Budget Memo Law 2 - Office of Planning & Budgeting (OPB ...

To: Ana Mari Cauce, Provost University of Washington
From: Kellye Testy, Dean University of Washington School of Law and James W. Mifflin
University Professor of Law
Elizabeth Ford, Assistant Dean University of Washington School of Law
Date: February 17, 2012
Re: Annual Budget Discussion
Thank you for the opportunity to submit this information in preparation for our annual
budget discussion and to supplement the questionnaire and program evaluation metrics provided
centrally.
The Law School’s vision is “to be the best public law school in the nation and one of the
world’s most respected centers for interdisciplinary legal studies.” This is an ambitious goal but
one that the faculty was thoughtful in creating and is committed to achieving. Currently, the UW
Law is ranked 11 th among public law schools. 1 To move toward our ultimate goal, our
intermediate goal must be to break into the top five public law schools. Thus, in the
benchmarking below we will compare ourselves with the top five: Michigan, Berkeley, Virginia,
Texas and UCLA.
The law school metrics themselves are well-established. Yearly, every law school reports
a range of data to the American Bar Association as a part of its accreditation process. That data
is then compiled and largely serves as the basis for the rankings prepared by US News and
World Report. Overall, these metrics demonstrate that UW Law has performed well in the face
of historic disinvestment; however, we lag the top five institutions in nearly every category that
relates to resource allocation. Thus, if we aspire to be a top tier law school, significant reinvestment
is required.
Below is a more detailed description of the most important metrics, benchmarked against
the top five public law schools. We have grouped these into student support, faculty support and
revenue availability.
1 In the past year, UW Law’s US News and World Report ranking moved from 34 th to 30 th nationally. Among
public law schools, our ranking moved from 13 th to 11 th .

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STUDENT SUPPORT
Annual Budget Discussion
One of the important measures that the ABA tracks and U.S. News relies on is an
institution’s monetary expenditure per student FTE. The figure below demonstrates that UW
lags far behind in this measure:
Our expenditure per student FTE in 2009-2010 was about half the amount provided by the
number one public law school and $15,000 less per student than our nearest competitor. We
have been working hard to move the needle on this by investing strategically in the areas that
will provide the most important value to students: new faculty; admissions/financial aid; and
career development. We have acted aggressively in these areas, particularly in our faculty and
staff hiring. However, there is simply no way to be competitive with the top five institutions
without significant, new investment.
Even as we break this metric down into categories of support, UW Law lags far behind in
nearly every category related to resource allocation.
• Student Aid
$74,231
$67,016
Michigan Cal.
Berkeley
Expenditure per Student FTE
$60,118
$53,378 $53,049
$38,804
Virginia Texas UCLA Washington
Though we have made significant strides in student aid over the past two years, we are
constrained by available resources. The figure below demonstrates the 2009 total of student
grants and loans among the top five public law schools and the University of Washington. 2
2 In 2010, the Law School made a significant investment in this area, exceeding the amounts available in gift funds.
This put additional pressure on our tuition, state and fee‐based dollars. Though it was a considerable risk, it was
one we felt was essential.

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$15,000,000
$10,000,000
$5,000,000
$0
Annual Budget Discussion
Even taking into account the differences in student FTE at all institutions, UW Law aid is still on
average about one third of the aid given at the top five public law schools.
• Student Selectivity and Yield.
Total Student Aid
Because of the power of the UW Law brand, the attractiveness of the location and the
connection to the University of Washington, UW Law has been able to maintain its selectivity
and yield rates at 21% and 34%, respectively. This is virtually identical to our rates from 2010, a
worthy accomplishment in the context of an overall decrease in applications regionally and
nationally. 3 We also compare remarkably well in this area with the top five.
19%
10% 11%
Selectivity
Indications for the upcoming year are very positive. In the northwest, law school applications
are down 19.6%. Nationally, applications are off by 13%. Nonetheless, applications to UW Law
for the upcoming academic year are up by 10.6%.
3
In 2010 UW Law’s application rate remained unchanged, while the application rates nationally and regionally
plunged by double digits.
23%
16%
21%
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.
32% 33%
Yield
40%
30%
22%
34%
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.

