Cost Cutting in an Age of Declining Law School Enrollment

UPDATED 12/16 (The new and revised parts are in italics)

As Alfred Brophy reports, once again law school applicants are down this year.  The number of applicants is down 8.5% at this point from last year’s record-low applicant pool.

This will make the fifth straight year of declines from the last application peak in Fall 2010.  In 2010, there were 87,900 applicants, 60,400 were admitted to an ABA-accredited law school (69% of applicants) and 52,500 enrolled (87% of those admitted).  In 2013, there were 59,400 applicants, and 45,700 were admitted (77%) and 39,700 enrolled (87%).  In 2014, there were 54,500 applicants, a 6.7% drop from the previous year.  LSAC hasn’t published the final data on the number admitted, but according to data released by the ABA in December, 37,924 enrolled, a 4.5% decrease in enrollment.   

For the last four years, enrollment has dropped each year by about two-thirds of the decline in applicants.  If the pattern holds true this year, enrollment will decline by about 5.7%, which would put 2015 enrollment at around 35,750.

Year                Decline in Applicants            Decline in Enrollment

2011                           -10.0%                                   -7.7%

2012                           -13.7%                                   -9.2%

2013                           -12.3%                                   -6.7%

2014                           -6.7%                                      -4.5%

2015                           -8.5%                          Projected -5.7%

For the past four years, virtually every law school in the country has been faced with a choice: lower admissions standards, shrink the entering class size, or some combination of the two.  As I have previously noted, 95% of law schools have demonstrably lowered their standards and probably the real number is pretty close to 100%.  This can be seen not only by the declining LSAT numbers of entering students, but also in the fact that enrollment has not declined at the same rate as the decline in applications.

As I have made clear in several prior posts, it is my opinion that quite a few law schools have gone too far in lowering admissions standards.  In an effort to bring in enough revenue to keep operating or to limit the number of faculty and staff that have to be dismissed, a number of schools have admitted students with a highly questionable level of aptitude for the study of law.  Some schools may have attempted to justify these practices to themselves by the belief that they were simply trying to ride out an economic downturn and that law school applications would inevitably rebound.  Whether one believes that law school applications will eventually rebound, or that the lower demand for legal education represents the new normal, the recent applicant data shows that we have not yet hit bottom.  So, once again, this semester law schools will be faced with the decision of whether to further allow admission standards to erode or to adjust the size of the entering class.

In the abstract, it seems obvious that the right thing to do is to draw a line in the sand and refuse to lower standards even further, especially at the lower-tier schools which are already scraping the bottom of the talent pool.  Whatever law school you are associated with, as an employee or as an alumnus, there is no benefit to you, or to the profession as a whole, to have a less capable group of students entering the pipeline to the legal profession each year.   But a decline of 8.5% in enrollment would represent a huge decrease in tuition revenue (the primary source of revenue for virtually all law schools) -- at least 8.5%, but probably more, as competition for law students at all levels has meant that law schools have had to discount their tuition more and more each year.  Such a significant decrease will most likely mean painful cuts to faculty, staff, and/or programs, unless law schools can determine ways to cut costs in other areas, or increase revenues.  Five years into the great law school recession, most law schools have presumably found all the obvious ways to cut costs and explored feasible alternatives for increasing revenues.  The low-hanging fruit having been picked, more and more law schools are going to be faced with some very difficult choices. 

In this post, I will explore some of those choices and offer some ways that law schools might cut costs so they will not have to lower standards any further.  I invite those with other good ideas, either theoretical or based on experience at their schools, to share them in the comments.

Voluntary Retirements/Voluntary Pay Cuts

The single biggest cost of running a law school is personnel salaries and benefits , and the largest expenditure is for faculty salaries.  While faculty salaries can be frozen, it is very hard to reduce salaries because of tenure rules.  Many law school faculties are top heavy with baby boom era senior full professors who are bringing in very high salaries, often double or more than what an entry level professor makes.  Few schools have mandatory retirement rules.  Several law schools have sought to reduce salary costs through buyouts or incentives to retire.  There are a couple of different models for such programs.  For example, a school might offer a professor emeritus status and a reduced courseload at a significantly reduced salary, or they might simply offer them a one-time lump sum payment to resign or retire.  I would encourage those who are at or near retirement age to propose your own terms for a voluntary retirement plan to your Dean, before the school makes you an offer that might not be as good, but which you may not be in a position to refuse.  For example, if you are making $180,000 to teach three courses a year, you could offer to retire and take some or all of your retirement benefits.  The school would then hire you for three years as a distinguished retired visiting professor to teach one course for $60,000 without benefits after which the school would have no further contractual obligation to you.  This would be a positive way to transition into retirement, would save your school a lot of money, and would open up opportunities for the next generation of aspiring law professors.  Another possibility is for the faculty, or some subset thereof (e.g. tenured professors) to voluntarily agree to some reduction in their salaries, at least temporarily.  To encourage faculty members to take a voluntary pay cut, the Dean should be the first to step forward and voluntarily take a significant decrease.  Over the past two decades, Dean salaries, like the salaries of corporate executives, have grown at a far greater rate than faculty salaries.  Whereas the typical Dean used to make 30 or 40% more than senior faculty members, at many law schools the Dean now makes double or more what most full professors make.  Before cutting lower paid staff, Deans should seriously consider cutting their own salary.  That would demonstrate real leadership.

