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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, July 19, 2018

Vermont Law School's Tenured Faculty Purge And What It Portends For Legal Education

Vermont Law School Logo (2017)Following up on my previous posts (links below):  Forbes, When the Numbers Don't Add Up: Vermont Law School's Tenured Faculty Purge and What It Portends:

Vermont Law School (Vermont) recently announced it had issued pink slips to 14 of its 19 tenured faculty members. This is not the first time a law school has terminated tenured professors for something other than sex, drugs, and rock-n-roll. Albany Law School, Charleston Law, and others have traveled that road, and several other law schools have shuttered. Vermont’s wholesale decimation of its tenured faculty is something different—a clarion call to the legal Academy that its economic model is unsustainable for all but a handful of elite institutions. Students have borne the brunt of the model’s economic pain; now it’s affecting the other side of the lectern. ...

Vermont cited fiscal constraints as the basis for the tenured faculty housecleaning. The law school’s recent $17M loan from the Department of Agriculture to lower the interest rate of its existing debt is, as lawyers say, res ipsa loquitor of its fiscal extremisThe ABA Journal reported that Craig Pease, one of the sacked professors, contends that “the institution has not stated that it faces financial exigencies.” Let’s hope Professor Pease does not teach bankruptcy or evidence. While it’s understandable that he is pursuing his legal and equitable remedies (and foregoing a settlement package), his contention that Vermont fails to meet its financial exigency burden itself flunks the giggle test. That level of economic denial is all-too-prevalent among law school faculty. Vermont’s action might just be that “Thanks…I needed that” slap in the face to wake them up. ...

The unsustainable cost of law school is nothing new to students—most graduate with six-figure law school debt on top of undergrad obligations. Let’s put aside other faults one could assign to the legal Academy—doctrinally-heavy curricula, detachment from the marketplace, most faculty lacking meaningful marketplace experience and awareness of its trends, the (ir)relevance of most legal “scholarship” (noted by Chief Justice Roberts), a “one-size fits all” pedagogical model, a recent building frenzy—and focus on economics. Law school is just too damn expensive for all but the handful that can afford it and/or elite candidates who are given free/steeply discounted rides for ranking purposes. Let’s also exempt graduates of top-tier schools provided they are among a dwindling pool that land high-paying jobs. For everyone else, it’s reasonable to ask, “Is law school worth it?” Short answer: perhaps, but only if one can stomach the debt and has differentiated skillsets—technological, business, linguistic skills, etc.— to augment baseline legal knowledge.

The sad story for Vermont Law students—and thousands of others around the country—was not always this way. Net of adjustment for inflation, law students today pay 2.71 times what their predecessors did three decades ago. The job market was more promising then, too—in part because there was not a glut of lawyers and clients tacitly accepted funding on-the- job training for baby lawyers. Nor was there widespread consumer sentiment—prevalent today—that law schools do not train students for what the marketplace demands. ...

There is little cause to celebrate Vermont Law's actions even if they were long overdue. Getting sacked is a devastating jolt at any stage of one’s career  At the same time, the Vermont bloodletting puts the Academy on notice of something that can no longer be ignored: the economic model of all but a handful of U.S. law schools is unsustainable.  Students, faculty, the profession, consumers, and society will continue to be adversely affected until meaningful steps are taken to fix it.

Prior TaxProf Blog posts:

http://taxprof.typepad.com/taxprof_blog/2018/07/vermont-law-schools-tenured-faculty-purge-and-what-it-portends-for-legal-education.html

Legal Education | Permalink

Comments

Surely those profs can go back to the equity partnerships at Vault 5 firms that were promised to them after one year being an associate, just as all the VLS grads can walk into Goldman, Google, or McKinsey and become highly paid professionals.

