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Catholic University of America to slash overall budget by 20%; plunging law schools apps to blame

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Last November CUA’s law school announced that the managing partner of Kirkland and Ellis’s DC office would become the school’s dean the following July. In January the school revealed the new dean was taking over immediately, and that staff were being laid off.

Now comes word that the university as a whole will cut operating expenses by 20% (!) because the cash cow that was its law school is being ground up into hamburger by, among other things, the availability of employment statistics regarding outcomes for CUA law school graduates.

Those statistics reveal that 88 out of 246 2012 CUA law grads had a legal job (full-time long-term employment requiring bar admission) in February of 2013, not counting two people who were employed by the school itself.

The law school accounts for about 10% of the university’s overall enrollment, so the mind reels at the extent to which the rest of the university has been depending for its solvency on encouraging the law school to produce massively indebted graduates who are unable to get any sort of legal job in what is at present the worst place in the country to try to get a job as a lawyer (Washington DC).

This naturally raises the question of how many other universities depend on their law school’s graduates to cross-subsidize the rest of the campus to a similar extent. A friend who is in a position to know tells me that quite a few law schools are now actually running operating deficits, although university budgets are so byzantine in regard to cross-subsidization via the charging of “indirect expenses” and the like that it’s often very difficult to untangle the actual financial situation. We law faculty are of course encouraged by our administrative overlords not to worry our pretty little heads about these matters, not that most of us require much encouragement of that sort anyway.

Another friend makes a prediction:

My suspicion is that law schools will close when they appear to need long term subsidization. I got into a row a few times at Prawfs over this, but when you read most schools tenure guidelines as an implied contract, it starts to jump out that cost cutting would be extraordinarily hard in any department – with seniority rules, the need to show financial crisis etc. The easy out is actually to “pull the plug” on the whole department. That is why I think a few colleges could quite abruptly make the decision to simply close the law school.

I do find amusing the idea that some professors have that everyone will take a nice round 10% pay cut. You never can really sell an across the board pay cut – someone always has alimony, kids in school, impecunious parents, a big mortgage, and if it is hell to make it stick. Look how fast law firms push out partners having a bad year… The idea that senior faculty will take one for the team, or junior faculty, many of whom have big student loans – is not that realistic. The problem is that it does not look very easy to layoff tenured faculty and oddly, tenure seems to be one of the few areas in US law where the idea of constructive dismissal may actually apply (I did some research a while back.)

My own sense of the situation, which I have expressed before, is that when the first reputable college jumps and announces that its law school is closing there will be a rising wave of followers. The interesting question is how far are some schools from that point – if enrollment is way down in August/September it could start sooner than many people think.

I note your comment about lack of transparency. The late Dick Gordon told me, when he was Dean of Georgetown, that he took the decision to move to Capitol Hill so that he could segregate the finances better – that the murkiness was in overhead allocation for shared facilities – registration fees, campus upkeep, heating plant, you name it. Some departments pay essentially nothing for their use of campus facilities and office space, lecture halls, gyms, registration services, while law schools often pay inflated charges, and the law school Deans don’t necessarily know how inflated.

Fasten your seatbelts; it’s going to be a bumpy night.

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