By Elizabeth G. Olson
FORTUNE -- It runs like clockwork: When businesses run into trouble, managers move to reduce salaries and expenditures. If only it were that simple for the multimillion-dollar law school industry, which is up against the wall trying to balance plummeting budgets while maintaining employees' academic freedom.
Law school deans' cost-cutting efforts are colliding with decades of strong job protections -- short of incompetence or financial emergency -- that have been granted to full-time professors. The academic ranks let out a collective sigh when the American Bar Association decided to examine whether to jettison or curb the tenure system.
It didn't take long for some 600 tenured law professors to warn that unpopular views would be stifled if tenure were diminished and have urged that any changes to the system be scotched. Many professors fear being pushed aside for cheaper, less experienced replacements.
Law school deans, meanwhile, have been remarkably silent. As leaders of faculties, they are reluctant to side openly with efforts to undercut the job security of the people who work for them.
"There's so little likelihood of this [abolishing tenure] coming to pass that deans don't feel the need to speak out," says Deborah Rhode, director of Stanford's Center on the Legal Profession. She advocates changes in tenure as part of a broader reform package in which law schools offer various levels of education and degrees and have more flexibility on the use of adjunct professors.
Any legal education overhaul, however, is likely to run at a glacial pace, and deans are acutely aware that top-notch legal educators are crucial to national law school rankings, which, in turn, attract students to their schools. At the same time, few in the tenured ranks teach the workplace-ready skills that more students are demanding as they see the low percentages of graduates finding work that requires a law degree and the considerable debt accumulated after three years of legal studies.
Foes of tenure argue that such embedded job security drives up the cost of legal education and creates a two-tier system among faculty by giving some people jobs for life and leaving others perennially insecure. Also, permanent employment, tenure opponents say, makes it more difficult for law school administrators to adjust faculty expertise and employ people who can teach skills like legal writing or data management.
In the face of sagging employment among law graduates, law schools have seen enrollment plummet by as much as 30% across the board. Few law schools are open about their finances, and many are tucked administratively into larger universities that enable their compensation practices to remain opaque. However, with such a significant percentage of law school income being lopped off, many administrators are trying new ways to balance the books.
A number of schools have trimmed back their support staff, laying off secretaries and others, and have limited the hiring of adjunct professors. Others are paring their full-time ranks with buyouts to get control of the biggest single budget item -- professor salaries, which vary widely, but are mostly in the six-figure range, according to the Society of American Law Teachers, a professional organization. Its 2013-2013 salary survey shows pay ranging from about $115,000 to nearly $190,000 at a cross-section of law schools across the country.
Elite law schools, including Yale and Harvard, pay two or three times as much, with professors earning between $160,000 and $400,000. The figures do not take into account additional benefits like summer research stipends and housing allowances. Adjunct professors and support staff, who typically are paid much lower salaries, combine with full professors to make up 40% or more of most law school budgets, and any effort to change that is rife with conflict.
New York's Albany Law School, for example, has seen its attempt to buy out eight professors erupt into a skirmish. Administrators maintain that the school's budget has been weakened on account of diminishing enrollment, and that requires reductions in top-paid personnel.
The targeted teachers, about one-fifth of the 40 full-time professors, have pushed back, saying the buyouts are a cover for eviscerating tenure protections. The faculty also hired an outside expert who found that financial distress is not forcing the elimination of faculty. As a result, the school's finances have been laid bare in public, and two dozen faculty members have appealed to the ABA to mediate the impasse -- actions that are not likely to refill Albany Law's depleted student ranks.
Budget squabbles are likely to continue, barring a turnabout in student enrollment. The American Bar Association had planned to consider an effort to revamp tenure as a condition of accreditation this summer at its annual meeting. But a parade of professors, attending an Association of American Law Schools gathering in January, spoke out against the move.
In March, the ABA Section on Legal Education got a second battery of warnings that dropping tenure would hamper law professors' academic and personal views.
Law professors are asked to "speak out about issues that engender heated debate, and to lend their expertise to unpopular causes," Theresa Chmara, speaking for the American Association of University Professors, told the council. "They must have the freedom to teach, research, and practice law without fear of reprisal," she added.
So, are law professors actually put in jeopardy for expressing their views? There are requests to censure or dismiss legal academics who espouse contrary opinions or ideas, says William Treanor, dean of the Georgetown University Law School, which employs 120 professors and some 500 adjunct professors.
"Alumni will see something one of our professors has said or written, and then call to ask about it, and sometimes complain. They're upset, but my response is that this is an academic community and we promote dialogue."
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