/sarc

Posted by: Unemployed Northeastern | Jul 19, 2018 8:11:18 AM

1. Law school should be 2 years, focused almost exclusively on black letter law. If there is a real desire for a third year, it should be an internnship supervised by a member of the bar who has some (relatively easy to obtain, say a one- day CLE) certification in supervision of interns that includes a healthy dose of warning against harassment. Students in the third year should have the opportunity to sit for the bar exam during the internship year.

Posted by: Jim | Jul 19, 2018 10:39:40 AM

15-20 years ago some members of the educated elite thought the idea of leaving/avoiding the corporate rat race to live in rural Vermont close to the Canadian border and make $150k (practically more money than you can spend there) while holding a job title that at least sounds like you're doing some good for the world was an attractive proposition. The problem is that year after year they ignored what was happening with the students, and refused to acknowledge a problem until it threatened their existence. These professors who are losing their jobs would have been happy to continue milking a rich existence taking money from starry-eyed, clueless youths. I think we can safely say that they deserve their fate.

Posted by: JM | Jul 19, 2018 11:05:55 AM

There's a good rejoinder here.
http://leiterlawschool.typepad.com/leiter/2018/07/the-trouble-at-vermont-law-school-isnt-due-to-unsustainable-debt-levels-for-students-but-it-might-be.html

"When student debt levels are unsustainable, student default rates are high. But at Vermont--and at most law schools--default rates are low. . . . Vermont Law School's problem is not that tuition is so high that student debt levels are unsustainable relative to students' post graduation income and other financial resources. Rather, Vermont's problem seems to be that there are too few students, and because of aggressive tuition discounting intended to attract them, the students who matriculate are paying too little to make the school financially healthy. . . .

Vermont Law School could try to respond by offering even more scholarship, but its competitors have deeper pockets, and can outspend Vermont until it runs out of room to maneuver. Escalating a price war that Vermont will surely lose would be foolish. Degrading the quality of its education by relying on more lecturers and adjuncts risks causing a death spiral in which quality, enrollments, reputation, and revenue per student all continue to drop."

Posted by: Is Vermont charging too little? | Jul 19, 2018 11:28:18 AM

A related point that I have rarely seen discussed. Those vaunted professors with stellar credentials who forego lucrative options to teach law school...

Maybe you need that intellectual firepower at T-14 schools, and that segment is not in crisis. But for the rest of the law schools, where the training should be much more practical, do they really need professors with double Ivy degrees, or would they be better served by professors with slightly lesser credentials who have actually practiced law for a significant amount of time?

I think we all know the answer.

Posted by: Todd | Jul 19, 2018 12:48:27 PM

I look forward to the "This failing law school isn't charging enough" as a featured exhibit when the House GOP brings the PROSPER Act again, which aims to gut graduate federal student loans from "whatever schools feel like charging" to $28,500 per year - or about $65,000 less than the annual cost of attendance budget for leading law schools. You guys do a remarkable job of digging your own graves. I suspect even a nontrivial number of would-be Chicago Law students would blanch at the prospect of borrowing $180k in private student loans beyond that new federal lending ceiling and face a >$2,000/month after-tax student loan payment for decades after graduation.

Maybe there are few students because, gosh, I don't know, Vermont is the second-least populous state, the capital has 7,000 residents, what is described as the largest law firm in the southern part of the state has six (6) lawyers, and four of the seven largest employers in the state are ski resorts? What I'm saying is... wait for it... there is absolutely no need or demand for a law school in Vermont.

Posted by: Unemployed Northeastern | Jul 20, 2018 12:17:52 PM

The reason the GOP is against federal student loans is because they want to open up a lucrative market for the banks--same reason they are against the FHA and the GSEs.

Posted by: GOP against education | Jul 21, 2018 11:37:23 AM

Yes Mike,

I've been warning about that for years. Maybe law profs should stop playing into their hands with fatuous arguments like "law students really should be borrowing more money?" As I pointed out a few weeks ago when that GULC prof made a similar argument (the balance doesn't matter because IBR/PAYE/REPAYE/PSLF), if a GULC grad pays sticker, as about half do, and averages about $150k/year through their career, the actual tax hit - not the realized income, but the tax on it - when they reach loan forgiveness under PAYE will be about $150k, or the cost of paying sticker for GULC ten years ago.


