A Message to the Law School Community The Strategic Transition Plan

To: The Law School Community

From: President Kenneth P. Ruscio

Date: February 9, 2015

I write to update you on the Board of Trustees meeting last weekend and the discussion related to the School of Law.

As you know, the trustees appointed a task force about a year ago when it became apparent to everyone that the legal profession was adapting to a changing environment and legal education would have to adapt as well. Rather than passively react to the challenges, the trustees rightly wanted us to think through how Washington and Lee's School of Law would systematically and strategically respond. That effort has required patience and hard work on the part of the trustee task force, chaired by Michael Missal '78, and then additional work most recently by a campus working group consisting of Vice President for Finance and Administration Steven McAllister, Provost Daniel Wubah, Associate Provost Marc Conner, Law School Dean Nora Demleitner, Associate Dean Sam Calhoun, and Professors Michelle Drumbl, Christopher Bruner, Brant Hellwig, Brian Murchison and Jim Moliterno.

Working within the parameters established by the trustee task force at the October 2014 board meeting, this campus group crafted a detailed multi-year plan, which was presented to the trustees last weekend. We will now begin to move forward with that plan.

Before describing the plan, I'll offer a few background comments and details about the years ahead.

There is no question that the environment for legal education has changed dramatically. Law school enrollments nationally are at their lowest level since 1976, when there were about 50 fewer law schools than there are today. Since 2010, new student enrollments in law schools nationally have fallen 28 percent, and applications were down 37 percent for the class that entered last fall. Job placement rates have declined nationally, and student indebtedness has increased.

Washington and Lee has not been immune from these challenges. In 2010, we had 4,582 applications. Last year we had 2,338 and this year we will likely see even fewer. In order to preserve the quality of the student body, we have enrolled significantly smaller entering classes in the last two years and will again this year. The classes that entered in 2013 and 2014 were 111 and 100, respectively, compared with our recent historical norm of about 130. We currently anticipate that lower figure to continue for the coming fall and beyond. At the same time, we increased the financial aid budget so that we could make competitive offers to attract the best-qualified students. As a result of all these national trends, our enrollment will decrease from an average of about 415 over the past five years to about 300 when classes begin this fall.

Lower enrollment and more aggressive financial aid yield significantly reduced net revenues. In 2012, net tuition revenue was $11.06 million and peaked in 2013 at $12.23 million due to the unusually large entering class. This fall, we project net revenue of $8.16 million. We do not believe this is a temporary situation for either legal education in general or Washington and Lee specifically.

The goal of the plan is therefore to adapt to this new environment while preserving the School of Law's special characteristics. These include our student-centered education. W&L has historically been known as a great teaching law school, and with good reason. We remain committed to our tradition of academic innovation, including the third-year curriculum that provides invaluable preparation for the legal profession and has garnered well-deserved praise. We also remain committed to the distinction of having a single graduate professional program in a nationally recognized undergraduate liberal arts institution.

The question before us has been how to adapt while remaining true to the mission that has set our School of Law apart.

The working groups proposed a three-year transition to a new configuration to respond to this new environment. To make up the revenue shortfall during the transition, the trustees authorized additional allocations from law school resources, including its endowment and selected reserve funds. Those additional allocations will provide approximately $3.4 million per year for the next three years with a gradual return to historical rates of draw-downs. The goal is for the law school to be financially self-sustaining by 2018.

This plan anticipates an enrollment of about 300. Our historically favorable student-faculty ratio will remain the same, which means a reduction in the number of faculty. We believe this can be achieved through natural attrition that will result from not filling positions that come open through either retirements or departures. It means also reductions in operating budgets, including perhaps lower levels for some operations that had come to be taken for granted, such as professional travel and development.

An outline of key features of the transition plan is available here. We still have a lot of work ahead. The assumptions in the plan are carefully considered, but undoubtedly there will be adjustments as the coming years unfold. Continued declines in applications nationally and for us could alter the plan. Unanticipated low returns from endowment could also affect the plan. There are other uncertainties. This plan helps us address the dynamic and somewhat unpredictable environment of the next few years, while addressing the factors most directly under our control. Those efforts have already started as evidenced by the School of Law's strong results in recent bar passage rates and job placement.

The plan is realistic and achievable, but only through the continued commitment, loyalty and hard work of all members of the community - students, faculty, staff, trustees, alumni and friends.

I know the last few months, and perhaps the last couple of years, have been challenging for everyone in our law school. I appreciate the patience of everyone and the extremely hard work of those who have been intimately involved in developing the plan.

In the next several years, our law school - like the legal profession itself - will exist in a different environment. Though it may look different than what we have become accustomed to, the School of Law will remain a defining feature of Washington and Lee University.

I personally look forward to the work ahead.