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

[anon]

ANonPRof

Don't worry about the endless looking in the mirror that the faculties of which you speak engage: "Mirror mirror on the wall, who is the fairest of them all?" "I'm better than him, I'm better than her, I'm better, better, better" ... This is all bs.

BTW, the reason those buildings got built was USNWR taking expenditures into consideration, no?

No point in speaking of your school if we don't know the identity. We can't verify the profile of your faculty, the location, the placement rates, etc. Suffice it to say that if you blame prestige, or the lack thereof, for failure to place grads in BigLaw, and you are at a lower ranked, urban school, IMHO you are barking up the wrong tree.

Again, IMHO, no matter what profile you claim to describe the faculty, if they act and think according to the mores of the law school academic establishment as presently constituted (and I suspect they do, given your references) then they are contributing to its abject failure. In fact, lower ranked law schools are doing more to neglect the needs of the communities they serve than the elite schools, IMHO.

(Part of these needs, of course, includes producing competent attorneys, who do not usually have a background as students who slacked off or were unable to do better than the bottom 15% in undergraduate school.)

David Frakt, above, does not really address the need to close law schools. For all the whining about how to tighten belts without really touching the padding of compensation and unseemly nest feathering, the bestowing of ever more titles (associated with increased compensation) and the basically unbelievably cushy jobs that legal academy considers ever so tiring, the best short term solution would be to rid the legal academy of schools that exist to feed off the federal loans, using marginally qualified or unqualified students as duped conduits.

However, that step, even if taken, would not change the perception that the legal academy has created, and thus the revulsion created in the public at large. The clueless cannot lead here. Something has to change in the hiring or the situation will only worsen.

And, AnonPRof, it is unfortunate but true that law schools on a par with the Infilaw schools will not be able to lead here (except, in the ABA, where the relevant regulators have been captured by these schools).

[John Thompson]

"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."

When we talk about law schools, we are talking about institutions that:

* Raise tuition and fees by several multiples of inflation every year in the middle of the worst market for their degree since the '70s (apologies to Iowa and the handful of others who haven't done this);

* Raise tuition and fees precisely so that students of lesser demonstrated ability (e.g. uGPA & LSAT) can pay enough to offset the tuition breaks given to students of greater demonstrated ability, while totally aware that these students of lesser demonstrated ability will carry more debt with fewer job prospects on average;

* Studiously avoid confronting the outcomes of their less successful graduates while making it seem to prospective students that their more successful graduates represent median outcomes, not outliers.

Law schools have a license to charge prospective students pretty much whatever so long as their captive regulators (the ABA and the state bar association) don't object. The courts have shown no interest in punishing law schools financially for lies or omissions that led their graduates to consider attending. Why wouldn't most law schools simply go on charging the less academically promising whatever is necessary to entice the better credentialed? It gives the illusion of standards being maintained while asking professors and administrators to sacrifice nothing.

[Michelle]

Quick comment on the suggestion for libraries. I agree with Adam that most, if not all, academic libraries have been making cuts for years, closely scrutinizing use in making those decisions. Further, I was amused to read David's comment that faculty and students get free access to Lexis and Westlaw. Students may not pay directly for either of these services, but their tuition does fund the library's budget, which in turn pays the subscription prices for each service. These aren't commercial prices, but they're substantial charges in any law library's budget. In fact, many of the e-resources available to law faculty and students are costly, sometimes more expensive than their print equivalents, though they often have additional benefits to offset the costs. (Yes, I am a librarian).

I still think that the issues David raises are worth discussion, but I do wonder if some of data underlying his suggestions may be faulty.

[David Frakt]

Michelle -

Clearly law library budgets are not my strong suit. I have revised my post accordingly. Thanks for your comments.

[LegalBeagle]

As law schools take students who are less and less qualified, they will need to provide those students with more and more resources, including a robust, full time legal writing program, yet that is exactly the opposite of what is likely to occur. The result will likely be reflected not only in low bar pass rates but also in less well trained lawyers, which is also just what the legal market is not looking for.