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Annual Budget Discussion
The two figures below demonstrate median GPA and LSAT for the 2010 entering class as
compared with the top five. These student quality indicators are consistently lower than the top
five, though they are within reach. The trick will be getting the top performers into our pool,
which of course is related to our ranking and the availability of student aid.
• Bar Passage Rate and Placement.
Our measures of output compare very strongly with the top five, indicating that, in spite of
dramatic differences in financial investment, the quality of the professional preparation is worthy
of placement in the top tier of public law schools. As to bar passage rate, it is important to
equalize for state-to-state differences in rates of passage. Thus, the chart below compares each
of the top five on the basis of by how much each exceeds the overall state rate of bar passage.
20%
15%
10%
5%
0%
3.73 3.79 3.85
Median GPA
As to career development, again UW Law is right in the mix with the top five. Here, it is
important to look at both the overall rate, but perhaps more importantly, the percentage of
3.71
3.77
3.66
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.
Median LSAT
169 167 170 167 168
163
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.
Pass Percentage Exceeding State Rate
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.

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Annual Budget Discussion
graduates who are both unemployed and seeking employment. 4 On that metric, our numbers are
virtually identical to Berkeley, Texas and UCLA.
96.8 95.6 98.8
FACULTY SUPPORT
92.8 93.9 89.5
0 2 0 2 2 2
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.
The ABA tracks the amount each law school expends on salary for faculty. The figure
below demonstrates total instructional expenditure by each institution. UW Law expends less
than half the amount of its nearest competitor in instructional salaries.
$19,652,032
Placement Rate 2010
Percentage Employed Unemployed Seeking Work
Total Instructional Salary Expenditure
$16,647,826
$20,818,411 $19,267,771
$15,045,000
$7,129,669.00
Michigan Berkeley Virginia Texas UCLA Univ. Wash.
4 The ABA and US News counts students who are not seeking employment and those who are in graduate school as
“unemployed.” Because we have a joint JD/LLM program, all of our students who move on to the LLM program
are counted against our placement total. For that reason, a more true measure of students who are looking for
work and unable to find it is the “unemployed seeking work” metric. If it is useful, we are able to break this metric
down further into types of placement, full versus part time and the like.

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Annual Budget Discussion
To account for differences in student body size, the figure below looks at instructional salary as a
function of student FTE and demonstrates that if we were to make an enrollment jump too
quickly, we would fall even further behind on this metric.
$25,000.00
$20,000.00
$15,000.00
$10,000.00
$5,000.00
$0.00
Instructional Salary Per Student FTE
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.
A further measure of the commitment to faculty research can be seen in faculty summer salary
support. Here we see an especially dramatic difference.
$1,509,358 $2,064,490
Summer Salaries
$5,400,322
$3,605,142
$1,711,000
$420,523
Michigan Berkeley Virginia Texas UCLA Univ.
Wash.
Not surprisingly, an equally large issue for UW Law is faculty compensation. On average, our
faculty members are paid about 65% of the salary received by faculty in the top three institutions.
The figure below details those averages.
Average Faculty Salary
$191,726 $198,500 $183,814
$123,520
Michigan Berkeley Virginia Univ. Wash.

