April 03, 2020
Independent Law schools and small to mid-sized law firms can apply for low interest, partly forgiveable SBA loans (Michael Simkovic)
As part of the CARE Act passed in March, the Small Business Administration (SBA) is working with private banks to make several hundred billion dollars available to businesses with fewer than 500 employees. Non-profits are eligible. Law schools that are separate legal entities from their universities (or are independent and unaffiliated) may qualify, as may small law firms. The loans carry a 1% interest rate and are partly forgivable, based mainly on a firm's payroll expenses and in part on its mortgage or rent.
The funds are being distributed on a first-come, first-served basis and are expected to be quickly used up.
Details are available here.
Bank of America is processing applications today. Chase will begin processing applications next week.
March 31, 2020
New "Emergency Relief Fund" for law students, funded by Access Lex, administered by law schools (Michael Simkovic)
The Access Lex Institute is providing $5 million in total to fund an emergency relief fund for students at each of 200 law schools. Each law school will receive $25,000. Law schools will be responsible for administering the funds to assist students in need.
The press release describes the purpose of the funds as follows:
"Beyond the concerns around adapting to online learning, completion of hands-on legal clinics, and the potential for delays in the bar exam, this crisis has exacerbated financial pressures on law students . . . It is imperative that we act on our mission to positively impact the lives of law students in a tangible way when they need the support most"
Access Lex will provide more details about the program later this week.
The funds should be particularly helpful to law schools with small class sizes and limited resources. JD class sizes at law schools range from more than 500 students per year to less than 50.
February 13, 2020
Novartis demands a 15% discount from its outside law firms unless they put more women and minority lawyers to work on Novartis legal matters (Michael Simkovic)
Bloomberg reports that Novartis AG, a Swiss Pharmaceutical firm with a Market Capitalization in excess of 220 billion USD and U.S. headquarters in Boston, is demanding that its U.S.-based outside law firms ensure that at least 30 percent of associate billable hours on Novartis matters are completed by associates who are female or members of racial minority groups or LGBTQ+ groups, and that at least 20 percent of partner billable hours are completed by partners who are members of such minority groups. Any firm that does not meet these diversity targets will face demands from Novartis for an across the board 15 percent write down on its legal bill. The announcement of the policy is available here.
Under the new policy, above the 70 percent cap on straight-white-male associate hours, such non-minority associates would have to bill at least 4000 hours per year to be as financially valuable to Novartis's law firms as women or minorities billing 2000 hours per year on Novartis matters.
Novartis's policy represents a creative approach by Corporate Counsel to both cut costs and promote diversity. Recent research suggests that much of the difference in employment outcomes between male and female law firm associates is attributable to men billing more hours, bringing in more revenue, and having greater aspirations to make partner. The research could not rule out the possibility that law firms provided female associates fewer opportunities to bill hours.
Affirmative action is generally legal under Swiss law. The U.S. has historically been more permissive of affirmative action by private employers than by public employers or universities, but the legality of the policy above could potentially be challenged under more recent case law which imposes more limits on affirmative action and was decided under Title VII of the Civil Rights Act, which also applies to private employers.
However, standing and evidentiary issues could make a legal challenge to the new policy unlikely. Law firms are unlikely to sue a major client. A suit would therefore have to be brought by an associate who was dismissed or denied a promotion or bonus at one of Novartis’s outside law firms. The plaintiff would have to prove that he did not get enough work at the law firm specifically because of Novartis’s policy and that this led to adverse outcomes at his law firm. The law firm and Novartis would both have incentives to point to other potential reason for the plaintiff's dismissal or lower pay.
Were policies similar to Novartis's diversity policy to become widespread among corporate clients, straight-white-men intent on career advancement at law firms could potentially claim LGBTQ+ status--which includes those who report that they are bisexual, asexual or questioning their sexuality. Evidentiary issues and basic privacy concerns would make it difficult for private employers to challenge such claims. (However, courts have historically considered the factual truth of LGBTQ+ claims in asylum cases by requiring evidence of stereotypically effeminate behavior. Social scientists say such behavior has little relation to LGBTQ+ status. Courts have also asked asylum seekers to tell their "coming out" stories).
Widespread adoption of aggressive diversity targets could also raise questions about how much of one's ancestry would have to originate with individuals who were racial or ethnic minorities to claim minority status, and what kind of proof of such status would be required (i.e., self-report, an expert genealogy report, genetic testing, community involvement, or physical features stereotypically associated with racial minorities). Controversies related to similar issues have been raised to criticize Harvard law professor, Massachusetts Senator, and Democratic Presidential primary candidate Elizabeth Warren for claiming Native American ancestry based on family oral tradition and a small amount of Native American DNA.