 Cuts to Faculty Research Support

In recent years, the expectations for scholarly productivity of law professors have increased dramatically.  At many law schools, it is common, even expected, for a faculty member to produce one or more law review articles per year.  It used to be that producing scholarship was presumed to be part of the basic job description required of all law professors, although perhaps at a lower rate.  But over the last generation, it has become more customary to pay professors extra for writing.  At many law schools, professors have come to expect a research and writing stipend virtually every summer, and consider the summer writing grant to be an essential element of their salary.   While scholarship is undoubtedly important, all of these grants are very expensive, and (without getting too far into this debate) it is far from clear that all of this extra scholarship provides any significant benefit to the law students who subsidize the research.   Law schools can potentially reap significant savings by imposing limits on summer writing grants, for example, limiting grants to one every other year for tenure-track faculty and one every three years for tenured faculty.  Schools that do so should make it clear that a scholarly output of one law review article every other year is perfectly acceptable for purposes of tenure and promotion.  Professors needing to supplement their salaries in alternate summers could do actual work as attorneys, which would provide just as much benefit, if not more, to law students, by keeping professors current in their areas of practice.

 Cut/Consolidate Administrative Positions      

In the not too distant past, the typical law school had three Deans: the Dean, an Assistant or Associate Dean of Students (sometimes a professor, sometimes a career student services professional) and an Assistant or Associate Dean of Faculty or Academic Affairs.  In recent year, the number of Deans has increased exponentially.  There are Deans of Graduate Programs, Deans of Experiential Learning, Deans of International Programs, Deans of Administration, Deans of Research, Deans of Faculty Development, etc..  Just to give a few examples from law schools in Illinois:  the highly regarded University of Illinois College of Law has a Dean, two Associate Deans, two Executive Assistant Deans, six assistant Deans and one Director on their directory of Senior Administrative Staff;  Loyola of Chicago lists a Dean, four Associate Deans and four Assistant Deans; at John Marshall Law School there is a Dean, five Associate Deans and two Assistant Deans, plus a Chief Financial Officer, a Chief Development Officer and an Executive Director for Institutional Affairs (whatever that is).  This demonstrates that the explosion in law school administration, especially in the Associate/Assistant Dean ranks, is occurring at law schools at all levels.  Now, of course some of these Assistant Deans are simply what would have been called Directors a few years ago, such as the Assistant Dean for Admissions and Financial Aid, but there is no question that overall, there are far more law school administrators than there used to be, and I am not convinced that all of these positions are absolutely essential or that all of the positions need to be at the Assistant Dean level or higher in order to get qualified employees.   During my twenty years in the Air Force, I have experienced more than one reorganization required by budget cuts where headquarters staff were dramatically cut or eliminated, and it never had a discernible impact on the Air Force’s core missions.  Indeed, sometimes eliminating layers of bureaucracy had the salutary effect of increasing efficiency by allowing folks to concentrate on their primary responsibilities.  Law school enrollment has dropped 28% in the last four years.  Law schools can afford to shrink their administrative personnel commensurately.   This is a ripe area for downgrading, consolidating or eliminating positions that could achieve substantial cost savings. 

Reduce the Number of Course Offerings/Mandate More Courses

In recent years, law schools have added an ever-increasing number of courses to their schedules.  Many of these courses are of limited appeal to the majority of students and have very small enrollments.  With smaller student bodies, law schools simply can’t offer the same range of courses.  In order to reduce the need for so many electives, one solution is to make more core courses mandatory.  For example, all schools offer evidence, criminal procedure, sales, will and trusts, taxation, and business associations, but there is a great degree of variation among schools in which, if any of these courses are required.  In light of slipping bar pass rates, a faculty would be well-justified in mandating more bar-tested, fundamental courses.  Of course, if the electives that are eliminated are primarily taught by adjuncts, then the savings may be relatively small, but if enough electives are eliminated, then it may be possible to eliminate some full-time faculty positions, which will result in more significant savings. Another promising possibility is for law schools to cooperate and offer specialized classes and even seminars electronically, with the participating schools sharing the costs based on the number of students enrolled.  With the now almost seamless ability for faculty and students to communicate instantaneously, exploration of cooperative teaching and study is ripe for development.  Similarly, in cities with multiple law schools, some upper-division seminars could be cross-listed, allowing students from each school to attend with the schools sharing costs.  This model has been successfully used at the undergraduate level. For example, students from Wellesley, MIT and Harvard can cross-register for courses not offered at their home school.

