Of Revenue and Responsibility

I think it’s fair to say that the second year of an apparent free-fall in the number of law school applicants is pretty common knowledge. Last year the national average was down about 10%. That figure sticks in my mind because my tenure as dean began towards the end of the application cycle, we at Case Western Reserve were down considerably more than that, and we had to scramble to ensure that we matriculated enough students to make the budget I was handed (and had no time to change) for the succeeding year.

But when the dust had settled, the time for reflection had begun, even before this year’s national average drop (at this writing of approximately 17%) had become apparent. (I’m proud to say that at this writing, we at Case Western Reserve are almost even with last year’s number of applications.) Reflection raised inevitable questions of what these declines meant for now, and for the future. Statistics are, after all, statistics, and it requires some intellectual perspiration to try to make sense of them.

But the universe of possibilities is not unlimited. Certainly the relative dearth of high-paying law jobs in the current economic environment has something to do with it. But that cannot be a complete explanation. After all, in the other two significant recessions during which I’ve taught, law school applications have increased. While the sample set is too small to draw firm conclusions, it does suggest that jobs are not the answer, or at least not the complete answer.

The second variable is the significant attention law schools have been receiving in the popular press and the blogosphere. Some of the accusations are overgeneralized or overblown, but we in legal education do bear some responsibility for failing to be as forthright and forthcoming as we might have been. (At Case Western Reserve, we want to be as transparent as possible. We do our best to give you all the information we think is relevant. But if you want information we have neglected to give, just ask.)

One of the persistent refrains in the law school wars has been that law schools admit too many students relative to the job market they will enter in order to enrich themselves. I have dealt, to some extent, with both of these accusations in earlier posts. I have, I believe, demonstrated the unlikeliness of law school self-enrichment, and I have been careful to show that legal education is uniquely good training for a rich and rewarding career, not just your first job.

And yet . . . . There is a sense in which many law schools may be missing an important dimension of the way their operations potentially adversely affect their students. And the decline in applications may be just the signal we need to wake up. For many years, certainly for as long as I’ve been in legal education, most law schools have had the luxury of admitting as many students as they needed to in order to produce the revenue necessary to make their projected budgets. Now, this is not to suggest avarice or fraud. It simply is to suggest that, as in any business in which demand exceeds supply, many law schools developed the bad habit of living off the fat of the land without much attention to waste or inefficiencies in their budgets. To some extent, this is especially understandable with educational institutions in general and law schools in particular. Most of our costs are fixed; tenured faculty have to be paid, libraries have to run, students must be served in a manner that eases, rather than complicates, their legal education. All this takes money.

What I do mean to suggest is that the robust market for legal education relieved us of the need to be more mindful of what we were spending and where. The current decline in applications has the virtue of forcing us to focus.

That is what I have done since confronting the decline with which I was faced upon assuming my office. And that is what our faculty has done. The consequence, at least for us, is that we have engaged in simultaneous budget cutting and class size reduction. The class of 2015, and all subsequent classes here at Case Western Reserve, will be targeted for matriculation at a number 10% lower than our past practices dictated. This will allow us to focus more intently on the students we matriculate, and have a better chance of assuring that our graduates will find meaningful and rewarding work.

In order to do this, we’ve had to examine our budget in the same manner as a for-profit business. At first glance, there was little we could cut. More disciplined analysis, including a request for zero-based budgeting from all of our departments, has allowed us to cut a couple of million dollars of fat from our budget. I stress that our charge was to cut budget without cutting program. Remember that part of the imperative to cut class size was to concentrate our resources on fewer students in order to improve their experience. And indeed we are building program even as we cut our budget.

How? Creativity and discipline. That mother of invention, necessity, made us more responsible with respect to our expenditures, leading to a diminished need for revenue, and thus a more socially conscious path to educating fewer lawyers. It’s time for law schools around the country to make hard choices.