Issues of racial identity and passing were memorialized in a novel by Pulitzer Prize winning author Philip Roth, about a light skinned black man who passes for Jewish in the 1950s, only to see his career derailed in the 1990s by false accusations of racism brought by students who he calls out for repeatedly skipping his class.
Aggressive diversity targets would also raise questions about whether Portuguese or white Spanish or Brazilian or Sephardic Jewish ancestry would entitle an individual to claim hispanic or latino status.
The Novartis Group General Counsel is Shannon T. Klinger, a graduate of UNC Chapel Hill and former attorney at Mayer Brown. The U.S. General Counsel of Novartis AG is Elizabeth G. McGee, a graduate of Fordham Law School and a former attorney at Mayer Brown.
January 29, 2020
Does membership in the Federalist Society or American Constitutional Society undermine the appearance of judicial impartiality? (Michael Simkovic)
A draft judicial ethics advisory opinion would discourage judges and their clerks and staff attorneys from being members of either the conservative/libertarian Federalist Society or the liberal/progressive American Constitutional Society because of concerns that membership in such overtly ideological / political organizations could create an appearance of partisanship that could undermine perceptions of judicial impartiality. The rules would permit speaking at or attending Fed. Soc. or ACS events. The ABA Journal and Bloomberg covered the story.
The draft was intended for comment by members of the judiciary only, but was leaked to the conservative National Review, which opposes the draft advisory opinion. The Federalist Society has four times as much money as ACS and is generally perceived to be more active and effective than the ACS. Thus a rule banning membership in both organizations would likely hurt conservatives more than liberals.
The National Review accuses the American Bar Association, which does not have an explicitly ideological or political mission, of being a "liberal" organization and argues that if membership in Fed. Soc. is banned, then membership in the ABA should also be banned. The ABA has previously responded to accusations of political partisanship by arguing that cherry picked examples of ostensible support for liberal positions overlook ABA activities that could be construed as conservative, such as ABA positions on corporate taxation.
Conservatives have previously claimed liberal bias by corporate owned media, elite universities, climate scientists, engineers, medical doctors, teachers, Youtube, Facebook and Google, the Pope, the Federal Reserve, country music, coffee shops, the military and the CIA.
January 28, 2020
Law professors are more religious than scientists, but it probably doesn’t matter much (Michael Simkovic)
At Taxprof blog, Paul Caron (Dean, Pepperdine) covers a study by James Lindgren (Northwestern) about the religious beliefs and practices of law professors. Lindgren compares law professors to the overall U.S. population and finds that law professors are more likely to express doubts about the existence of God.
This study is part of a line of research from Lindgren and others which compares law professors to the general population or the median member of congress on dimensions like religious or political views. In my view, these comparison groups are uninformative and inappropriate for some of the uses to which they have been put. For example, some argue for hiring preferences for faculty members with certain supposedly under-represented ideological views.
Law professors should not be judged by their ideological beliefs, but by their academic rigor. Law professors should not be compared to the general U.S. population or members of congress, but rather to scientists. Like scientists, law professors are much more highly educated than the general population, have higher incomes,1 and have opted into a career where they are expected to advance knowledge, often by relying on data collection and analysis based on scientific principles of causal inference. Even non-empiricists are taught and teach that legal adjudication depends on application of legal rules and standards to facts and evidence, not on faith. (Brian Leiter notes that law professors are also more religious than philosophers).
Many law professors are also likely more familiar with other cultures where religion plays a smaller role than in the U.S., such as Western Europe and much of East Asia, because of conference and personal travel and because of interactions within the U.S. with international students and scholars. For a high-income country, the U.S. is unusually devout, more closely resembling Cyprus or Poland than the UK or Japan.
Pew research finds that 41 percent of scientists do not believe in God or a Higher Power, and an additional 18 percent do not believe in God. Thus 59 percent of scientists report that they do not believe in God. By contrast according to Lindgren’s study, only 24 percent of law professors report that they do not believe in God. Law professors are therefore approximately 2.5 times as religious as scientists. This is in spite of the fact that law professors are disproportionately trained in the North East of the United States, a region that is on average both more economically developed than much of the rest of the country1--in the sense of having higher per-capita income and higher life expectancy--and also less religiously devout.
January 24, 2020
Consumer Reports: Leaked White House plan to slow progress on fuel economy standards will hurt consumers' health and finances (Michael Simkovic)
From Consumer Reports:
"A Trump administration plan to lower automotive mileage targets for future model years that could be approved in a matter of weeks would result in hundreds of dollars in [annual] added costs for consumers, according to a new U.S. Senate analysis. . . .