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Annual Budget Discussion
As reported by the Seattle Times on February 2, 2012, the University of Washington has become
a prime poaching ground for other institutions:
Washington is now known as a place to go headhunting” for out-of-state
universities hiring new faculty, said Bruce Shepard, president of Western
Washington University. “This is a real threat, long term, to sustaining the
excellence of our universities.
We have experienced some effects of that just this year, losing two faculty members to
competing institutions.
Because of the small size of the student body, we have been able to remain quite
competitive in the area of faculty-student ratio. 5 However, if we seek to increase enrollment
capacity without negatively affecting ranking, we must anticipate the need to remain competitive
in this area. Additionally, because one of our challenges is the peer ranking among other law
schools, it is imperative to continue to grow a vibrant faculty with a national and international
reputation.
SOURCES OF REVENUE
The total revenue available to UW Law is dramatically lower than the top five. This
includes tuition, gifts, grants, other revenue and state support.
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
Total Revenue Available
5 Because each of the top five public law schools uses the semester system and not the quarter system, it is notpossible
to do apples-to-apples comparison against the University of Washington since the semester-based systems
generally are several points higher in the student/faculty ratio. So whereas the overall average among semesterbased
programs is 14, the average among quarter-based programs is 11. UW Law’s student-faculty ratio is 9.7.

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Annual Budget Discussion
As we break out each of these areas of revenue, the problems and solutions become much
clearer. 6
• Tuition.
The chart below compares UW Law’s tuition levels with the top five. UW Law’s tuition
affordability is a serious admissions advantage, particularly during this downturn. However,
there is no question that in order to compete with the top five, we must slowly adjust our tuition
level. The only question is how much and when.
Michigan Berkeley Virginia Texas UCLA Univ. Wash.
Resident $44,840
Non-
$44,244 $42,500 $28,669 $40,616 $24,339
Resident $47,840 $52,245 $47,500 $44,638 $50,639 $37,229
As we plan for careful movement here, it is important to look at tuition trends among the
top five. The below figure demonstrates that the rate of increase in resident tuition has been
about the same as the competitor institutions, with one difference: Berkeley’s tuition spiked in
the last two years likely in response to state disinvestment. Facing the same disinvestment, UW
Law’s has attempted to keep its tuition rate of increase about the same.
Tuition
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
2001
2002
Resident Tuition 2001-2010
2003
2004
2005
6 This is the figure reported to the ABA in 2010, but it under-represents the total revenue available since it did not
include some gift, grant and fee-based revenue. The correct number should be just over $20 million.
2006
2007
2008
2009
2010
Michigan
Berkeley
Virginia
Texas
UCLA
Univ. Wash.

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Annual Budget Discussion
In the area of non-resident tuition, UW Law’s rate of increase has been flatter than its
competitors in the early years of the decade resulting overall in a widening of the gap between
UW and the top five institutions.
• Enrollment
Tuition
60000
50000
40000
30000
20000
10000
0
UW Law’s overall enrollment in the JD program is significantly lower than the top five. The
figure below demonstrates that difference in 2010.
1117
2001
2002
Non Resident Tuition 2001-2010
944
Michigan Cal ‐
Berkeley
2003
2004
2005
2006
2007
2008
2010 Enrollment
1122
2009
2010
Michigan
Berkeley
Virginia
Nonetheless and in spite of the significant deficits in student aid, the Law School has made
strides in this area, increasing overall enrollment since 2001 by 13% and minority enrollment by
58%. 7 The figures below compare those results with our competitors. Over that 10-year period
UW has expanded its enrollment at a higher rate than the top five institutions, though it is
important to keep in mind that UW Law began with a smaller real number of enrollees.
7 2001 was the year that Initiative 200 was enacted by the people of Washington and resulted in a significant dip in
minority enrollment. Since then, UW Law has made steadily improved in our ability to attract diverse students.
1182
1011
Texas
UCLA
Univ. Wash.
550
Virginia Texas UCLA Univ.
Wash.