Law Library

Frankly, I don't know much about library budgets.  I know that the ABA Standards require that a core library collection be maintained, and that most law schools also have specialized collections.  I know that library expenses represent a signficiant chunk of a law school budget, so perhaps there are savings to be made there.  I also know there has been pressure on librarians to cut costs and many librarians feel that they have already pared library budgets to the bone.  I welcome comments from library directors of innovative ways to save.  

International Programs

Many law schools offer summer study abroad programs.  These are primarily targeted at students between their first and second years of law school, but plenty of students enroll in their second summers as well.  As it has become harder and harder for law students to find paid employment during the summer, these programs have proliferated.  These programs are marketing tools to lure students into law school and they are also popular among law faculty who get a paid working vacation to some desirable summer locale.  The ABA also requires that these programs be inspected from time to time, which provides a great boondoggle for those selected to travel overseas to inspect these programs (at the law school's expense, of course).  The real question is - do these programs make any money?  My sense is that these programs are not generating revenue at most law schools. At best, they break even, and more likely, when you add in the costs of the ABA inspections, marketing materials, etc. they may be losing money.  If they are losing money, that means that law students who don't get the chance to study abroad are subsidizing those who do. These programs should be carefully scrutinized to ensure they are not a drain on the school's finances.

Overhead

Most law schools that are affiliated with a parent university pay that university a share of revenues in the form of "overhead."  This overhead ostensibly covers administrative costs.  In reality, many universities opened law schools with the expectation that they would be cash cows and that they could use excess profits generated by successful law schools to support other non-revenue generating programs.  Back in the days before full-time legal writing professors, clinical/experiential opportunities for every student, robust academic support programs, and burgeoning faculty and administrator salaries, law schools used to be very inexpensive to run, and tended to generate a significant surplus.  While some law schools are still undoubtedly operating in the black, the margins are much smaller than they used to be, and raising tuition significantly is simply not an option in the current environment.  If your law school is paying excessive overhead costs to the parent university, then the Dean should seek to renegotiate the terms of the overhead arrangement, at least temporarily. When my father was a law school Dean, for example, he negotiated a decrease in the overhead from 20% to 15% with the parent university.  At the time, the school was generating about $20 million in revenue.  Thus, the 5% reduction in overhead, represented a $1 million boost to the law school budget.  That's real money.

 

Conclusion

Over the past few decades, law schools have evolved from one dimensional institutions, offering a standard menu of courses taught in a standard method primarily by white men to white men, to multi-dimensional institutions offering an incredible diversity of courses and programs from highly diverse faculties to highly diverse student bodies.  While this incredible diversification has brought great richness to legal education, it also has resulted in a vast proliferation of the number of constituencies within legal education, including clinical education, legal writing, academic support, etc..  Therefore, it is likely that any discussion of a modification of any program with cost saving in mind will face fierce institutional opposition from one faction or another.  (The debate in the comments about the value of full-time legal writing instructors vs. adjuncts is a good example of this.)  Yet, if law school administrators and faculty refuse to consider all options and make tough but necessary choices in a thoughtful and deliberate manner, more and more schools will be forced by their university administrations and financial realities to make sudden and Draconian changes which will be potentially more disruptive and destructive to the quality of legal education and institutional morale.   While the easiest option may be simply to lower admission standards to maintain class size, continually lowering standards is neither viable nor wise.  A great lawyer is a highly creative problem-solver. It is time for faculty members and administrators to put this skill to work.  And please share.

 

Comments

[Derek Tokaz]

Give the professors who want to do scholarship a minimum 2/2 courseload, and create a second teaching-oriented track with a 3/3 courseload. That should let you cut about a third of your faculty.

The two obvious objections to this are that faculty scholarship will suffer with the extra teaching load, and that no prof has time to grade papers from a 3/3 courseload, so teaching will suffer in those classes. Worse academics, and worse teachers!