The proposed regulation, called the Safe Affordable Fuel-Efficient Vehicles Rule, will determine not only how much consumers pay for cars and fuel in the future but also how much carbon dioxide will be emitted by personal vehicles. Transportation (air travel as well as autos and trucks) is now the largest source of greenhouse gas emissions in the U.S., outstripping factories and all other sources.
The intent of creating future fuel-efficiency targets is to reduce greenhouse gases, but consumers also stand to gain if vehicles are more efficient because they will spend less money to fill up their gas tanks.
The Trump administration has argued that the previous targets for model years 2021-26, put in place under President Barack Obama, are too difficult for the auto industry to meet and would ultimately lead to higher vehicle prices, which in turn would reduce car sales and keep consumers in older, less safe cars.
Shannon Baker-Branstetter, manager of cars and energy policy at Consumer Reports, says the evidence suggests that automakers have more than enough affordable technology to meet the Obama targets. Since 2017, when the current fuel-economy improvement program began, vehicles have become safer and more reliable, as well as more efficient, she says.
According to the CR analysis, Consumers, under the Trump administration plan, would spend an average of about $3,200 more per vehicle on fuel over the lifetime of their vehicles. Cumulatively, all American consumers would lose about $300 billion, according to the CR analysis. . . .
The administration plan to lower fuel-economy targets has been challenged by California and other states that want to fight climate change and reduce air pollution.
The auto industry has been split on the Trump administration’s approach. Companies such as General Motors and Toyota have backed the federal government in a lawsuit that would change the rules so that California and other states cannot have their own clean-air rules. Ford, Honda, and two other automakers haven’t joined that suit and instead negotiated a deal with California to produce more efficient vehicles."
Jeff Plungis, Fuel Economy Rollback Plan Would Cost Consumers, Analysis Says, Consumer Reports, Jan. 23, 2020
January 16, 2020
David versus Goliath: Law professor sues New York Times Company over misleading and allegedly defamatory headline (Michael Simkovic)
Professor Lawrence Lessig recently sued The New York Times Company for defamation for incorrectly suggesting in a headline and lede that Lessig advocated soliciting donations from a convicted sex offender.
The New York Times wrote: "A Harvard Professor Doubles Down: If You Take Epstein’s Money, Do It in Secret . . . It is hard to defend soliciting donations from the convicted sex offender Jeffrey Epstein. But Lawrence Lessig, a Harvard Law professor, has been trying."
What Lessig actually said was more nuanced and subtle and had more to do with not being too quick to scapegoat fundraisers when donors turned out to have done disreputable things.
Read Lessig's complaint here. From the complaint:
"Defendants published their headline and lede despite their both being the exact opposite of what Lessig had written and despite being told expressly by Lessig pre-publication that they were contrary to what he had written. When Lessig brought the matter to Defendants attention post-publication, they refused to remove or edit their headline or lede to reflect the truth. . . . Defendant's publication destroyed [Lessig's efforts to spearhead a national dialogue dedicated to developing best standards for accepting and retaining donations from individuals and corporations who engage in wrongdoing] and has harmed Lessig's reputation more generally.
Defendant's actions here are part of a growing journalistic culture of click-baiting. . . . Defendants are fully aware that many, if not most, readers never read past the clickbait...The use of this tactic represents a uniquely troubling media practice as it relates to the harm to and destruction of the reputation of the target of the clickbait."
Although the full New York Times article provides more detail about Lessig's position, the headline and lede were anything but subtle or nuanced, essentially taking a few of Lessig's comments out of context and mischaracterizing them for shock value and humor at the expense of Lessig's reputation. As Lessig's complaint notes, the headline and lede are all many people read.
January 15, 2020
Van Horn discusses the legacy of corporate funding for the "Chicago School" of law & economics (Michael Simkovic)
Pro-market, a blog at the Stigler Center at the University of Chicago Booth School of Business, recently published a retrospective by Robert Van Horn discussing the early financial and intellectual ties between the Chicago school of law and economics and powerful corporate interests, and the controversy such ties engendered. The University of Chicago's work on anti-trust law is often credited with facilitating a waive of M&A, permissive review, and the rise of large corporations and reduced government efforts to regulate them.
It should be noted that the fact that corporations funded scholarship which supported free-market policies that were in corporate interests does not by itself mean that the scholarship or policies were per se flawed or contrary to social welfare--the answer to that question ultimately turns on the substantive merits. Nor should a scholar changing his views in response to contradictory empirical evidence be attributed to nefarious motives.
It may, however, suggest that certain ideas and perspectives are more heavily funded than others. In a match that is intellectually close to even, or perhaps even where one sides views may more closely reflect reality, funding may tip the balance.
