Following up on my previous post, Law Schools Are in a Death Spiral: Forbes: Which Top Law School Will Close? Follow The Money, by Dorothy A. Brown (Senior Advisor to the Provost and Tax Professor, Emory):
This has been a bad couple of weeks for law schools. Last Tuesday, Thomas Jefferson Law School won the dubious distinction of being the first law school to go to trial to defend its employment statistics. Last Wednesday we found out that the dean of the University of California at Berkeley Law School was being sued by his Executive Administrative Assistant for sexual harassment and has since resigned. Yesterday, the 2017 US News and World Report ranking for law schools was officially published. That brought more bad news: Duke is no longer top 10, and Emory and Minnesota have been bumped out of the top 20.
Last March I predicted that within three years a top law school will close and primarily focused on the failings of law schools which will lead to such action. However when we talk about closing a law school, it will be central administrators who will make that vastly unpopular but necessary call. What would a top law school have to do in order to entice University administrators to decide to shut it down? I say University administrators, because all of the top 25 law schools are part of major universities.
Primarily, the law school would have to be hemorrhaging a lot of money over a sustained period of time with no end in sight. Not just a one-time deficit, but millions of dollars in deficits over a sustained period. ... What we do know is every top 20 law school but three (Stanford, Penn, and Washington University at St. Louis) is facing a shrinking applicant pool. Yale applications are down by 13%, Harvard by 18%, Columbia by almost 25%, and Chicago by almost 20%. Fewer applicants lead to smaller entering classes with the median loss of 5%. All but two (Duke and Berkeley) had decreases in their first-year enrollment. One outlier on both measures deserving of additional scrutiny is Minnesota’s Law School. Between 2011 and 2015, Minnesota had the largest application decline of any top 20 ranked law school—at 50%. Minnesota also had the largest entering class decline—approaching 30%.
Last year the University of Minnesota Law School was tied for 20th place according to US News & World Report rankings. This year they have fallen and are in a three-way tie for 22nd place with Emory and Notre Dame. ...
Given Minnesota Law’s 50% fewer applications, it was faced with a choice: shrink class size by keeping applicant quality high (as measured by US News to mean GPA and LSAT) or maintain or even grow class size, while lowering applicant quality. The former strategy is likely to generate a deficit, due to the loss in tuition dollars from the smaller class size. The latter strategy is destined to lower Minnesota’s US News ranking because it will admit students with lower than normal GPA and LSAT scores. With the support of Minnesota President Eric Kaler, Dean David Wippman chose the former strategy.
Dean Wippman explained his strategy to cut class enrollment: “We made a conscious decision in order to maintain the caliber of the student body, the quality of education, and frankly to keep our ranking high.” That strategy led to smaller entering classes. For the Fall of 2014, Minnesota reported enrolling 180 students instead of the 220 students they had in 2013. Given that Minnesota’s ranking fell two points, you might say the strategy was ineffective. But that the 2 point drop could have been much worse. So even if Minnesota can say we are doing relatively well, the question remains at what cost?
Minnesota’s strategic decision resulted in large deficits. The extent of which recently came to light. Between 2012 and 2015, President Kaler put his money where his mouth was to the tune of $12.45 million dollars in transfers to the Law School to cover their operating losses. Between 2016 and 2018, Dean Wippman projects needing an additional $3.683 million. Then he says by 2019, he should need no additional funds. Funny thing is, in December 2015, Dean Wippman was appointed President of Hamilton College in New York. He won’t be around if his projections don’t come true.
Seventeen percent of Minnesota’s budget comes from state support—do the taxpayers know what’s going on? How can Minnesota justify spending $16 million of taxpayer supported University funds for a law school that reaches fewer and fewer first-year law students? More importantly, what about the current top 20 law schools (or those just outside)? Minnesota has pursued a strategy similar to other top law schools: Berkeley, Cornell, UCLA, and USC have first-year enrollment declines approaching 30% with Virginia’s approaching 40%. How are their finances? We don’t know.
I’m doubling down. In 2 to 4 years, a University administration will shut down a top law school and we may never see it coming.