To address the scholarship concern, we simply need to change the emphasis from quantity to quality. What good comes from a professor writing 10 papers in 10 years which no one reads and even fewer people cite to? Everyone would be better served by the same professor writing 1 paper every 3 years, and that paper being of some note. The summers provide ample time to grind away at research, and anyone who's serious about writing knows that most of the real intellectual work is done in the shower, while driving, and washing dishes. They're not losing any of that back-burner, stew-simmering time. I'd think professors would welcome the chance to leave a mark on their field, rather than having all of their time and energy result in nothing but a pile of obscurity. (The exception being hacks, who if asked to produce quality would be revealed as importers.)

As for the 3/3 teaching-oriented professors, there are ways to make grading more manageable. You can add small assignments throughout the semester, and thus have a shorter, less weighty exam at the end. (A wise professor would stagger the due dates in his classes.) With small assignments, grading and feedback can be easily streamlined. A detailed grading rubric can allow the prof to simple check off boxes explaining a grade (B organization because X, C+ support because Y); it's not as helpful as a page-long letter explaining the grade, but it quickly and easily tells the student what to focus on improving. Combine that with an hour or so of class going over common issues, and you've got yourself a pretty efficient method for assessment and feedback.

Finally, it might help for law schools to create a new junior rank for professors; similar to the VAP position. Have them teach a 1/1 load, work on scholarship, and act as a professor's assistant (grading papers, teaching a couple days in the semester, etc). Pay would be something like $50k. That's less per credit than we pay profs now, and they're doubling as assistants to help increase the productivity and workload of other professors. I know some will argue that's not enough to entice someone away from a BigLaw salary, but it works for judicial clerkships, there doesn't seem to be any shortage of VAP candidates, and anyone who wants to be a professor but ends up in BigLaw isn't there for the money -- they're there because they couldn't get a job teaching.

[MacK]

A couple of points for Derek Tokaz. I agree that most legal scholarship deserves the nickname scholarshit. But Richard Posner senior manages and managed to teach at Chicago, be a federal judge, grade his papers and write 40 plus books and hundreds of articles and is still the most cited legal scholar BH a wide margin (many of his papers being heavily cited too.) Of course, most of what Posner writes is relevant to the law and legal practice ....

So the idea that law professors should cone out with one paper a year and - to do that must not teach, is not borne out by Posner. I'd add that Ken Feinberg was one of my professors - and he found time to grade papers, write articles, practice law and serve as a special master simultaneously - and did and does all if these things quite splendidly.

[public interest lawyer]

Stanley Fish teaches English 101 as often as he can, and he does it because he wants to. It's not a question of credentialing, but of respecting the project and sharing in it. It's quite simply at the core of the discipline of literary studies.

http://opinionator.blogs.nytimes.com/2009/08/31/what-should-colleges-teach-part-2/?_r=0

There's an enormous gap between his freshman composition classes and his graduate seminars in seventeenth century poetry. In contrast, there's almost no gap at all between first year LRW and any second or third year law school seminar or course.

I didn't mean to say that every doctrinal teacher would be a good legal writing teacher. What I meant to say was that any doctrinal teacher should want to teach legal reasoning and writing to new law students, detached from any particular doctrinal field, just like Stanley Fish wants to teach the elements of language and rhetoric to freshmen. It goes without saying that a disengaged, arrogant, and muddled doctrinal teacher would not be a good legal writing teacher.

I've taught in many different law schools and have never come across a legal writing teacher who has any formal training in composition and rhetoric or even narrative theory (by which I suppose you mean a graduate degree in those English and Comp Lit specialties). That's different from the autodidactic skills that all lawyers acquire as they prep for different cases. I suppose many law professors (including me) were English majors in college or have certificates in primary or secondary school education, but I would not call those law school teaching credentials.

In fact, across the board, new law school teachers are thrown into the classroom without having been trained in educational theory and practice. That includes doctrinal faculty and legal writing faculty. Maybe law schools should provide some.

I must disagree with the claim that all legal writing teachers teach doctrine. In fact, I would say the opposite. No legal writing teacher teaches doctrine unless he or she teaches a separate doctrinal course. A doctrinal course covers a doctrinal field in a systematic manner. If anyone wants to construe teaching a legal writing assignment that addresses a legal issue as teaching doctrine, then no harm, I guess, but I don't think that's a valid claim.

[ML]

It seems to me that if schools are overstaffed, their faculty teach too many, not too few, courses.

One obvious option is to lay off most of the faculty, using the "emergency" clause of a tenure policy.

But here's another, somewhat less cruel, option. So why not just say: everyone teaches half the load for half the pay? The older faculty would be able to ease more gradually into retirement, and the younger ones might do a little more lawyer work on the side.