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Economic Downturn Continues to Hammer Law Schools

Friday, January 16, 2009 11:15 AM - By Elie Mystal

Will Work for Food 2 Above the Law blog.JPGKaren Sloan over at the National Law Journal has an interesting report on how the economic crisis continues to cause pain to the nation’s law schools:

Instead of an expected 1% budget increase, the dean of the Temple University James E. Beasley School of Law learned that she would need to cut about 2% of the budget for the current academic year. The reductions were necessary because the Pennsylvania government — facing a major budget shortfall — was preparing to cut funding to the university by more than 4%.

Great. Just when the declining legal market might suggest (ahem) a reduction in law school tuition costs, budget shortfalls make it almost certain that legal education will remain ridiculously expensive.

And if public schools are feeling the pinch, you best believe that private schools are crying tears of poverty all over your tuition check for this semester. More after the jump.

The NLJ reports that the crisis might actually be worse for private law schools:

Those schools generally rely more heavily than their public counterparts on income from endowments to pay for operations, and the nose-diving financial markets have hit endowments hard. For example, Harvard University’s $36.9 billion endowment has fallen 22% since the summer, while Yale University’s plunged 25% to $17 billion during that time.

University of Chicago Law School Dean Saul Levmore said reliance on funding from endowments varies, but generally makes up a quarter to a half of the operating budget at private schools. Considering that many endowments have lost between 20% and 40% of their value, schools will likely need to make cuts, he said.

The worse it gets, the more difficult it will be for middle class and poor students to attend premier law schools:

Levmore, the University of Chicago law dean, said one major unanswered question is whether budget cuts will lead to a smaller pool of financial aid for law students.

That issue looms largest for private schools, which use attractive financial aid packages to woo students. Financial aid is the fastest growing expense for law schools, Levmore said, and a reduction at one school could set off something of a chain reaction among peer institutions. The University of Chicago Law School has not made any determination about its financial aid awards for the next year, Levmore said.

I’ve said this before but I’ll say it again: I feel really bad for the class of 2011. But the class of 2012 is just not paying attention.

Law schools dealing with budget cuts [National Law Journal]

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