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Chemerinsky’s folly

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Erwin Chemerinsky has a theory, which is his.

His theory is that it’s impossible to provide a good legal education at any less than the astronomical prices currently being charged by American law schools, including his personal vanity project, the University of California-Irvine, of which he is the first dean. To wit:

There is no solution to the high cost of legal education.

Chemerinsky’s goal when he started UCI wasn’t to solve that particular problem. Far from it: instead he intended to create a “top 20” law school. To that end he has spent a fortune hiring high-priced faculty talent, including most notably himself and his wife — a dynamic academic duo that was pulling down $600,000 in direct comp alone from the school in 2013. (Several other UCI law faculty are making close to or more than $300,000 per year).

In pursuing this precious ranking, Chemerinsky apparently convinced the school’s central administration to, for the moment at least, keep the school’s entering classes very small, in order to bolster its matriculants’ average entrance credentials: Indeed, after admitting classes of 119 and 126 in 2012 and 2013, the school ratcheted back to a class of just 89 this past fall, meaning that in its sixth year of operation UCI’s total enrollment is still just 326 students (when he started the school Chemerinsky indicated the plan was to have a school of about 600 students).

Meanwhile, Chemerinsky’s hiring binge has continued unabated: the school is now up to 43 full-time faculty — a 50% increase from just two years ago.

All this means the law school must be currently losing a whole lot of money. How much? Well those 43 faculty are costing the school close to ten million per year in salary and benefits, which means the school’s total operating costs are probably well more than double that, since you’ve still got to pay for non-faculty personnel, physical plant costs, library costs (the school was spending nearly two million per year on the latter item alone a couple of years ago), and the school’s share of the university’s indirect operating costs (that is, university-wide costs not incurred directly by individual academic units).

Meanwhile, how much tuition revenue is the school pulling in this year? UCI is playing the new favorite game of many a financially troubled law school, which is to charge crazy high sticker tuition, but then offer deep discounts off that number to the vast majority of students. Indeed almost 90% of students last year were getting discounts that averaged nearly $25,000 each, and that number is unlikely to have gone down, given how desperate Chemerinsky was to buy another entering class with high LSAT and GPA numbers (critical to the rigorous scientific method of the USN rankings system).

So those 326 students are probably paying an average effective tuition rate this year in the mid to high 20s. Let’s say $27K per capita. That’s $8.8 million dollars. UCI was given $20 million by real estate mogul Donald Bren to found the law school, but that money has probably already been burnt through in large part to buy the school’s first few classes (the original class paid no tuition, and subsequent classes paid, and continue to pay, drastically less than list price). Of course the school has no endowment to speak of beyond that original nest egg, nor is it getting anything in annual giving from its as yet almost completely hypothetical alumni base. So that pretty much exhausts the sources of law school revenues (grants and contracts, so critical to the funding of academic departments which do work that the outside world is actually willing to pay for, remain rare in legal academia).

UCI made its debut in the rankings today, tying with several other schools for the #30 spot, i.e., a very long way from the elite zip codes of “top” law schools, and still a good ways down the road from its sub-elite local competitors UCLA and USC, which are perpetually in the 15-20 range.

Always the advocate, Chemerinsky pasted a smiley face on this outcome:

“I am very proud of UCI Law’s accomplishments in building a top law school in only six years,” said Dean Erwin Chemerinsky. “We have so much to be proud of thanks to the hard work of faculty, administrators, students, alumni and supporters, both on campus and in the legal community. We are so grateful for the generosity and support we have received in building the University of California, Irvine School of Law.”

Dean Erwin Chemerinsky continued: “I expect that we will rise significantly in U.S. News rankings in the years ahead.

As a friend notes, the problem with this kind of thing is that the battle for rankings is unrelenting. Chemerinsky must have convinced the UCI administration to let him run the school at huge loss to this point, on the basis of the promise that he would get it into UCLA/USC territory, at which point they could expand to 600 students and charge $40K per year in effective tuition, rather than offering most of the class massive discounts.

Well he didn’t make it, and now he’s got a big problem, which consists of those 43 very highly-paid faculty, none of which are ready to get pushed out via buyouts (the preferred cost-cutting strategy of schools losing a lot less money than UCI is losing right now). If the class is expanded by cutting matric entrance numbers, that will also hurt the school in the rankings, so it’s all a Catch-22.

UCI’s central administrators are probably experiencing severe buyer’s remorse right now, but they are getting no more than they deserve for buying into the idea that what the utterly saturated California legal hiring market needed was yet another “prestigious” law school.

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