Robert Van Horn, Corporations and the Rise of the Chicago Law and Economics Movement, Pro-Market, January 15, 2020:
"From its birth in 1946 onward, corporations made possible and crucially supported the rise of the Chicago law and economics movement. Aaron Director, who at one point had advocated for curbing corporate power and vigorously enforcing antitrust law, spearheaded the effort to create a [more corporate friendly]“new liberalism.”. . .
[Chicago Professors] Wallis, Aaron Director, and Milton Friedman all gave lectures on the topic of “Conservative Economics” to businessmen.
In the months that followed their lectures, businesses sent numerous laudatory letters. The Volker Fund, the Foundation for Economic Education, the Rockefeller Building, the Chamber of Commerce, Wealth Incorporated (NYC), and others requested copies of their lectures. Unsolicited copies were mailed to corporations, such as Standard Oil of Indiana, and periodicals such as The Wall Street Journal, which published an abridged version of Wallis’s lecture. Presently appreciative letters arrived in response to the mass mailing. General Motors, Sunkist, and Kellogg were among those that expressed gratitude, and some corporations requested to know more about “conservative economics.”
From the time of its birth in 1946, there has been a dynamic, mutually beneficial relationship between the Chicago law and economics movement and corporations. The close relationship between Chicago law and economics and the corporate world began when Aaron Director returned to the University of Chicago to lead the Free Market Study (1946-1953)—or the “Hayek Project,” as Henry Simons and Wilber Katz (then Dean of Chicago Law School) called it—and work in the Chicago Law School.
From 1946 throughout the 1950s, corporations made possible and crucially supported the rise of Chicago law and economics through funding and advice, and corporations praised scholarly publications of Chicago law and economics that championed a free market economy. They especially extolled those that challenged the status quo antitrust positions of many government officials and economists that undermined corporate power.
The Free Market Study examined the legal foundations of capitalism and sought to create a reconstituted [libertarian] liberalism to countervail [progressive economics], giving birth to Chicago “neoliberal” ideas in the early 1950s. Milton Friedman self-referentially used the term “neoliberalism” in 1951. Reflecting later on why the Chicago Law School agreed to the “Hayek Project,” Director asserted: “It was…decided that Chicago was the only place that was likely to accept such a project, and it was also decided that the law school was the only part of the University of Chicago that would accept such a project.”
Once the Free Market Study got underway in the fall of 1946, its members convened regularly to debate how to reconstitute liberalism and create a competitive order and thereby counter collectivism. In a New York Times interview, Director indicated that one criterion for assessing the success of the Free Market Study was its ability to exert political pressure to engender policy change. . ..
[Chicago] saw antitrust law as a centerpiece of the investigation of the legal foundations of capitalism. . . .
December 20, 2019
“Law School Transparency” is misleading its customers about the cost of law school and overcharging for data that are available for free (Michael Simkovic)
Brian Leiter recently noted problems with Elizabeth Olson’s uncritical coverage of “Law School Transparency” (LST) in an article published in Bloomberg.
The most important substantive problems with Olson’s recent article about LST not already mentioned by Professor Leiter are that: (1) Olson doesn’t mention that LST’s business model is repackaging and selling to prospective law students data that are readily available from the ABA for free and are available in more reliable form from U.S. News for less than half the price; and (2) Olson doesn’t mention that LST’s analysis of ABA data is deeply flawed, biased against law school attendance, and at a minimum highly controversial.
The clearest example of problems with LST’s analysis is the expected amount of debt after graduation—a point where other data sources are readily available and LST’s claims can be checked.
Law School Transparency routinely suggests that law students will graduate law school with two to five times as much debt as suggested by more credible sources like the ABA, U.S. News, the Department of Education’s National Center for Education Statistics, and student lenders. The overwhelming majority of credible sources suggest that law graduates typically complete law school with around $90,000 to $150,000 in debt. U.S. News reports a range a from $51,000 to $213,000 across the law schools it covers. By contrast, LST’s most prominently displayed expected debt after graduation figure averages a much higher $260,000, and ranges from $130,000 to $390,000.
LST reports its overstated cost figure prominently as the “non-discounted cost” of law school or the "full debt-financed cost of attendance." For example, according to U.S. News, Rutgers graduates typically graduate with $56,000 in debt for those who have debt and 16% have no debt at graduation. But according to LST, Rutgers graduates face a “non-discounted cost” more than four times higher—$230,000—and a “full debt-financed cost of attendance” as much as five times higher—between $229,000 and $278,000. Even with median grant amounts and in-state tuition, LST estimates that Rutgers graduates will have $175,000 in debt at graduation—3.5 times as much as U.S. News’s data.
