Baltimore Law Budget Increase Raises Some Questions

Sometimes there is a strange convergence in the way events unfold.  In Monday’s post I wrote how Senators Coburn and Boxer highlighted the situation at Baltimore where tuition increased significantly but the school retained a fraction of that money.  Their letter to the Department of Education was dated October 13, 2011.  The same day saw the University of Baltimore president Robert L. Bogomolny and Law School Interim Dean Higginbotham issue a statement committing a $5 million increase in the Law School’s operating budget over 5 years.  That’s about $923 per student per year based on Baltimore’s stated enrollment, a bit more than lunch money I would say. The text of the statement with commentary is at Above The Law.  The statement noted that the increase would keep law school tuition from rising without reducing financial commitment to other academic units at the University.   

That brings up an interesting point, and one that doesn’t get aired too much in the context of law school transparency.  If I were a law student at Baltimore I would be asking myself a bunch of questions.  One is how are my tuition dollars allocated in the greater scheme of things?  How is it possible that non-law academic units will not suffer if the law school budget is increased by $1 million per year?  Another related question is how is the overhead a University charges to a law school defined?  There is a lot of leeway in that last one.  Baltimore law professor Michael Meyerson is quoted in the National Law Journal as stating that his committee charged with reviewing the law school’s funding structure looked at budget information at 9 public law schools and found that it was impossible to make direct comparisons.

The ABA does have standards on this, specifically Standard 210:

Standard 210. LAW SCHOOL-UNIVERSITY RELATIONSHIP

(a) If a law school is part of a university, that relationship shall serve to enhance the law school’s program.

(b) If a university’s general policies do not adequately facilitate the recruitment and retention of competent law faculty, appropriate separate policies should be established for the law school.

(c) The resources generated by a law school that is part of a university should be made available to the law school to maintain and enhance its program of legal education.

(d) A law school shall be given the opportunity to present its recommendations on budgetary matters to the university administration before the budget for the law school is submitted to the governing board for adoption.

Interpretation 210-1
A law school does not comply with the Standards if the charges and costs assessed against the law school’s revenue by the university leave the law school with financial resources so inadequate as to have a negative and material effect on the education students receive.

Interpretation 210-2
The resources generated by a law school that is part of a university should be made available to the law school to maintain and enhance its program of legal education. “Resources generated” includes law school tuition and fees, endowment restricted to the law school, gifts to the law school, and income from grants, contracts, and property of the law school. The university should provide the law school with a satisfactory explanation for any use of resources generated by the law school to support non-law school activities and central university services. In turn, the law school should benefit on a reasonable basis in the allocation of university resources. 

I don’t believe anyone would suggest that a law school should not contribute to its parent institution.  But one wonders if university administrators react to law school revenues the same way as Daffy Duck reacts in a treasure cave.  There is nothing wrong with saying a law school should benefit on a “reasonable basis” in reallocating law school revenue back to the school.  It’s just that there is so much room for accounting games that can be characterized as reasonable.  Does overhead include, say, charging a law school rent for all or some of the facilities it occupies?  Would that reasonable? 

It may be impossible to compare schools based on individual practices, but those practices are identifiable.  Making them public is the next frontier of law school transparency.  I would expect a tremendous amount of resistance from university administrators.  Nonetheless, inquiring minds may want to know.  Senators Coburn and Boxer wondered.  Prospective law students may want to know as well.  [MG]