News release here. This was expected, and is, in fact, wonderful for the University: if anyone will move Texas into competition with the three state universities that are presently stronger (Berkeley, Michigan, and UCLA), it will be Bill Powers. Of course, this also means the Law School will be joining the ranks of schools searching for new Deans this year.
UPDATE: US News, as I've remarked (see footnote 5), has done even more damage with its college rankings than its law school rankings, in terms of how it has affected the public perception of academic institutions. One indication of that is that my absolutely banal observation, above, that there are only three state universities better than UT Austin (namely, Berkeley, Michigan, and UCLA) provoked several student correspondents to express wonder at this claim. Of course, qua undergraduate experience, other state universities may indeed offer better experiences (the undergrad student/faculty ratio at UT is bad), but law students are graduate students, and qua research and graduate universities, the claim is not controversial. That a generation of undergraduates may have been led to believe that, e.g., Virginia, Vanderbilt, and Georgetown are even competitive with Texas (or Illinois or Wisconsin) really is quite remarkable, at least to anyone who knows anything about American research institutions. As luck would have it, the Times Higher Education Supplement has come out with their 2005 rankings of universities around the world (which actually suggests that only Berkeley is better than Texas, which strikes me as not right), which presents a good occasion for considering this question, which I'll take up before long. (Note: you can register for a 14-day free trial to access the THES rankings.)