U.S. News reports that Stanford law graduates complete their degrees with around $132,000 in debt. A full 36 percent of Stanford students graduate with no debt. But according to LST, the “full debt-financed cost of attendance” and “non-discounted cost of attendance” at Stanford are both 3 times higher at $390,000.
Real data on the actual costs of law school are readily available for free from the ABA, which reports tuition and fees and typical scholarship amounts. U.S. News’s premium product, “Grad Compass” provides better (albeit imperfect) coverage of law schools than LST, also offers information on other graduate programs, and costs less than half as much as LST’s product.
How does LST arrive at debt estimates that are so much higher than the actual data? By making outlandish assumptions that are all biased in the direction of finding a higher debt amount / higher total cost of law school, including assuming:
- Law students never work during law school or in the summers between their years of law school, even though almost all law students do
- Students never live at home or with relatives during law school or find ways to reduce expected living costs below estimates provided by law schools, even though many students do;
- (NOTE: estimated expenses provided by educational institutions are used in conjunction with tuition and fees to set maximum borrowing limits for federal student loans, and may therefore be set toward the high end of the range of students needs to avoid forcing students and lower income families with limited access to credit to borrow from higher cost sources)
- Students never pay down any of their debt or even the interest on their debt while they are in school, even though many students do
- Students and their families never use resources other than federal student loans to finance their degrees even when lower costs of capital are available elsewhere, even though many students do
- Students (by default) are assumed to receive no scholarship money, even though at many law schools half or more students do
LST’s paid product, which costs $75, provides some additional services, but these are generally available for free elsewhere. Some of these services, such as a push-poll disguised as a personality-assessment, appear to be of such low quality that they may have negative value.
Additional services include:
- an LSAT guide.
LST offers an LSAT guide from a company that is relatively new and has limited market share. Free LSAT practice tests are available directly from LSAC, which creates, administers and scores the LSAT. Free exams are also available from several well-established LSAT test prep companies. LSAC sells an official guidebook for $8 and has a lot of free information on its website. Khan academy also offers free LSAT prep.
- A prediction of likelihood of admission
LST’s paid product also provide a prediction of the likelihood of admission to law school, conditional on getting certain test scores and grades. However, LSAT offers a similar service for free. The ABA data includes information on the range of test scores and GPA of admitted students at each law school in each year. It’s unclear from the website how or if LST’s product improves on these free resources.
- An unscientific personality assessment featuring questionable privacy protections, dubious claims, and push polling
LST also offers a third-party personality assessment to determine whether you are suited to be lawyer. However, attempting to navigate to the website of the company providing this service (a Nevada LLC) raises a warning from my web browser that the website is not secure and my data could be stolen. Perusing the terms of service does not provide reassurance about privacy protections.
The website is unclear about how, or whether, the personality assessment was scientifically validated. It appears to be based on comparing the responses to survey questions of a non-random, non-representative sample of lawyers and non-lawyers to the profiles of prospective law students who are years younger, without any longitudinal evaluation of subsequent outcomes. To the best of my knowledge this is not a scientifically accepted method for validating a psychometric instrument as a predictor of career satisfaction or success later in life. There’s a link to a white paper, but it’s a sloppy thrown together jumble based on blog posts, and it is not peer reviewed. In what appears to be a bit of push-polling against law school attendance the white paper claims that signs that you’d be a good lawyer include a lack of empathy, a lack of initiative, a lack of resiliency, a lack of sociability and a lack of creativity—basically being a lump of coal.
Actual peer reviewed studies have found that success as a lawyer is associated with more positive personality traits like contentment, self-confidence, openness, competence, maturity, good situational judgment, a wide range of cultural interests and relative freedom from irritability and hostility and dispositional optimism.
Peer reviewed research has also found that the overwhelming majority of law graduates do not regret their decision to attend law school. By contrast, LST’s website claims that “Nearly 50% of all lawyers wouldn't enter the profession if they had it to do over.” LST provides no source for this claim and no explanation of the methods used to reach it. (LSAC also offers a free fun quiz, but has no pretensions about scientific validity).
The ABF, NALP and other groups sponsored a study of career satisfaction, debt, and earnings called After the JD (which has 3 waves) and may offer more helpful information than anything LST provides.
Free or inexpensive information for prospective law students is available from well-established non-profits like LSAC, the AccessLex Institute, the American Bar Foundation, and NALP. Unlike “Law School Transparency”, these non-profits actually are transparent about their own sources and uses of funds.
December 17, 2019
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. 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.
- 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,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. 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.