Brian Leiter briefly noted this news story claiming that Catholic University is considering instituting a 20% university-wide cut in operational expenditures as a result of declining law school revenue. It appears that this cut will not affect permanent faculty lines - but may impact things like adjunct faculty hiring. This isn't an isolated situation, I suspect. I have heard of at least one other school that cancelled a faculty hire in another department due to the law school situation. And although nothing is public right now, we know that law schools themselves are starting to make some hard decisions.
Bill Henderson has previously said that he expects big layoffs at law schools this fall - presumably thinking that there will be a huge overall revenue shortfall, but that schools won't know, until opening day, just how bad their own situations look. We will soon be able to test Bill's crystal ball. But the Catholic University story should wake up a much wider swath of academics to the impact of the current law school crisis. At universities highly dependent on law school revenue - apparently, Catholic U is among those schools - the crisis will eat directly into the budgets of other programs. But where law schools are break-even propositions - the many law schools where overhead covers just that - the reality that law schools actually need institutional subsidies (just like almost every other college in a larger school) may mean that the universities may more critically question the need for a law school...and may empower the university to impose its will and priorities on law schools that were previously very independent.
There are big implications to this crisis. The simple (but serious) story is about cutbacks, layoffs and possibly closings. The more complex story we may soon learn involves the question of whether, notwithstanding the ABA, law schools that have claimed exceptional status within their institutions will become unexceptional colleges in the larger university constellation. Special snowflakes no more, as it were.