Tuesday, December 17, 2019

Other things to think about if you have multiple tenure track offers (Michael Simkovic)

Brian Leiter has an extremely helpful post about things that entry level candidates should think about when they receive a tenure track offer.  The post below is meant to supplement Brian’s post with additional considerations that are relevant to candidates who are fortunate enough to receive multiple tenure track offers.  It may also be of interest to tenured faculty who have offers to lateral to another institution, and to those deciding between a research faculty position and an outside option such as private practice or public service. 

The institution where you start your academic career as a faculty member is most likely where you will end it, if you are fortunate enough to earn tenure.  Only around 1 to 2 percent of tenured law faculty members per year move between institutions.[1]  It is also relatively rare for academics to return to the full-time practice of law after years in the academy.  Every job move is a high-stakes decision, because every move will most likely be your last.

Summary:

  • Check the Institution’s Financial Condition and Creditworthiness
  • Consider the Institution’s Commitment to Research
  • Consider the Institution’s Competitive Position
  • Consider your Colleagues
  • Consider both the Cost & Quality of Living
  • Consider the Ease of Expected Travel

 

Check the Institution’s Financial Condition and Creditworthiness

Tenure is not an iron clad guarantee of future employment.  Tenure is only as good as the financial strength of the educational institution that stands behind it. Moreover, important considerations like research funding and the availability of raises (or even COLAs) are likely to be a function of the financial position of the institution as well as your own performance.

There are two helpful external sources you can consult:

  • credit rating agencies such as Moody’s, S&P, and/or Fitch,[2]and
  • market-based indictors like bond yield spreads for universities that have debt.

Note that credit ratings will likely be of the university as a whole, not specifically of the law school (bond spreads may reference the university as well), but this is nevertheless useful because the financial strength of the overall university often affects its law school, particularly when either the law school or the university experiences a downturn.

Credit ratings do not track U.S. News rankings as closely as you might expect.[3]  In addition to providing important information about an institution’s overall credit rating, rating agencies’ reports will discuss risk factors such as a disproportionately large share of revenue coming from a single line of business, demographic changes in the region, or competition from other universities.

You should also be mindful of the impact that state and local government politics can have on public institutions and on private institutions that either depend on public institutions as feeder schools or compete with them for students to attend graduate programs.

In some states, public institutions have good relationships with both political parties.  In others, one or both political parties may be planning to cut education funding per student.  Figure out the lay of the land before you move across the country.

The institution’s creditworthiness is also relevant to your retirement savings options. Many universities offer deferred compensation arrangements which enable employees to effectively double their tax-advantaged retirement savings compared to a 403(b) plan alone.  These savings plans permit employees to select investments like a 403(b) or 401(k).  However, unlike a 403(b) or 401(k), deferred compensation plans do not provide for a segregated pool of assets that individual employees own.  Instead, employees who defer their compensation become general unsecured creditors of the university and are owed the account balance.  Other creditors would have claims on the same assets if the university were to become insolvent, and not everyone would be paid in full.

To fully take advantage of these retirement savings options as a young professor, you need to be confident that your university will remain creditworthy for the next 50 to 60 years.

Similarly, some public universities offer defined benefit pensions, but the value of these promises depends on how well-funded the pension is and the financial strength of the state government and/or university system.  States routinely underfund their public pensions.  States and municipalities facing inadequate revenues—typically because of limited political appetite for tax increases or concerns about mobility of taxpayers—have in the past restructured their pensions to make benefits less generous, and may do so again in the future. 

The public pension you are promised may only be worth some number of cents on the dollar, with the number of cents depending on which state you happen to be located in.

You can also consult publicly available financial reports for the university and, if available, for the law school going back five to ten years.  You may also be able to obtain information about the financial condition of the law school by asking the dean questions such as what the endowment is, debt and asset levels, how much “tax” the law school pays to the central university, what kind of support the law school enjoys from the central administration, etc.  However, be aware that Deans, like CEOs, are frequently optimistic in their views of the institutions they run.

 

Consider the Institution’s Commitment to Research

During 2011-2015, many law schools encountered declining applications and enrollments.  Universities and law schools managed these changes differently.  Some institutions dramatically cut faculty compensation, deprioritized research, increased teaching loads, increased administrative loads, increased tenure denial rates and/or extended tenure clocks, and pressured senior faculty members to retire.  This likely reflected these institution’s weak financial and market position and limited financial support from central university administration, state governments, or alumni donors.[4] 

Other institutions sought to preserve support for faculty research and had the financial strength or backing from their university to do so.

Find out what the institution did in the last downturn, because it is a very good predictor of what they will do in the next one.

Many of these decisions are not transparent to outsiders. However, there are clues available, such as tenured faculty moves tracked by Brian Leiter’s Law School Reports and rankings of institutions which are purely a function of their faculty’s citation counts or research paper downloads.

If several tenured faculty members left for institutions that are not generally regarded as significantly better, that could be a sign of trouble.  People vote with their feet, but moving is costly, and tenured faculty members usually only move if they believe they are moving into a notably better situation.

Whereas U.S. News reputational rankings change very slowly, by contrast, an institution’s Sisk/Leiter or SSRN rankings[5] reflect a summation of the citations or downloads to affiliated faculty members’ work.[6]  They therefore change and update quickly as faculty move or change their behavior.

