On March 21, 2014, a remarkable conference call was held between a high level team at financially-beset Thomas Jefferson School of Law (TJSL) and representatives of the bondholders who unwisely financed TJSL's chevron-topped vanity project to the tune of 130 million dollars. To its credit, the TJSL side decided to record the call and make it available on the internet on grounds that the bondholders were so numerous that a recording was the only way to effectively communicate with all, rather than a select group.
The majority of the conference call consisted of Dean Thomas Guernsey narrating a slide show (which unfortunately is not available) about the school’s operations, programs, constraints, and revenue projections. The audio file of the call can by accessed by going to this web address and following instructions:
On October 29, 2014, just over seven months after the call, TJSL reached a last-minute debt restructuring agreement with the bondholders. Under the agreement, the school becomes a mere tenant in its own lavish eight story cathedral of legal learning, aka Hasl's "Mammoth" Folly. However, on its website, TJSL reassures readers that "students should not see any change in the operation of the law school caused by the restructuring" and that "We do not anticipate a reduction in the number of staff as a result of the restructuring."
What follows are a few highlights of what Dean Guernsey told the bondholders, during the March 21st conference call, about recent and projected budget cuts at the school. Potential law students and their influencers may wish to consider Guernsey’s comments as they evaluate whether TJSL is likely to provide, as TJSL promises on its website, "a learning environment in which all of our students can more effectively acquire the academic and non-academic skills that they need to thrive in a rapidly changing legal profession." They might recall that, even pre-budget-cuts, the school's bar-required job placement rate for recent grads was among the worst in the country and that its bar passage rate is dismal. How the school will improve its performance with a reduced and demoralized staff is not clear. Perhaps magic.
* "As we’ve reported before, the school has taken dramatic cuts since 2012. The number of employees at the school declined from 139 to 102. We have reduced spending by 22% and believe the result is that we have a bare bones budget for the operation of the law school." (Conference call, at 32:50-33:10)
* "We are projecting a significant decline in the number of full-time faculty that the law school will employ as the number of students declines and then levels off." (32:24-34:40)
* "We are projecting further personnel reductions planned over the next three years. . .We have assumed that benefits and salaries for those who work at the law school will not increase over the next four years, but that after that there will be a 2.5 percent annual growth. At some point, the continued inability to give salary increases is going to have obviously a negative impact on our ability to retain people." (33:28-34:05)
* "A number of expenses we have reduced, these are just the ones that are $50,000 or more. Professional fees by more than $560,000. Student recruitment by more than $430,000. Library continuations by $125,000. Security by $89,000." (39:22-39:38)
* "We are looking for other ways to improve. . . [A] bar preparation course [for] which we pay about $600,000 a year ends in 2016. We have no intention of renewing that. That leads to a $285,000 reduction in 2017." (39:47-40:13)
* "We have worked hard to reduce our parking expenses, which should be about $115,000 less in 2015. We are currently renting 400 parking spaces, and we’ve negotiated a reduction in that number to 150 spaces at $85 per month." (40:15-40:39)
* "As we’ve talked before, the law school has made significant budget cuts lately. We have reduced the overall FTE headcount by over 21% in the past year alone. As I’ve indicated, we have further reductions projected over the next three years. Significant salary and benefit concessions have been implemented. We froze salaries and wages since 2012. In August, soon after my arrival, we made a 5% across the board cut in salaries, with an additional 3% cut for the faculty. We eliminated the 401K matching, which was up to 3% of salary and that became effective on January, 2014. And we have eliminated paid sabbaticals." (38:26-39:14)