failures cannot be that high.

  4. Tyler says:

    The credit card debt is such a tiny part of the debt picture. He borrowed as much as he did because willingness to borrow is the main prerequisite for law school attendance. It wouldnt matter if he had $15,000 in credit card debt. It pales in comparison to the $150,000k he just dumped into a worthless education.

  5. anon says:

    There is no benefit to cauterizing the wound except for the damn Ohio Supreme Court. Your analogy to the body is just wrong. Bankruptcy is going to remove this wound entirely no matter how big the bank says it is and there is no ongoing additional damage (except for the Ohio Supreme Court’s opinion of him); the bank is wasting their time too since whatever amount they have this debt on the books for, they are getting nothing . To even spend one iota of time or money to work it out prior to bankruptcy is not smart. Why would you advise someone who is essentially judgment proof with respect to that particular debt to do anything other than make sure he lists it when he eventually declares bankruptcy. You are like the bank people who advise people to struggle to pay their mortgage when they are eventually going to lose the house anyway. The smart thing is to stop worrying about the mortgage and see if you can fight the foreclosure. At least that’s what I would guess your foreclosure experts are telling their clients in many cases in a program you are so proud of (which also would leave precious little money to pay off any debt).

  6. anon says:

    Why bother with a repayment plan? That is probably bad lawyering since the man is judgment proof with respect to this particular debt. You want this guy to pay off his credit card debt to show some kind of moral fitness, but you want foreclosure clients in many cases to stop paying their bank debt because that’s the smart thing to do. I think you are being too judgmental (and I think it’s probably because you are being defensive because the real villains in this story are not the Bar, the Supreme Court of Ohio, or the applicant).

  7. anon says:

    sorry for the double post.

  8. Just me says:

    Tyler hits on something – though I do not fully agree with him. The issue of law school debt is a serious problem. I think many (if not a very large majority) of recent law school grads have a hard time coming to grips with the grim reality of 6 figure debt at the end of law school, and only a fraction of the opportunity and respect that they expected when they chose to become attorneys. As a profession, I think we need to do a better job of portraying the realities of lawyering to young people. We also need to stop letting so many people into law school.

    Of course, I don’t entirely disagree with the Court on this one either. I have already met more than a couple of otherwise good people who made poor decisions leading to disbarment – all of them were trust fund management issues.

    I think a lot of this could be solved by eliminating a year of lecturing and adding a 2 year residency-type requirement. During the residency, lawyers would be required to work for the state or an approved non-profit, would have their loans deferred during the residency, and granting of a Bar card would be conditioned upon satisfactorily completing the program.

    The residency requirement would do three things: 1) by cutting a year off of lecturing, you would reduce the cost of a JD by a third; 2) the loan deferred-paid residency (just like law students get) would give young lawyers to years of no-debt-obligation training that would put them in a much better position to fend for themselves once they hit the street; and 3) by adding a year to the over-all study period before anyone could conceivably make “big money,” we may discourage law school applicants whose hearts really aren’t in it.

    In essence, I believe the residency requirement would result in fewer lawyers entering the practice, but those lawyers that do enter the practice would be more competent and less debt burdened.

  9. Just me says:

    Quick corrections:

    Where I said “just like law students get” above, I meant “just like medical students get.” Later in that sentence “to years” should have been “two years.” Fell free to point out any other spelling or grammatical errors I made. The embarrassment may teach me to proof read before posting.

  10. Mike Marshall says:

    I’ve thought about this one a lot since I emailed it in. I see the point of the disregard for the default judgment as perhaps indicative of unfitness to practice. But I guess I don’t understand– he likely knew of the default judgment, was only making $12/hr, had a kid. What was he supposed to have done? Not have a kid and work for $12/hr in the only job he could likely find? That’s like the court saying “We know you’re trying but try differently.”

    I guess I just wish that the Ohio Bar and SC took a slightly more charitable view of the situation that they did. Think of it this way-

    Take away:
    -the default judgment that sat for two years (very, very bad, might show disrespect for the law, legal process, the courts and their judgments); and
    -the bar failures

    and how different is this young man from a significant number of law grads in this country who have:

    -$100k+ in student debt
    -$5-10k in CC debt
    -jobs for $12/hr defending the accused and their Constitutional protections (or for no money at all, like more than a few members of my class, because apparently experience is compensation enough!)?

    All you have to do is add one more bad fact and they are in substantially the same position.

    Also, I think they were wrong to make more of the bar failures than they should have. I just looked up the Ohio rules and they allow a max of 4 re-examinations for the bar. If failing the bar a certain number of times is indicative of a character flaw or unfitness to practice, then that number in this case ought to have been 4. It’s almost as if the Bar and SC are retroactively changing that *just this once* because the guy is otherwise a schlemiel.

    I do see the point that he isn’t having the door slammed in his face entirely, and that the Ohio SC is telling him to get his act together, but jeez, talk about piling it on…

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