As one might recall, there was a lucrative market for private student loans and their attendant asset-backed securities before GradPLUS came along in 2006 - and some of the largest default rates in all of higher education were for those loans given to law students, stretching into double digits. Ouch.

Posted by: Unemployed Northeastern | Jul 21, 2018 4:43:42 PM

The reason the Dems favor student loans is because the want to saddle students with massive debt creating another grievance class -- same reason they favor every entitlement program.

Posted by: Mike Petrik | Jul 21, 2018 7:25:48 PM

That's funny, Mike, given that the GOP is strongly behind private student loans that put people in the same circumstances. And just passed an unfunded $1.5 trillion tax cut. And hate all regulation & oversight on banks and lenders. But whatevs.

Posted by: Unemployed Northeastern | Jul 23, 2018 8:16:42 AM

@ Mike Petrik

Federal student loans are a substitute for hot-money private student loans that show up when liquidity is plentiful and disappear just as quickly. They help those who happen to graduate high school in the middle of a credit crunch created by risk taking on Wall Street and can't get private loans because of bad timing.

Dems tend to want to reduce the role of luck and misfortune in determining life outcomes.

But students will have debt one way or the other--private student loans if not federal student loans, and credit card debt if not student loans because they can't make ends meet on McJobs.

Dems actually tend to favor more public funding for education (i.e., grants) which reduces the need to borrow but increases taxes.

That's another thing Republicans resent--paying taxes to help "other people's children"--except that those other people's children will be the ones paying for their own retirement by paying for social security and medicare.

Posted by: Dems | Jul 23, 2018 10:16:08 AM

UNE,

The Republicans say student loans are bad for taxpayers because they have ulterior motives.

The reality is that student loans are great for taxpayers because the extra tax revenue on the earnings premium is high enough that it would actually make sense for the government to *fully* fund education with grants.

Any loan money that gets paid back is just gravy. But law students and other professionals actually pay back enough that the government could make a profit just on the student loans, even ignoring the taxes!

Pointing out that the Republican story is false is not playing into their hands. Going along with a false story and allowing debt to serve as a wedge issue to divide educated professionals is playing into Republican hands.

Posted by: UNE is not a good political strategist | Jul 23, 2018 10:21:17 AM

"The Republicans say student loans are bad for taxpayers because they have ulterior motives."

Yes Mike, I've been saying that for years. Sometimes you remind me of Trump saying he invented the phrase "Priming the pump."

"The reality is that student loans are great for taxpayers because the extra tax revenue on the earnings premium is high enough that it would actually make sense for the government to *fully* fund education with grants."

1) Citations missing.
2) Depending on which accounting system is being used (i.e. are they using fair value cost accounting or another system), federal loans are either wildly profitable or wildly unprofitable.

"Any loan money that gets paid back is just gravy. But law students and other professionals actually pay back enough that the government could make a profit just on the student loans, even ignoring the taxes!"


Yeah, back in the far better days before the recession some of those law school private student loans had double-digit default rates but now that law students borrow more and face a far more dire job market, I'm sure that repayment rate - note I am not talking about default but repayment, because you frequently get the two conflated - is 100%. Sure, bud.

"Pointing out that the Republican story is false is not playing into their hands."


Yeah, saying that famously indebted law students aren't borrowing enough money at a time when the government wants to cut those funds drastically is totally an awesome political strategy, so much so that you really should advocate for it IRL so we can all snicker at you and future law students know who to burn in effigy when they sign over 2/3 of their small firm takehome pay to Sallie Mae until late middl age.

Posted by: Unemployed Northeastern | Jul 23, 2018 7:56:46 PM