Okay, that’s a provocative title. But here’s what I started to do. I tracked down 990 data for 14 law schools. Nine of these law schools reported seven-figure losses (“revenue less expenses”) for at least one of the last two fiscal years. The median loss in 2017 was $1.5 million; the median loss in 2018 was $720,000. My goal isn’t to call out particular schools in this post, so I anonymized the schools.

And yes, accounting practices may not tell us much about how “real” these deficits may be. But with that caveat, let’s take a look.

You’ll notice that some schools experienced dramatic swings from one year to another. A sizeable gift, a sale of property, a restructuring of debt are all among the possible reasons why one year’s net revenue may have increased significantly; a tranche of funds for faculty buyouts or scholarships may decreased it; a sharp swing in student enrollment may shift it in one direction or another. That might limit the value of making any overall comparisons.

Now, of course, the caveats. 990 data comes mostly from stand-alone law schools, which are not representative of all law schools. (University 990 data typically doesn’t break out sub-units like law schools.) Stand-alone law schools may not be able to scale like universities and may bear disproportionately more costs internally. They are often “lower ranked” than the typical law school, to the extent law school hierarchies bear some relation to financial stability or success. (UPDATE: As one commenter suggested to me, maybe all I’ve revealed is that 990 data is idiosyncratic!)

It’s also not to say that these schools are “at risk.” Their reported net assets range from $5 million to $274 million (five schools over or near $100 million). Schools with very high net assets can absorb such losses much longer. And it’s not to say that losses as a percentage of total revenue might matter, too—while some schools reported revenue as low as $3 million and others as high as $85 million, most had annual revenue of $30 million to $50 million.

That said, we rarely see much transparency about specific law schools and their budget deficits, with occasional stories of some institutions making their way to the media. I thought it might be worth looking at some of the information we do have and see how widespread the trend is.

Given that legal education has reached a kind of “new normal,” of fairly stable and predictable applications and enrollment for several admissions cycles, one hopes that budget deficits will continue to shrink and law schools will find stability soon. The “crunch” in legal education is now about a decade old, so lingering challenging financial pictures are not a welcome sight.