The University of New Hampshire’s Franklin Pierce School of Law - the state’s only law school - has been losing millions of dollars annually since at least 2014, according to budget reports obtained by NHPR.
(Scroll down to view the report obtained via a Right To Know request.)
Multiple university officials said UNH only had financial and enrollment records for the law school dating back to fiscal year 2014, the year the then-private Franklin Pierce School of Law fully merged with UNH.
In the 2018-19 year, the law school’s total operating budget was $5.5 million, but it spent $11.9 million. That’s more than double its operating budget, with a total loss of $6.4 million in that year alone.
The most dramatic year to date was the 2017-18 year, with a total loss of $6.7 million, and an operating margin of negative 130 percent.
By comparison, the target margin for each UNH college is 2.5 percent, and the overall UNH budget - which encompasses all colleges including the law school - is financially healthy.
Financial records show that other colleges within the university, like the College of Liberal Arts (COLA), have experienced millions in losses, too. In the 2017-18 year, COLA laid off 17 lecturers citing budget challenges.
According to official UNH budget reports, COLA lost about $3.3 million that year. But UNH Law has seen the most dramatic total loss in recent years when compared to all other UNH colleges.
UNH Law’s financial situation isn’t unique among law schools. After an enrollment peak in 2010, law schools across the country hit a steep cliff. Enrollment dropped sharply, from 147,525 JD candidates nationally in 2010 to 110,183 in 2017.
Experts pointed to a shrinking job market with law firms hiring fewer and fewer associates, and a rise in outsourcing and automating legal work. High and rising tuition costs were another factor.
John Hutson, who was dean of Franklin Pierce Law Center until 2011, says each year he was there, the entering class enrollment was just under 200. But with the approaching changes in the legal field, he saw that things were going to change.
“We were having to reject more applicants…there was a gravy train that we were riding, and they could all pay the tuition.” Hutson said.
Franklin Pierce agreed to merge with UNH in 2010.
According to current enrollment numbers, the law school hasn’t yet recovered from those enrollment losses nearly ten years ago.
Enrollment did increase this academic year, up to 145 students in the incoming class. But in 2016, there were only 71 incoming students, according to numbers provided by current UNH Law Dean Megan Carpenter.
In fact, the law school is losing millions of dollars in an era when the state’s university system is receiving some of the lowest state funding in the country.
UNH doesn’t see these losses as a barrier, but rather, as an investment.
“It was a very strategic calculation to actually invest in law school, to shrink those [enrollment] numbers, to effectively create the debt, and what happened is that strategy has been successful,” Carpenter said.
Carpenter points to improvements in the school, like higher national rankings and the addition of a new “hybrid” JD program, which includes online and in-person courses.
UNH also recently began a $600,000 contract with the consulting firm Huron to review its finances, but UNH Provost Wayne Jones said it wasn’t related to financial issues at the law school.
This year, law schools across the country have also seen an uptick in enrollment for the first time in nearly a decade. Some studies cite the 2016 election of Donald Trump as the cause for more applicants.
Though UNH Law’s enrollment has gone up recently, the school is still projected to lose another $5.9 million this year.
Paul Campos of the University of Colorado researches the finances of universities and law schools. He estimates that a majority of law schools are still operating in the red, but called UNH Law an “extreme situation.”
According to the budget statements, UNH Law has been discounting its tuition to students by more than 60 percent for the last two years.
“This is a problem a lot of law schools have. They have to discount their tuition in order to break even on their operating revenues, and UNH seems to be a pretty radical example of that,” Campos said.
Campos also pointed out that the law school environment in the northeast United States is relatively saturated, with many of the nation’s top law schools just south of New Hampshire’s border in Massachusetts.
View budget documents obtained by NHPR: