Following up on my previous posts on the turmoil surrounding Florida's graduate tax program (here, here, here, and here), I received this remarkable 24-page hard-hitting letter about the program by Robert J. Rhee, John H. and Marylou Dasburg Professor of Law. The letter arrived in an email directly from "Faculty Copier #2" along with an anonymous note stating that "the law school has never been in more disarray." The sender claimed that he/she obtained the letter through the Florida sunshine law (the Rhee letter concludes "[p]lease note that since this letter is written for the benefit and in furtherance of law school business, it is subject to the Florida 'sunshine' and record law"). Here are some excerpts from the letter, followed by a response I received from Dean Laura Rosenbury for publication on TaxProf Blog:
I provide my thoughts on the UF Law Graduate Tax Program ("the UF tax program"). ... In Part I of this letter, I provide an assessment of the tax program as it currently exists. In Part II, I provide some thoughts on what the program should look like going forward in the future.
I. PRESENT STATE OF THE TAX PROGRAM
Evaluating a program, and law schools for that matter, is not that hard. The major factors of quality are: (1) strength of student body, (2) graduate job outcomes, (3) quality of faculty, (4) fiscal soundness.
A. Student Enrollment ... [W]ith a 32% decline in applications and a 10 point increase in the acceptance rate to 79% [since 2011], the tax program has gotten less selective in student admissions. If there are fewer applicants and a greater acceptance rate, the inescapable conclusion is that the quality of the pool must have sharply declined over these six years.
B. Student Credentials ... [T]he tax program's student bodv credentials are "mixed" at best.
C. Explanation of Student Enrollment and Student Credentials ... There are two reasons why enrollment and student credentials are declining. The first is the general decline in legal education. The decline has ripple effects on LLM enrollments, and the tax program is not immune from larger market forces.
The second, and larger problem, of declining enrollment and student credentials is attributable entirely to the unique facet of UF Law's tax program. From the perspective of simple economic analysis, the UF Law tax program is the most expensive LLM program in the country for high quality candidates. ... The full-time residency requirement of the UF tax program makes the degree economically more costly than those at NYU and Georgetown for high quality candidates. The UF Law product is uncompetitive at the top end of the student market. ... [T]he UF tax program has positioned itself at the bottom end of the market relative to schools like NYU, Georgetown, and Northwestern. The program fails to compete.
D. Job Outcomes ... We do not have systematic historical data on graduate job outcomes because, again, the tax program did not keep track of student job outcomes. ... Professor Lyrissa Lidsky, who is now very ably overseeing all graduate programs, has begun to compile systematic data on job outcomes. The 2016 employment data (as of August 15) of graduates show that not all students have found employment.
The highest paying, most prestigious job outcomes are with big firms. Only 31% of students got these jobs. The largest category of big firms is the Big Four accountancies and others firms like Grant Thornton and BDO. A few students also secured jobs with Big Law firms. The best students are getting good job opportunities, but they are only a minority. The job data fairly overlaps with student credentials (strong incoming students tend to get good jobs). Another 21% of graduates got jobs in small law firms; most of these firms have fewer than 20 attorneys. These job are lower paying.
E. Size of Tax Faculty and Its Cost on UF Law The tax program loses money for UF Law, and its fiscal model is unsound. Before analyzing the financials, we must examine the size of the tax faculty because the salaries of tenure-track faculty constitutes the single largest expense item in a P&L (profit/loss) calculation. Currently, there are 8 tenured tax faculty. There are 44 tenure-track faculty. In academia, "tenure-track" means research faculty, professors who are expected to do serious and substantial academic research for the award of tenure. The tax faculty constitutes 18% of UF Law's tenure-track faculty.
I have calculated the ratio of tenure-track tax faculty to total tenure-track faculty for all public schools ranked 1 through 50 (the 1st tier) by US News — a total of 28 schools in the US News top 50 law schools. This includes elite public law schools: California, Michigan, Virginia, Texas, and UCLA. These 28 schools are Florida's peers and aspirational peers. ... [I]rrespective of the size of the law school — the tax faculties as a percentage of the total faculty are about 5% with a 2% standard deviation.[W]ith a tax faculty constituting 18% of the faculty, UF Law is more than 6 standard deviations away from the mean. The size of the tax faculty makes UF Law an extreme outlier. UF Law issingularly unique and out of step with all public peers, including elite publics, in the first tier of the US News ranking. The size of the tax facultv has outsized impact on the financial soundness of the UF Law tax program.
F. Tax Program Financials and Subsidization by UF Law ... Rational, smartly operated schools design LLM programs to make money. Such peripheral, non-JD programs are not supposed to be subsidized by the JD program. In the case of Florida, there is a large LLM program that continues to run deficits and is subsidized by the law school. The bulk item subsidized is the size of the tax faculty.
G. Tax Faculty and Legal Scholarship Another aspect of the quality of a program is faculty productivity. The tax faculty, as a group, does not add to the scholarly prestige of UF Law, measured by the scholarly production and recognition of its faculty by peers. ... Scholarly prominence can be empirically measured in two ways: (1) production of scholarly work including prestige of the placement, and (2) citations to the works by others. ... With respect to the second measure, ... UF Law ranks #52, which is lower than Florida State (#39). ... What accounts for the underperformance of the UF Law faculty in this closely followed study of faculty quality? ...
Using the same methodology in the Sisk study, we can measure the average and median citation counts for the UF Law faculty that closely mirrors the Sisk results. Based on this replication effort the following are the citation data for the UF Law tenure-track faculty, the non-tax faculty, and the tax faculty.
In this measure, the tax faculty underperforms the non-tax faculty by about 30-40%. Given the unprecedented size of the UF Law tax faculty (which is singularly unique in the legal academy), the impact of this underperformance has a material effect on our ranking. Based on the Sisk methodology, if the ranking was based on the performance of the non-tax faculty (or if the tax faculty had kept up with the non-tax faculty), UF Law would have been ranked about #47, which is consistent with our current US News law school ranking of #48. It would also better align UF Law to its closest competitor (Florida State) for the mantle of the "flagship" public law school.
[Fn.: Professors Martin McMahon and Karen Burke are clearly nationally recognized, leading scholars in their field. However, the data is clear that on a group basis, the tax faculty is not a prominent group of recognized scholars in the field as measured by citations to their works. ... See Appendix B for calculations of citation counts for each faculty member.]
I am pained to note this negative information pertaining to colleagues. However, when discussing the problems in the tax program we should confront uncomfortable facts unflinchingly. Furthermore the source of much of faulty or incomplete information that have been disseminated to alumni on a broad basis have come from certain member or members of the tax faculty. A public campaign has been waged. Alumni were used to influence in a backchannel way faculty governance on important academic programming matters. In my view this is an abuse of proper faculty governance, and strong academic institutions with core academic values do not have these kinds of dysfunctions. In light of this circumstance, it is important to present all facts.
H. US News Tax Ranking in Perspective I comment briefly on the US News ranking since the tax program and the tax faculty benefit so much from the halo of the #3 ranking. First, no serious legal academic, administrator, or alunmi will dispute that the most important ranking is the US News ranking of law schools. The law school ranking is first and foremost.
Second, specialty rankings are peripheral. A review of the top ranking schools in the various specialty programs shows that schools ranked for their specialty program are a mixed bag. There are top ranked specialty programs associated with 2nd and 3rd tier schools. Specialty rankings have little effect on the law school's overall prestige. Law schools that overly touts a specialty program is often correlated with weakness in the school either in low law school rankings or a lack of other distinguishing features. The benefit of specialty program ranking is principally marketing at the generic level. ...
The US News methodology for ranking specialty programs is not a serious method for assessing a program's quality. Unlike the law school rankings, it does not directly assess: (1) student credentials, (2) job outcomes, (3) faculty quality. It is a straw poll beauty contest. If you have 7 or more faculty in the field in your law school, your program will be ranked by US News. When I joined UF Law in 2014, the law school had 12 tenure-track tax professors. Presumably they voted.
II. FUTURE DIRECTION OF THE TAX PROGRAM
Data and evidence show that UF Lavv tax program has problems with students, jobs, faculty, and finance. These problems threaten the continued viability of the tax program and adversely affect the entire law school. The economics of the program does not work, and its educational and businessmodel is broken. The program has not been well managed or planned, though it has been run fairly autonomously, prior to the arrival of Dean Rosenbury. The Florida Alumni Tax Advisory Committee has been asked to provide her advice. I provide my thoughts on the future of the tax program.
A. Understand the Potential Pool of Students The full-time residency program is a dead business and educational model. It targets only the lower end of the applicant pool. It makes the total economic cost more costly than NYU or Georgetown for better qualified candidates. These economic dynamics have apparently escaped notice by the tax program, which has been managed the program autonomously until the arrival of Dean Rosenbury.
The only way to expand the potential pool of applicants to the greatest degree is to offer both an online and part-time programs. A bigger pool would increase the probability of improving student credentials. Obviously, better students would improve job outcormes. The formula is simple: Higher quality inputs means higher quality outputs. Currently, data on student credentials and job outcomes overlap consistently.
