Home / General / Washington and Lee Law School cuts salaries, downsizes faculty and staff, invades corpus of endowment

Washington and Lee Law School cuts salaries, downsizes faculty and staff, invades corpus of endowment

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From the university’s web site:

Beginning with the 2015-16 academic year, the school will enroll entering 1L classes of about 100 students, resulting in a full-time student body of about 300. For comparison’s sake, the current law school student body is 374 and includes the largest third-year class in school history. The Class of 2017, which entered last fall, had 101 members.

Tuition will increase at an annual rate of 2 percent per year.

Financial aid, which will continue to be allocated beyond historical norms, will gradually return to sustainable levels after a transition period.

In October 2014, the Board of Trustees authorized an increase in the payout from the law school’s endowment income to 7.5 percent through 2017-18. This will add about $3 million to the law school budget in 2015-16.

The goal for the Law School Annual Fund, which provides unrestricted operating funds, has been increased to $1.5 million for 2014-15.

The current student-faculty ratio (9:1) will be preserved, but with smaller enrollments the allocation for faculty compensation will be reduced by about 20 percent (equivalent to six positions) and will be achieved through attrition over the four-year period. In addition, some senior faculty salaries will have a one-time salary reduction of 2 percent with salaries frozen for all faculty during the three-year period.

Six administrative and staff positions will be reduced over a five-year period, and there will also be budget reductions for visiting and adjunct faculty.

Operating budgets will be reduced by 10 percent in 2015-16 with the exception of the library budget, which will grow by 2 percent.

Although the financial model currently shows operating deficits for 2014-15 through 2017-18, the law school budget is projected to be back in balance by the 2018-19 academic year.

Prior to last year, the school’s total JD enrollment was consistently between 390-405 JD students, so this plan represents about a 25% reduction in the student body relative to historical norms.

W&L got a lot of good press a few years ago for transforming their third year of law school into an “experiential” externship-based program. The program didn’t result in more jobs for their graduates, however, and now the school’s central administration is bringing down the budget hammer.

Similar stories are now playing out all over legal academia.

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  • jim, some guy in iowa

    “invades corpus of endowment”

    sounds like something dracula would do- which i guess is appropriate, because it does seem that bloodsuckers have been running the law schools

    • BJN

      I don’t believe that W&L has been a particular bad actor when it comes to law school shenanigans, just a small, respectable school in the middle of nowhere that is getting destroyed by the drought of students applying.

    • rea

      You’d think a school named after Lee would know that invasion is a bad idea . . .

  • Richard Hershberger

    “Six administrative and staff positions will be reduced over a five-year period…”

    Wow! They must be really hurtin’!

    • Barry_D

      ““Six administrative and staff positions will be reduced over a five-year period…”

      That means schmucks; no VP/Dean/Assistant Dean/Associate VP to the Assistant Dean will be harmed.

      • BJN

        Again, people are seeing a giant corporate law school where there isn’t one. The “deans and administrative department heads” lists 8 people. All law schools saw a lot of bloat over the last generation, but this case isn’t a morality play about executive greed like Jefferson. This is a small, mid tier law school getting obliterated by the environment in legal education right now.

        • Law Spider

          The legal market is certainly the larger problem. But when I graduated from law school in the mid-1990s, there was only the Dean and 3 Assistant Deans, and IIRC, the head of career services. 8 is a lot of people to just sit around discussing which lower peon will do the actual work.

          • Barry_D

            “8 is a lot of people to just sit around discussing which lower peon will do the actual work.”

            I want to marry that phrase.

    • Philip

      That really is a marvel of modern corporate writing.

  • Andrew

    “In addition, some senior faculty salaries will have a one-time salary reduction of 2 percent with salaries frozen for all faculty during the three-year period.”

    Is that going to do anything concrete, or is it more a symbolic gesture?

    • Barry_D

      Well, I don’t know the situation, but I do believe that in most organizations, the higher-ups are more likely to get performance[1] bonuses and other considerations, above and beyond salary.

      [1] I’m deliberately not saying ‘good performance’.

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  • NewishLawyer

    This is arguably a bigger deal than the Hamline and Mitchell merger because Washington and Lee is much higher ranked and always had a good reputation, at least in the Southern United States.

    How much do people here think that a desirable location can help other law schools survive? Do we expect any mergers or closing in cities like NYC, SF, LA, Chicago, Boston, etc?

    • Unemployed_Northeastern

      I’d put dark horse money on something or other happening at Suffolk. Suffolk is not a standalone, but it is a rather curious creature where the law school pretty much underwrites the institution. Enrollment is only down about 1/5 or so, but to keep it that *high,* they have absolutely collapsed their standards. Take a look at LST: Suffolk’s 25th/50th/75th LSAT splits are now lower than New England Boston, which was never the case in the past, and even lower than newly-accredited UMASS Law. Suffolk was ALWAYS the 5th-best of the nine MA law schools, at least by admissions standards; now it appears to be 7th and approaching Western New England Law for 8th. 9th place is the unaccredited Massachusetts School of Law in Andover, which at least remains fairly cheap, if probably less valuable in the job market than simply having a high school degree from Phillips Andover down the street.

