Law school dean threatens to summarily fire faculty who don’t accept buyouts or doubled teaching loads

Paul Caron quotes an anonymous source “close to the situation” as they say:

New England School of Law plans to eliminate 14 fulltime faculty positions by August 1, 2014. Depending on how one counts, this is about 35-40% of the regular faculty. . . . Faculty have been told by Dean John O’Brien that these 14 positions will be eliminated according to the School’s needs, regardless of tenure or seniority. An incentive plan has been offered to senior faculty and certain clinical faculty, but those who don’t take it have been threatened with termination. Their decisions must be final by the end of the Fall term. Those who still do not comply or were not offered the plan, were told that if they remain, their workload during the next academic year will move from 2 to as much as 4 courses per semester and that they will be required to be at their desks from 9 to 5 each day of the work week or an equivalent time period if they are teaching evening classes.

(I asked Caron how confident he is in the source’s reliability, and he replied “100%.”).

Background on John O’Brien here, here and here.

A look at New England Law School’s tax filings for fiscal year 2012 reveals that as of a year ago NEL was making money faster than Whitey Bulger’s favorite bookmaker. The school reported $36,433,664 in revenue — almost all in the form of tuition — and only $25,786,924 in operating expenses (I’m subtracting tuition discounts from both the school’s nominal tuition revenue and its nominal expenditures), thus yielding an operating surplus of $10,646,740, or what a for-profit business would describe as a profit margin of 41.3% (NEL is of course a charitable institution, and thus its excess revenue over expenditures is not subject to taxation).

Despite this enviable financial success, Dean O’Brien — by reputation a modest man, always willing to listen to reason — actually took a pay cut, allowing the Board of Trustees to reduce his total compensation from $867,356 to $865,397. The school’s endowment grew as well, from slightly less than $55,000,000 to over $65,000,000. Other investments, not formally part of the endowment, totaled nearly eight million dollars, and this, plus the value of the buildings and land owned by the school, pushed the institution’s total assets minus liabilities from $86.6 million to $96.6 million between fiscal year 2011 and 2012.

In other words, Dean O’Brien’s operation is — or was as of 16 months ago — absolutely rolling in dough. So why is he trying to fire more than third of the faculty, while forcing the rest to work under conditions that, if actually implemented, could come to resemble those endured by people subjected to the requirements of full-time employment?

Part of the answer is that, in the wake of the Boston Globe’s January story, the school’s enrollment crashed, going from 450 matriculants in 2012 to 243 in 2013 (These numbers include both full-time and part-time students. I obtained the latter number from the school). This decline is not quite as precipitous as it sounds, since the average class at NEL over the five years prior to 2012 was just under 400, but it’s still obviously quite severe, for a school that, according to its tax filings, obtains nearly 95% of its operating revenue from tuition (Inquiring minds might want to know why a school with around $75,000,000 in liquid assets spent a grand total of $606,910 in FY2012 from investment income on its operations).

On the other hand, we don’t know how much NEL had to fork out in “scholarship” money, i.e., tuition discounts, to reel in those 243 intrepid souls.

Still, it’s remarkable that what until 15 minutes ago was pretty much a money-printing machine (although admittedly one whose primary social function at this point seems to be to turn John O’Brien into a millionaire many times over) should suddenly be in such financial distress that O’Brien is reportedly on the verge of firing more than a third of the faculty, while forcing the rest to show up for work on a regular basis.