Over the years prior deans have tried to get the tax faculty to move to online, but nothing ever came of it. The resistance to online may reflect strong views of how graduate programs should be taught, the need of some perhaps to court law students and alumni as the raison d'etre of a tenured academic career, or some other reasons. However, the world has moved on from the 1970s and 1980s ... Quite clearly, the University of Florida, which has ambitions of national preeminence and international stature, has robust online programming and is keenly interested in exploring online initiatives. Quite clearly as well, leading national programs in tax LLM, such as NYU and Georgetown, have robust online programming. The continued resistance to online and part-time by the tax faculty is inexplicable.
If the program does not move to online and part-time, my educated guess is that the program will peter out or close due to lack of students, poor job outcomes, and financial mess. If student quality continues to decline, UF Law would be ethically required to shut down or slash the program, lest it engage in an unsavory "cash grab" from vulnerable, weaker students (something we see in some low quality 3rd and 4th tier schools today). The goodwill of the program may decline at an amortization rate of 25%. There may be no real program in 4 years. If the program continues to decline or shuts down, it would not be through decanal fiat, but through market forces. Student quality and job outcomes will determine its fate, regardless of how many tenure-track tax faculty remain at the podium. There is not a supply problem; there is a demand problem. The belief that hiring more tax faculty to man podiums is the answer to the demand problem is like hiring more sailors to man the Titanic once it has hit the iceberg.
[Fn.: The "iceberg" here is the crash of the legal education market starting in 2011, and the failure of the tax program to address a series of significant interconnected problems: (1) declining applicants, (2) declining job opportunities, (3) increased competition from other schools creating L LlVl degrees for revenue augmentation and fiscal deficit plugs, (4) rapid move of competitors to move to the online space for non-JD programs including the two clear national leaders in graduate tax programs NYU and Georgetown, (5) failure to understand the relationship between the full-time residency program and the program's value proposition. In light of clear evidence of these market forces at work in the past 6 years, the failure of the tax program to engage in strategic planning is inexplicable. Perhaps the complacency was founded on confidence found in an insubstantial US New ranking of a specialty program.]
B. Understand the Central Purchasing Agent Model A move to online would change the role of the law school and the faculty. The faculty would still teach courses, but the law school and the faculty also would become the central purchasing agent of course content. This means overseeing quality of adjuncts and visiting professors hired to deliver content. The notion of a "central purchasing agent" may sound foreign in an educational setting, but it is a relevant business idea. In addition to the role of the chief counselor, the principal managerial function of a corporation's general counsel is to manage the purchase of external legal services. This business trend along with broad technological changes is at the center of the disruptive changes in the economics of the legal profession. Schools like Georgetown and NYU have recognized these changes and implemented the idea in their programs.
To do this function well, it will require concerted effort from the administration, a new director of tax who bring real business skills (most likely in a "professor of practice" role rather than a research-oriented tenure-track role), and at least the non-resistance of existing tax faculty.
C. Understand the Different Kinds of Faculties and Their Roles It is clear to me that, if UF Law continues to have a tax program, there should be two kinds of professors. The first is the traditional research-oriented tenure-track faculty, who has the principal job function of doing significant scholarship that enhances the scholarly reputation of the tax program and UF Law. It makes no sense to hire tenure track faculty members on the basis that they can teach certain courses irrespective of scholarly potential, which has been the tendency I have observed in the faculty appointments process, However, elite and academically-renown institutions hire tenure-track faculty on the principal basis of scholarly potential.
The second kind of a professor is a "professor of practice," which is not a tenure-track position. The legal academy is increasingly creating this kind of a role, including NYU and Georgetown. A professor of practice would have little research obligation, but would be hired on the basis of technical, practice-oriented knowledge base and the ability to teach courses at high level of proficiency and cost effectiveness.
The new director of ta.x may be in the mold of a professor of practice. His or her principal job function would be to manage all operational aspects of the tax program, which is a large undertaking. This means overseeing online efforts, including hiring qualified adjuncts, visiting professors, and vendors. It also means enhancing relationships with major recruiters across the country and promoting job outcomes for students. Real marketing skills are needed. Marketing skills is not the same thing as the ability or desire to schmooze students and alumni. A director of a tax program should have substantial professional work experience or be a recognized thought leader in the field so that when he or she is meeting with the hiring managers of Ernst & Young, PricewaterhouseCoopers, or a Big Law firm in New York, DC or Chicago, he or she is credible. In my view, someone who has no practice experience or, alternatively, is not a thought leader in the field would be unqualified. Tenure-track faculty would not ordinarily have the combined business and marketing skill set, and if they are research oriented (as they certainly should be in a research university) they would not want this kind of a job. Finding the person with the right skill set will require a national search and may take more than one try to get it done.