I think we need to get better at identifying and dismissing students at the bottom of the curve; and I think we also need to improve our ability to teach the remaining ill equipped students to practice law.

Legal writing teachers need to switch to doctrinal. Tenured professors need to retire!

[David Frakt]

General comments -
I agree that law professors can teach more. Undergraduate legal studies professors, many of whom are similarly qualified to law professors (many are J.D./Ph.D.s) teach twice as many classes as law professors with more graded assignments for half the money that law professors make, while still pursuing ambitious scholarly research agendas. Law professors have had it easy for a long time. When an industry is in decline, everyone has to work a little harder and make some shared sacrifices.

There is no doubt that the professionalizing of the legal writing field, so that most legal writing classes are now taught by full-time faculty (some tenure-track, some on long-term contracts, some on fellowships) has been hugely expensive for law schools. When I went to law school, these classes were actually taught by upper-division students! I for one, believe that legal writing is more important than ever, and every bit as important as doctrinal courses. Students graduating from college seem to have weaker and weaker basic writing skills, and with the overall decline in admissions standards, returning to an adjunct based model, where the quality of teaching is more uneven and the instructors, no matter how dedicated, do not have the same availability as full-time instructors (assuming that the legal writing adjunct is a full-time practicing attorney). While every major expense category must be on the table, I would be very cautious about cutting legal writing.

[Former Editor]

On LegalBeagle's point, I've often wondered why doctrinal and writing professors are kept in separate pools. It seems to me that a teaching split for all faculty between, say, one doctrinal and one or two writing sections a semester would (a) save costs, (b) require the tenured faculty to interact with students more directly, and (c) provide educational benefits on the doctrinal end of things by overlapping the doctrinal teachings with the practice teachings (i.e., a legal writing assignment can require the students to apply things they recently learned in the doctrinal class).

[AnonProf]

I like that suggestion Former Editor, but it may be tough to convince tenured professors to increase their workload. I think Washington & Lee does something like that.

[anon]

I also think FE's suggestion is a good one. I don't know about W&L, but South Texas and Elon already do something along those lines.

[Christine Hurt]

I was the director of an LRW program for 4 years. The first year I supervised 30+ adjuncts. Two quit mid-year and one literally stopped talking phone calls or answering emails. I had to email the managing partner of her law firm before she would admit that she had not showed up for classes. Some adjuncts were awesome, but quality was not uniform. I kept track of student evaluations, and the difference between sections taught by the three full-time LRW instructors and the long-term adjuncts and the short-term adjuncts were stark. Students hated it. I thoroughly believe that students learn more when taught by full-time instructors who are on-site and would love to test the hypothesis that investments in the LRW program will be recouped in the annual fund. The full-time LRW faculty were paid less and had very little in the way of research and travel budget (because scholarship was not required). I am quite happy to have the adjunct v. full-time debate with others with similar experiences.

[twbb]

Convince? Fiat from on high. Make them do it, then fire them if they don't. "Tenured" does not mean "non-fireable."

[Kyle McEntee]

FE, check out what North Texas is doing at their new law school.

[Former Editor]

Kyle,

Thanks for pointing me over there. I recalled a buzz about the school a little while back, pegged to its comparatively low tuition. I was not aware of its overlapping course structures and the inclusion of research, writing, and skills tasks into upper level course design. This is pretty innovative stuff (at least for the law school world). If the curriculum and course design is as described on the website, I suspect its graduates will be much more prepared for legal practice and do better on the bar exam than the entering class's credentials would predict. The type of learning tasks they seem to be aiming at are much more in line with most research on effective strategies to increase student information retention than the typical law school curricular and pedagogical design. Time will tell.

Maybe the school's surprisingly high number of applications was about more than just its sticker price? I know a curriculum structured like this would have been much more appealing to me as a prospective student than the typical one. I now really hope this law school makes it.

