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Thomas Jefferson School of Law slashes jobs, salaries, and budget

[ 42 ] December 12, 2013 |

The new dean at TJSL has apparently been brought in to clean up the mess created by his predecessor, and he’s not being too shy about the fact:

I do not know how Thomas Jefferson became the whipping boy for critics of legal education. We must, however, be honest with ourselves; many of our troubles are the result of our own missteps, our own failure to plan, and our own failure to address problems in a timely fashion. My immediate plan and promise to you is that we will take aggressive and transparent action to confront these challenges. Since July 1, we have taken what I think are positive, though at times painful, steps to address the most critical challenges, whether self-imposed or systemic. Let me give you three examples.

First, while a general decline in enrollment is a systemic problem, we did not help the situation by allowing an unsustainable growth in the administrative structure of the school or building a facility as grand as ours. But, as you may have seen in press reports, the law school made severe cuts to its budget in response to the nationwide decline in applications. The reports did not paint the full nature of those cuts. For fiscal year 2014, the law school made cuts, totaling $4,798,081. Among other things, we layed-off 12 staff members, eliminated many more unfilled open positions, cut staff salaries by a minimum of 5%, cut faculty salaries by a minimum of 8%. In spite of these cuts, I am proud to say that 100% of the faculty contributed to this year’s annual fund.

Skimming TJSL’s tax filings for FY2012, it appears the new dean has cut the school’s operating budget by nearly 10%. As of 18 months ago TJSL’s balance sheet looked pretty shaky: the school appears to be almost 100% dependent on tuition, with a bit of rental income thrown in (if it has an endowment I can’t find it in its financials).

The school’s only significant asset is an extremely expensive and very heavily leveraged new law building: the institution’s net worth, as of 18 months ago, was equivalent to about five months of its current operating costs. Its bonds have been downgraded to junk status. (Per S&P, “management does not anticipate meeting the [school's] financial covenants until 2018.”)

Even by today’s grisly standards, employment outcomes for TJSL grads are almost unbelievably bad: a glance at its NALP report suggests that perhaps a quarter of the 2012 graduating class got real legal jobs, very loosely defined (21 of 260 graduates were reported to be making salaries of $56,750 or more nine months after graduation). Almost all these jobs were with tiny law firms (ten or fewer attorneys); only seven graduates got government positions, four as PDs and three as DAs. More than a third of the class was simply unemployed nine months after graduation.

TJSL doesn’t give out much in the way of tuition discounts, with the average student paying around 85% of the school’s $47,300 nominal sticker price (current nine-month cost of attendance is estimated at $72,000 by the school). If you include accrued interest the 98% of the 2012 graduating class with law school debt had just under $200,000 in such debt. This doesn’t include undergraduate debt (Again, the federal government will loan $216,000 over three years to anyone TJSL chooses to admit, assuming that person has not already defaulted on other loans.)

Obviously, even the most mild reform in the absurd process by which higher education in general, and post-graduate education in particular, is funded in America would put TJSL out of business immediately. (The school’s enrollment is shrinking very rapidly, with the last three first year classes featuring 440, 387, and 265 students respectively, despite moving to a quasi-open enrollment policy. While the school traditionally admitted about 45% of applicants, that number was up to 73% in 2012. And since a very large number of TJSL students transfer or flunk out after their first year, graduating classes tend to be only about two thirds the size of entering classes). Even without any reform, it may well be the first ABA law school to keel over, in which case the votaries of “the market” will undoubtedly celebrate another triumph of their mysterious god.

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  1. Tybalt says:

    it may well be the first ABA law school to keel over, in which case the votaries of “the market” will undoubtedly celebrate another triumph of their mysterious god.

    They certainly will; and when pressed on their absurdity they will say that all the mean and fatuous things they said about legal education critics didn’t apply to criticism of Schools Like TJSL, Which Just Weren’t Good Enough.

    • PaulB says:

      If TJSL goes under, it doesn’t necessarily mean that other bottom of the barrel stand alone schools will follow. TJSL is unique with its heavy debt obligations for the new campus building.

      • Barry says:

        The real question is how unique are they in the drop in applicants and class size. Anybody who’s next door to them in those figures is facing tremendous cuts in gross revenue.

    • tt says:

      Where’s the absurdity? The market seems to be doing the right thing there, and given the data in Paul’s post, TJSL probably isn’t good enough to exist.

      • ichininosan says:

        According to the form they filed with the ABA, there are 323 (rather than 265) students in the incoming class. If those numbers are correct, it tends to diminish the market correction point. To me, TJSL stands out a case of market failure. This school has been pilloried in the national press and in court filings specifically over the dreadful employment outcomes for its graduates since at least 2011 and yet perhaps more than 300 new students decided to sign the promissory notes this fall.

      • Philip Arlington says:

        The market has little to do with it. How can you fail to see all the distortions in the legal education system? How can you be unbothered that the way things are set up facilitates rent-seeking and exploitation?

  2. kindasorta says:

    I believe that this is what they call a “correction.” Your graduates are a few years ahead of you on this, TJSL.

  3. maxx says:

    “Obviously, even the most mild reform in the absurd process using NON-DISCHARGABLE DEBT by which higher education in general, and post-graduate education in particular, is funded in America would put TJSL and many others out of business immediately.”

    Bold and italics added.

  4. somethingblue says:

    I am proud to say that 100% of the faculty contributed to this year’s annual fund.

    Yeah, I bet they did.

    Your gift to the annual fund will be used in the areas that the Dean determines are of greatest need …

  5. Joseph Slater says:

    Not on topic, exactly, but shouldn’t that be “laid off,” not “layed off”?