      Moreover, Suffolk has been on a big building spree for the last 10-15 years, and the result of that is they hold roughly twice as much in construction bonds as they do in endowment. And those bonds are rated at a lowly BBB. They offered buyouts to every tenured faculty member a year ago or so (I don’t know how many took them), they are on their fourth president in four or five years, and they are trying to sell some of their older buildings. Now that the area around Suffolk is no longer called the Combat Zone – indeed, it has a Ritz Carlton and host of new buildings where a 1BR is ~$4k/month to rent or $600-750k to buy – they may get a pretty penny for those sales, but the university appears to be on the brink of a Yeshiva-esque financial emergency.

      • NewishLawyer

        1. Is Suffolk more likely to collapse than Pace? It is possible for schools to turn around. NYU went through massive financial difficulties during the 1970s and eventually decided to close down their Bronx campus (which was better academically than the Village campus). Now NYU is one of the largest landowners in lower Manhattan and very wealthy. NYU-Bronx closed down because of declining enrollment due to the white flight from the Bronx during the 1960s and 70s.

        2. What is the Yeshiva-esque financial emergency?

        3. I think Washington and Lee has a pretty good esteem in the South and they are far from being a third tier school like Hamline and William Mitchell.

  • PaulB

    No experience here with law school management but I’ve been in a couple of companies that were spiraling downward. This strikes me as a much too timid response. Do you really need to keep student/faculty ratio constant? Is a three year salary freeze sufficient or do you need to do something more like a 10% pay cut?

    I’m not saying this because “the perpetrators of the law school scam need to be punished.” Given the tough times facing law schools and the lack of any signs of improvement (and indeed, signs of further deterioration looking at LSAC numbers), I’d rather rip the band aid off rather than having to go back next year and have to make further cuts.

    • TribalistMeathead

      You probably want to strike a balance between “too timid” and “so severe that your current employees abandon you like rats fleeing a sinking ship,” on the odd chance you manage to pull out of this tailspin.

      • Barry_D

        “You probably want to strike a balance between “too timid” and “so severe that your current employees abandon you like rats fleeing a sinking ship,” on the odd chance you manage to pull out of this tailspin.”

        They have no place to go. The professors are not going to be hired at another law school, both because of their current school status and the fact that law schools are cutting like crazy.

        Probably they are most worried about the reaction of the people pulling the strings at the university, if it becomes publicly clear that the law school is in deep, deep trouble. People might decide that now is a good time to pull the plug.

        • Hogan

          It’s actually the university’s plan.

          The University’s senior administration, in consultation with a working group of faculty and administrators within the law school and a task force of trustees, has developed a strategic initiative that is now being implemented after being presented to the Board of Trustees at its winter meeting this month.

          • Barry_D

            “It’s actually the university’s plan.”

            I have a feeling that we’ll see lots more of that (and that much has happened, but was discreet).

            When a central university top administration realizes just what shape their law school is in, the attitudes and political balance has got to change.

        • Snarki, child of Loki

          If these dudes really wanted to survive, they should get the Koch Bros. to endow and lavishly fund an “Institute for Moops Studies” in their law school.

          Sure, they’d have to set fire to their ethics, integrity, etc….but, you know Law School, need I say more?

        • Orin Kerr

          BarryD writes: “They have no place to go. The professors are not going to be hired at another law school, both because of their current school status and the fact that law schools are cutting like crazy.”

          The lateral market is indeed really tight right now. But I don’t think “current school status” is relevant. FWIW, W&L Law prof Erik Luna was just hired by Arizona State, and I can think of others who could leave if they were so inclined.
          http://leiterlawschool.typepad.com/leiter/2015/02/lateral-hires-with-tenure-2014-15.html

          • Barry_D

            How many could leave? Also, how hard would it be to replace them with some recent grads of top Ph.D. programs?

  • Unemployed_Northeastern

    Shockingly, legal employers care about pedigree, not experiential education. I’m waiting to hear if Dear Northeastern has to undergo similar measures, seeing as their most recent entering class is barely 50% of its historical size.

  • Stan1

    This makes zero sense. Just the other day I read an article by renowned and respected SCU Law Professor Stephen “NPV” Diamond proclaiming that all is well in legal land. Why doesnt W&L just read the Simkovic paper and avoid these painful cuts?

  • Downpuppy

    According to William Peacock at Findlaw last year, the trouble started with them packing in that biggest class ever & then having bad employment results & a 24 point drop in bar passage.

    Plus, the school was riding high in the rankings, recovering from a dip that began with the recession (and purely coincidentally, my enrollment) to return to its perennial status as a mid-20s school.

    Now, after a seventeen-spot decline, it’s tied at 43. How?