• Gifts
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‐20%
Univ. Wash.
UCLA
Texas
Virginia
Cal ‐ Berkeley
Michigan
Annual Budget Discussion
4%
5.7%
4%
The Law School has been breaking its own giving records year after year for the last several
years; however, we have significant ground to make up to be competitive in the top five. The
figure below describes the endowments held by each of the top five as compared with UW Law
$288,362,047
Percentage Increase in Enrollment Since 2001
Univ. Wash.
UCLA
Texas
Virginia
Berkeley
Michigan
Percentage increase in minority enrollment since 2001
$207,976,524
Though the amount of yearly giving is up and growing, the figure below compares our 2009-
2010 gift revenue with the top five.
23%
23%
Endowment Mkt Value
$299,810,421
$181,133,879
27%
6%
35%
34%
13%
$74,016,000 $70,894,544
Michigan Berkeley Virginia Texas UCLA Univ. Wash.
46%

• Grants
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$7,128,555.00
$5,053,034.00
Annual Budget Discussion
In the area of grant revenue, UW Law does extremely well, second only to Berkeley in the
amount of revenue from training and research grants. Overall, however, this is a very small
piece of the overall revenue picture.
• Reserves
Total Gift Funds
$14,017,240.00
$5,884,326.00
$2,241,000.00 $2,608,545.00
Michigan Berkeley Virginia Texas UCLA Univ. Wash.
$1,509,086.00
$4,071,668.00
Total Grants
$2,084,958.00
$1,471,336.00
$1,031,000.00
$109,786.00
Michigan Berkeley Virginia Texas UCLA Univ. Wash.
Finally, in the area of reserves, UW has no operating reserve. Indeed, this area is one that
distinguishes us most dramatically from our peers. The figure below shows reserve amounts in
total dollars. While this does not directly affect ranking, it does place us in a precarious situation.

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$24,730,845.00 $24,730,845.00
$39,590,617.00
Reserves
$34,826,928.00
RE-INVESTMENT IN UW LAW
Annual Budget Discussion
$‐ $‐
Michigan Berkeley Virginia Texas UCLA Univ. Wash.
While we would like to begin by asserting our ability to make the shift in national
prominence without additional assistance from the University, we cannot do that. An initial
investment in the Law School is required to maintain the initial momentum.
The Law School has moved aggressively over the past two years to demonstrate that it
can be competitive as a top tier law school. To accomplish that, the Law School has invested
heavily in faculty hires which have moved our US News and World Report Peer Assessment
score from 3.1 to 3.2. More to the point, however, these faculty hires have rejuvenated and
inspired our faculty to perform in ways that are more impressive and collegial than they have
been in decades. 8 Nonetheless, we have lost two faculty members this year to other institutions
and fear that we may lose more in the coming years. For that reason, we have hired two
additional faculty members for the upcoming year and will likely hire a Director for our Asian
Law Center.
We have also invested in staff in key areas including admissions and career development.
These areas are essential to our success and had been terribly neglected before my arrival. All of
this work has taken a significant financial investment and as a result, we are outside of our
budgeted amounts in most areas of salary. We knew that this was a risk and one that we expect
will pay dividends.
8 Our newest faculty additions, Zahr Said and Sanne Knudsen have continued on this path providing outstanding
teaching and, even in the first quarter of her time with use, Professor Knudsen has two articles committed to
publication in the area of environmental law.

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Annual Budget Discussion
To continue to move in the right direction, we will be seeking an additional investment in the
following areas:
- Student Aid. While we work toward more robust endowments in the scholarship area,
we must attract elite students into our pool and maintain accessibility to those students
who would not otherwise be able to consider law school. To do that, we must be in a
position to offer the kind of aid that these students will expect in order to motivate them
to place UW Law in their top tier of choices.
- Faculty Support. We will be seeking three things in this area.
o First, we will be seeking funding for additional faculty salaries sufficient to allow
us to continue to build on the momentum the law school has generated thus far.
o Second, we will be seeking additional support for faculty research in the form of
support for summer salaries.
o Third, we will be seeking to fund a parity adjustment for our existing faculty. As
we have added faculty over the last two years, it has become clear that our current
group has fallen far behind the market. As the result, in order to recruit quality
faculty we have exposed issues of compression and in some cases salary inversion
among our existing faculty.
We appreciate the opportunity to provide this additional information and lay out our
plans for the coming years. We look forward to discussing this in more detail at our meeting in
March. In the meantime, we are happy to answer any questions that you may have.