If an institution’s Leiter/Sisk and/or SSRN institutional rank dropped, it is possible that strong research faculty left for greener pastures and could not be replaced.  Moreover, those faculty members who stayed may have received inadequate support to continue to be as productive researchers as their peers at competing institutions. 

If you receive an offer from an institution that handled the downturn in applications and enrollments by reducing its commitment to research, and you are motivated to join the academy by a desire to be a scholar, strongly consider whether the financial and personal sacrifices you will make to join the legal academy are worth it for a position at an institution with a relatively superficial commitment to supporting scholarship. 

You should also check the AAUP’s website and be extremely cautious about accepting an offer from any institution that has been censured or sanctioned for infringements of academic freedom or tenure violations.  If an institution has been investigated by the AAUP without a censure or sanction, that in of itself could be a source for concern.

 

Consider the Institution’s Competitive Position

 There’s a big difference between being number 1 or 2 in a major metropolitan area or region and being number 5 or 6.  Institutions that are lower down in the hierarchy have a harder time competing for students and often face more volatile finances, which can affect their ability and willingness to support research (see above).

 

Consider your Colleagues

How many other people are there on the faculty—and what fraction of the faculty—teach and write in areas that are related to your field of specialization, or use methodologies similar to you?  You do not want to be stranded and isolated on a faculty where no one else thinks like you or is interested in the issues that you care about.  It is better to be part of a strong research group.  It is ideal if a substantial fraction of seminars and workshops that you attend are relevant or related to your research or teaching so that they help you grow and improve as a scholar and teacher.

Similarly, consider the research productivity of faculty outside your area of expertise.  Faculties are quite different in terms of their scholarly productivity and influence, and not always in the ways you would expect from U.S. News rankings.  This is partly a function of institutional support, and faculty members who excel at research are also likely to push for it to be an institutional priority.  If you want to be a great scholar, this will be more challenging at an institution where scholarship is not a priority for the institution or for a large portion of its faculty.

Finally consider the strength of cognate schools or departments at your university, such as the business school, public policy school, or whatever professional school or social science or humanities department is the most relevant to your research.  This will affect the availability of shared resources like databases and software, as well as the ease with which you can find co-authors or attend law-adjacent workshops that you may find helpful.

 

Consider both the Cost & Quality of Living

 Law professors on average across institutions earn less than lawyers after controlling for the law school from which they graduated, their law school grades, and their years of work experience.  Even at elite universities, law professors typically earn less than lawyers at big law firms. Consider the cost of living in the city where each law school is located.  If the cost of living is high, is it worth it because of something you might enjoy, like proximity to a major legal market or fantastic weather or nature or food or culture?  Or are costs high simply because of proximity to a highly compensated industry that has no relation to your area of law?  Are costs high because of regulations or geology that makes it costly to build but that do not provide amenities you value?

 

Consider the Ease of Expected Travel

If you expect to travel frequently for conferences and workshops—and you probably should to publicize your scholarship and learn about the scholarship of others in your field—consider the ease of travel.  How easy is it to get to and from the airport?  How long are travel times to the cities you will frequent?  What is the frequency and availability of direct flights? 

Most academic institutions will only reimburse faculty members for economy flights.  Therefore, travel may be uncomfortable for those coming from relatively prosperous parts of the private sector where knowledge workers routinely are reimbursed for flying business class (i.e., large banks, consulting firms, law firms, and big pharma, finance, technology and energy companies). Whereas in some segments of the private sector, business class is considered par for the course on flights longer than a few hours, at academic institutions, business class is generally considered a luxury even on international flights.

If it is hard to travel, you may not travel as much, which could reduce your readership, influence, and relevance.  If you travel in spite of the discomfort, it may still take a toll on you.  Either way, travel could be a challenge.

 

[1] This estimate is based on lateral moves reported on Brian Leiter’s law school reports and on BLS and AALS estimates of the total number of law professors.  There may be more mobility among faculty at some elite institutions.

[2] Credit rating agencies were criticized for allegedly over-rating mortgage backed securities (MBS) and asset backed securities (ABS) prior to the financial crisis.  In my view some of these critiques are overstated, but in any case, their ratings of corporate issues of conventional loans and bonds generally remained quite accurate.  I suspect that ratings of non-profits are probably closer to ratings of corporates than to ABS or MBS in terms of their predicitie power.  When in doubt, however, market-based indicators like bond spreads are generally a better guide to financial condition than credit ratings.

[3] For example, the University of Southern California, where I teach, has a credit rating from Moody’s that is equal to or better than the credit rating of several universities that are typically ranked higher.

[4] To protect sources and avoid unnecessary embarrassment for leaders of institutions who made difficult decisions to weather a difficult period, I will not reveal the names of law schools that I know or believe used these tactics to manage the downturn.

[5] There are many different rankings on SSRN--total downloads, new downloads, total or new downloads per faculty member, or total citations or citations per faculty member, total papers or new papers, etc.

[6] While many people prefer citations to downloads as a measure of scholarly influence, and therefore prefer Leiter/Sisk rankings to SSRN, the SSRN rankings have the advantage of covering all 200 law schools instead of just the top 50.  In addition, SSRN rankings are updated more frequently (on a monthly basis).

https://leiterlawschool.typepad.com/leiter/2019/12/other-things-to-think-about-if-you-have-multiple-tenure-track-offers-michael-simkovic.html

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