    About That Class Size

    Professional poker players often talk about being able to handle the swings — from hand to hand, one’s luck can vary wildly, but over time, statistically, it’ll even out.

    W&L had a surge in enrollment last year. The following fall, the school had the most dramatic drop in class size in the country. Was it a reflection of demand? Possibly. Or was it, as Dean Nora V. Demleitner asserts in a letter sent to alumni yesterday morning, simply the school’s choice to enroll a smaller class to average out to historical norms? (The school averages about 130 students per year, and the previous high was 147 in 1990.)

    • The enrollment is probably due to Washington and Lee’s terrible yield. For the entering class of 2013 it was 12%. This year was even worse at 10%. (Offers 1011, 2014 class size 101) In addition, both their entering median G.P.As and LSATs fell considerably this year from fall 2013.

    • Barry_D

      “…simply the school’s choice to enroll a smaller class to average out to historical norms?”

      No.

  • dp

    Where does W&L feed its graduates? DC, primarily, or Virginia generally?

    • Bruce Vail

      Quite a few seem to land in Richmond.

  • Bruce Vail

    W&L Law School is the only graduate school at Washington & Lee University and the undergraduate student population is about 5X as big as the law school. They have been doing a bit of building for the undergraduate division (they aim to house all students on campus housing in a couple of years) so it appears the undergraduate division is in okay shape financially. Presumably a healthy undergraduate division can help the law school the weather the current storms.

  • ConcernTroll

    Law schools in the middle of nowhere are definitely in decline (Vermont, Appalachian, W&L). These schools are so rural they really can’t offer much in internships or the “hustling” that most students do to start their careers.

    I do like the concept of W&L’s third year of experiential learning. It has to be more useful than taking “Literature and the Law.” It’s kind of shame that their employment numbers cratered after starting this – though I doubt the two have anything to do with each other.

  • BoredJD

    I’m wondering how they are going to maintain a class size of 100 with students that can secure a 90% bar passage rate while reducing the amount of discounts (ignoring, of course, my obvious blasphemy in suggesting there’s any correlation between entering credentials and bar passage rates).

    As ichininosan put it over at JDU, it seems like the law school is promising a bunch of things it can’t deliver. How exactly are they going to conjure up an extra $1.5 mil from donors that they weren’t already getting?

  • MacK

    A few points.

    In the corporations I have been involved in that have needed to make cuts to reflect a changing market, it was recognised that the worst thing you could do was to cut too little – because this would simply lead to a new round of cuts in months to years, with severe impacts on moral. The result can be a “death spiral” of a big cut, then efforts to cut headcount through non-hiring even when say a particular type of person is needed, followed by another round of layoffs, etc.

    There seems to me to be reasons to believe that W&L plan is unrealistic. One part of that is the 2% p.a. increase in tuition plus the reduction in discounting. Tuition at W&L is already $44,000 – which may be lower than say Georgetown at some $50,890 – but it is a lot of money – moreover, part of W&L’s problem is that it has raised tuition year on year even during the law school downturn – 5%, 4.9%, 3.6%, 2.9% The mere reality that the “plan” requires an ongoing 2% tuition increase year-on-year suggests an administration that does not properly grasp its problems. Reducing financial aid also means that in real terms tuition increases will be more than 2% (i.e., discounting will be cut.)

    More significant (as a few other posters have noted) W&L has not traditionally been a school for schmucks – it is almost 200 years old, boasts a supreme court justice amongst its alumni and is ranked at 43 by the infamous US News, but until recently ranked 26, which would have put it just inside the upper 1/8th of schools. The law school is the only graduate school in what is otherwise an unremarkable liberal arts college in a small city (7,000) whose other large employer is the Virginia Military Institute. Cutting the law school in this way would have been a very tough call for the university and this suggests that things are very bad indeed – publicly announcing it also surprising.

    However, the big takeaway is that if W&L is in this sort of trouble, what about other less respected law schools? Santa Clara for example (where at least one faculty member sounds increasingly hysterical.) It seems to me that after 4 years of declining revenue at law schools, university governors have concluded that there is no end in sight, and that hard decisions now need to be made. Hence Mitchell/Hamline and now W&L. Every announced decision though starts to change the narrative from one where the smart move is to keep carrying-on and hope to outrun the bear, to one where a university administration that fails to address the problems at the law school is pusillanimous and unwise.

  • JM

    This is a good model to follow. If all law schools ranked between 20-100 cut their class sizes to around 80 new students/year then law would be closer to the medical school model, where the great majority of students are high quality and get good jobs.

    So what needs to happen? Schools need to freeze all hiring, perhaps fire some untenured professors, reduce faculty salaries by 10% and freeze them, drastically reduce administration headcount and costs, cut extraneous seminars and essentially all funding for faculty research and any other feasible cost cutting measures whithin their control. Tuition can probably remain north of $30,000 with little discounting because students will know that they are going to get good jobs.

    We have 5x as many law professors as we need in this country. Reducing faculty headcount should be the focus of change.

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