  6. Hogan says:

    Sounds like they brought in a wartime consigliere.

  7. BoredJD says:

    “I do not know how Thomas Jefferson became the whipping boy for critics of legal education.”

    Don’t feel special. That line stretches around the block.

    • Barry says:

      “I do not know how Thomas Jefferson became the whipping boy for critics of legal education.”

      One of the qualifications for such leadership posts is not knowing about certain things.

  8. Barry says:

    “The school’s enrollment is shrinking very rapidly, with the last three first year classes featuring 440, 387, and 265 students respectively, despite moving to a quasi-open enrollment policy. While the school traditionally admitted about 45% of applicants, that number was up to 73% in 2012.”

    That suggests that they’ve gone from 978 to 363 applicants over three years (2010-12). If that curve doesn’t level out immediately, they’re doomed.

  9. BoredJD says:

    Anyone who talks about the “market working” in legal education is going to get a link to this Twitter account.

    https://twitter.com/LawLemmings

    30 seconds there will melt your brain.

  10. NewishLawyer says:

    Question:

    What effect would a law school closing down have on alums who are employed or otherwise?

    TSLJ is very new but presumably they have some alums who are making decent to good livings especially if they graduated pre-law school bubble and burst. How would disappearance hurt their reputations and careers?

    These are probably unanswerable questions but I imagine alums do have a kind of vested interest in keeping their institution accredited and open.

    • BoredJD says:

      I honestly think people tend to overrate the effect of a school closure on alums who have been out for more than a couple of years out. Nobody is going to get fired or lose their work experience just because their law school closed, and it’s not like TJSL or any of the other schools on the block had sterling reputations before this whole mess.

      The resistance of the alumni to threats to their alma mater’s survival seems to stem less from financial or economic interest motives, and more of a personal or emotional reason. Nobody, least of all a successful lawyer who has come up from nothing, wants to think they were dumb enough to go to the law school that closed for lack of applicants.

      • BoredJD says:

        Another reason may simply be that they feel attached to a school that gave them a shot when no other school would, or a scholarship/cheap tuition. This is a dumb reason in the age where retaking the LSAT is the obvious option for most people, but that was not the common wisdom until a few years ago.

      • NewishLawyer says:

        What effect would it have on more immediate alums?

        Or have we reached the point where we think everyone from 2008-2012 is probably doomed to stay at their current level or slip down further?

  11. ichininosan says:

    2013 TJSL incoming class:

    Median LSAT score = 146 (below the 30th percentile of LSAT test-takers).

    Median undergraduate GPA is 2.86

    • Major Rager says:

      In other words, the majority of their 2013 incoming class has no shot at passing the CA bar exam. Perhaps this has something to do with TJLS being a “whipping boy.” They should be lashed into dust.

    • BoredJD says:

      Some clarification for those who do not follow this stuff religiously: the size and stats of the entering class are important because one accreditation standard the ABA actually has with some form of teeth (or maybe just solid gums) is a minimum bar passage rate. Essentially, the rule requires a school to maintain an average bar passage rate, for first-time takers, that is no worse that 15 points below the average score for first-time ABA takers from all schools in that state. So if the TJSL c/o 2013 is at 30%, and the average bar passage rate for the c/o 2013 for all CA law schools is 75%, TJSL is in violation. No accreditation = no federal loan dollars = no mid five figure tuition = no high salaries and fancy resort trips for faculty members.

      Now pegging the standard to the statewide average ensures that a state bar can’t shut down schools just by making the exam more difficult or making the curve harder, since that will just reduce the overall average score. However, it also means that a school cannot throw open its doors and admit everyone with a BA and a loan app, since there’s a point at which a student simply does not have the aptitude to pass the bar, especially in California where the bar exam is very difficult.

      Now a school has all sorts of tricks to filter out people who are likely to fail without having them sit for the exam. They can fail people out after the first year. They can delay graduation for people who are unlikely to pass or offer intensive prep classes for at-risk students. But these only go so far before the school is facing a conundrum- either admit so many underqualified students that the bar passage rate craters, or limit class size, tuition dollars, and take the pain.

    • giovanni da procida says:

      2.86 Median GPA? Seriously? In 2006 the average GPA was 3.11 (from the Washington Monthly). 40-45% of grades given were A’s, and the median GPA at this place was that low? Crazy.

  12. CWSLGrad says:

    I’d be interested to know how California Western’s numbers compare to TJSL’s. Follow-up article?

  13. LawDdaw says:

    They should rebrand the school as the George Jefferson School of Law.

  14. SD Atty says:

    They won’t be going out of business until the checks start bouncing. The faculty and administration have nowhere to go even if they aren’t willing to admit it. Any warm body with tuition potential gets in, and there are still plenty of warm bodies to be had.

    The good news is that there is still plenty of room to cut, and the feds are still paying 100% of the tuition. Even in the midst of a severe crisis it is a fantastic business model.

  15. TGP says:

    Have you guys been to the new TJ building? It is really really nice. Located down town near the ball park it would be a good buy for USD law or UCSD which is always rumored to be interested in buying/starting a law school.

    • George Hussein Clinton says:

      That might be a way for this school to survive – get absorb by a larger university and stop being a stand-alone.

      • Barry says:

        “That might be a way for this school to survive – get absorb by a larger university and stop being a stand-alone.”

        The problems are (a) that university would be taking on a money pit and (b) the law school’s reputation is poor. Probably any college/university needing the boost is a mediocre one, and is probably in tight financial circumstances themselves.

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