Going forward, any new tenure-track hiring in tax should be a hire that enhances or has the potential to enhance the academic reputation of UF Law. If candidates do not meet this standard, they should not be hired.
D. Understand the Proper Role of Alumni Let me directly address an elephant in the room. It is no secret that many alumni from the tax program have personal rela tionships with their tax prof essors. The recent campaign by tax alumni to influence the administration does not happen organically. It was organized from within. The work of the Florida Alumni Tax Advisory Committee, I believe, is at the institutional level, and not at the personal level of loyal surrogates of former teachers and friends. The latter would circumvent proper faculty governance and would be divisive and harmful in deep ways, both to the law school and the tax program. It would diminish the committee.
It is highly unusual that alumni would actively inject themselves into matters of faculty and university internal affairs, short of becoming direct and substantial benefactors in mutually agreed upon philanthropic endeavors which are so vital to advance the mission of higher education. An alumni base is an extremely important part of any university, but no serious, credible academic institution governs itself through alumni democracy. This is no disrespect to alumni, but their role does not include matters within the province of faculty and school governance. It would cut against fundamental academic and university values. Having earned a diploma from a school does not grant management rights therein. I am an alumni of fine institutions myself, but I would not presume to involve myself in the internal affairs of my alma maters, or tell their fine faculties and administrators how to manage their schools. For pragmatic starters, it would be pretty na ve of me to believe that I know enough about the University of Chicago, George Washington University, and the University of Pennsylvania to think that I could tell the faculties and administrators there how to run their schools notwithstanding having been a student there and now a professor of law and business here. Nor does the fact that I have achieved some professional standing change matters as to whether I have earned some inherent self-appointed management rights at my alma maters. My alma maters have done well enough for hundreds of years without the type of alumni input we see here in this instance.
Dean Rosenbury has decided to constitute the Florida Alumni Tax Advisory Committee in a pluralistic effort to figure out solutions to a troubled program. When alumni, fed with faulty and incomplete information, begin a public campaign and debate on a matter of faculty governance, they force a public discussion of the declining state and peculiarities of the Florida tax program. One has to consider whether this is a good thing for the tax program. Dean Rosenbury's decision to constitute the committee is pragmatic in light of the damage done directly to the tax program by those who started this campaign. The quality of the committee's judgment and service depends on whether the board can exercise independent judgment for the best interest of UF Law. An alumni committee is an advisory committee. It is not a decision-maker. Excepting the patronage of philanthropic endeavors that grace higher education, the faculty and the administration decide matters of academic programming. To believe or act otherwise would not be helpful.
I hope that you will assist in good faith the College of Law in assessing and reimagining a tax program that looks forward in changed economic, professional, and educational environments. Quality thin.king is required. Dean Rosenbury and her team, including Associate Deans Mashburn and Lidsky, have my complete confidence in their competence, which is needed to fix the tax program. If they are supported in their efforts in good faith, the tax program will likely improve. Deadlock is never good for business. Over a long term, the program has declined. In the intermediate term, legal education and the legal profession have confronted disruptions to their business models. The tax program did not respond or engage in forward-thinking succession planning. The program was troubled and declining long before Dean Rosenbury stepped foot in Gainesville in fall 2015 just over a year ago.
At my request, Dean Rosenbury provided this comment for publication on TaxProf Blog:
UF's graduate tax program is consistently ranked by our peers as one of the top programs in the country, and we are committed to maintaining and strengthening the program. I did not commission this report, but I welcome input from all faculty members on matters affecting the law school. Data like this will be crucial in developing our strategy going forward. Because there are multiple ways to develop and situate the data, I look forward to hearing the perspectives of other faculty members and the broader tax community.
Jeff Harrison (Florida), UF TAX PROGRAM: Messenger Beware:
Over on on tax prof blog Paul Caron has dropped the bomb as far as UFs LLM in tax program. He has published excerpts from a very thorough report by my colleague Rob Rhee. The news is not good. If I hang out the dirty laundry of UF Law, Rob has more or less uncovered a nuclear waste site. Since I am always a cynic especially when it comes law professor reports and while I trust Rob and sincerely believe the program is in many ways caught somewhere is the 1950s, I also think the quality of what the program did in its prime was unmatched. So I am not in the mob that evidently thinks law professors should not speak what they see as the truth. Nor am on the side of those who think the Program is dead or [should] have its plug pulled.
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