Law school finance follies
By 
A reporter working on a story about the absurdity of the USN college rankings called me yesterday, saying that she had heard that a law school whose identity I will keep strictly anonymous, but that is located in Tom Petty’s home town, had run up huge deficits in the pursuit of a higher USN ranking, and had I heard anything about that? And I said hell yeah I’d heard something about that. Over west side everybody know everybody right?
So I laid out some numbers for her about Damn the Torpedos Law School, and then gave her similar numbers that can be found at four other state flagship university law schools, whose identities I will also keep anonymous, but whose sports mascots are, respectively, a Hawkeye, a Gopher, a Buffalo, and warriors from the Illiniwek tribe, Illinois Confederation.
My working hypothesis is that central administrators at these fine universities decided awhile back that a relatively cheap way of chasing Prestige ™ was to heavily subsidize their law schools, since supposedly “people” pay attention to law school rankings, unlike say the rankings of the Linguistics or Aeronautical Engineering departments.
The problem with this theory is that it’s stupid and makes no sense — literally no one in the universe other than law school and university administrators, weirdo law professors, and temporarily naive prospective law students, care about law school rankings — and that universities that engage in this kind of thing will gradually realize they’re forcing the rest of the university to subsidize its law school for no good reason and plenty of bad ones.
And what do you know but this morning brought news that no less an eminence that the Antonin Scalia Law School at George Mason University, famous for its focus on Law and Economics (irony alert), has been running similarly massive deficits in the pursuit of ephemeral rankings glory, and that the university’s powers that be are fed up with this particular administrative shell game:
George Mason University’s Antonin Scalia Law School will have incurred more than $38 million in losses over five years by the end of its 2025 fiscal year, according to budget projections shared with the wider university’s board of visitors at a meeting Thursday.
The amount the Virginia-based law school is poised to lose by next year eclipses $30 million in naming gifts the school received in 2016 from an anonymous donor and the Charles Koch Foundation in honor of the late U.S. Supreme Court Justice Antonin Scalia. The financial challenges come amid fallout over bombshell allegations against a former longtime faculty member of GMU Law, Joshua Wright, who was accused by former students of sexual misconduct.
The annual losses the school has posted have increased nearly every year, from $3.8 million in 2020, to $3.3 million, $4.3 million, $5.8 million and $7.8 million in the years following. In its 2025 fiscal year, the law school is projected to lose $13.2 million. …
The wider university has made a proposal to law school Dean Ken Randall, aimed at remedying its financial needs. “The dean has been informed that the university wants to find creative ways to address the financial status of this important school,” documents included in Thursday’s BOV agenda said. Those include discharging a loan and setting aside more money to offset the school’s discounting, but there are strings attached.
“The above is contingent on the following: Going forward, the law school is held to the expectation of break-even bottom line at the end of each fiscal year given its ability to grow non-JD revenues, reduce operating costs, and/or significantly increasing fund raising. The law school should also maintain rankings,” the document said.
Of course the way the school has maintained its ranking is by running huge deficits, primarily by buying lots of high LSAT and GPA scores (see this post for an explanation of how this is done; it was worth it just to learn some sleight of hand), so good luck with the new Five Year Plan, all you “Law and Economics” experts.
No post of this type would be complete with some mention of my good friends over at the Cooley Law School, so let me note that a quick gander at their latest IRS 990s indicates that the school has lost $40 million in just the last three years, even though they drew down a third of their remaining endowment last fiscal year, which I believe among the Illiniwek is known as “eating the seed corn.” I also note that by far the highest paid person at the the place remains the former dean, Don LeDuc, who is still getting half a million per year from Cooley’s rapidly disappearing tuition stream, after running the place into the ground, although I assume these emoluments will cease when Cooley goes out of business, which event, given its current burn rate, should be in another year or three (blood, stone).
. . . Commenter Chip Daniels:
Instead of “Run government like a business” we have “Run a university like a Soviet tractor factory”.