[AnonProf]

Part of the problem with having doctrinal faculty teach legal writing is that many doctrinal faculty never practiced law, or practiced law for so short of a period of time that they wouldn't know how to teach complaint drafting, etc. Perhaps they could learn, or maybe schools should hire faculty with more practical experience. But in a world where most doctrinal faculty have less than three years of practice experience, maybe they wouldn't be the best. However, as previously stated, assuming experienced doctrinal faculty, I do like the idea.

[twbb]

AnonProf, every professor, whether they practiced or not, should be able to teach some aspect of legal writing, even if it's the argument section of an appellate brief.

[anon]

twbb, sadly, most can't and wouldn't even if they could.

[Just saying...]

Doctrinal faculty look down on LW and clinical faculty. Just ask any LW prof or clinician how hard it was for them to get any form of faculty status and respect from their tenured faculties. Both had to try to the ABA for standards that granted them long term contracts, perks on a par with tenured faculty, etc. and it took years to accomplish. Many faculties wanted to deny LW and clinical profs voting rights, even right to attend faculty meetings, committee appointments. Why? Because they had no respect for what they taught and how they taught it. Things have improved at most schools but doctrinal faculty do not think skills courses are on a par with what they teach and therefore, most of them would never "sink" to teaching LW and I do not think most would be very good at it for the reasons stated here by others and because the course is a hell of a lot of work to prep for, teach and grade. Far more so than teaching the same subject year in and year out with little need to prep or update material and then recycle exams every few years.

[anon]

Just saying - I would modify "doctrinal faculty look down" to "many doctrinal faculty look down." There are law schools that provide tenure to LRW faculty because the faculty as a whole recognizes the importance of the subject matter.

[public interest lawyer]

One of the problems with the current model of legal education is that doctrinal faculty does not change itself to emulate the legal writing faculty in its midst, but the other way around.

In every one of the many law schools at which I have teaching experience, the goal of the legal writing faculty has been to get the same terms and conditions of employment as doctrinal faculty -- not a bad goal in principle, but in practice it means lighter teaching loads, higher pay, more status, summer research money for trivial writing projects, etc. All of the unpleasant traits of doctrinal faculty -- entitlement, arrogance, uncollegiality, incivility -- become heightened in a group of faculty members who are resentful and frustrated because they rarely reach parity with other full-time teachers. (They might reach parity if they weren't chasing a moving target, but law professor salaries and benefits keep going up and up for no earthly reason.)

To make it worse, many legal writing teachers lack the elite academic credentials of the doctrinal faculty and are geographically tied to their localities so they cannot move up by moving on. Often they are decanal rather than faculty hires and, in any event, could not compete in the AALS job market. Even if they had practice experience coming in to teaching (which many of them don't) that quickly becomes stale and irrelevant.

The bottom line is that separate legal writing faculties as they have developed over the past fifteen years are part of the pathology of law schools, not part of the cure. There is no reason why there should be a job title called "Professor of Legal Writing." It's simply nonsense. Everyone on the faculty is a "Professor of Law" who teaches law courses in a law school.

There is no reason why every law professor shouldn't be willing, able, and indeed enthusiastic about taking on a first year writing seminar, on a regular basis, in addition to their other duties. No law school faculty can really claim that it is overworked these days. Most work three days a week for eight months of the year. Legal writing is the best teaching assignment in the law school and takes no expertise in any particular doctrinal field -- just some thought, experience, and collaboration with other teachers. Anyone who doesn't want to do that simply takes no satisfaction in teaching and shouldn't be teaching anything.

[Just saying...]

anon @4:57 - the doctrinal faculty that respect what LW and clinical faculty do are few and far between. Have you ever attended a LW or clinical conference? Both in panels and informally, there is so much complaining and angst about the poor treatment from doctrinal -- at least there used to be.

public interest lawyer is spot on in that the goal of both LW and clinical profs was to become just like the doctrinal folks both in terms of status and teaching areas. I know very few LW profs who did not harbor dreams of teaching a doctrinal course.

I have also heard that even at schools where peace had been established between LW and doctrinal faculty, the current financial problems facing many law schools has led many doctrinal profs to question why the LW profs are not let go and replaced with adjuncts. Also, many schools find themselves with too many LW profs now, given the drop in enrollment.