Academic

Selling A Law School ... And Buying One

By propertyprof

Matt's comments (and here) about how Princeton, Brown, and Dartmouth might acquire a law school in response to Dan's post raises some pretty interesting questions.  Take over an existing school or build one from scratch.  Given UC-Irvine's, Drexel's, and Elon's recent successes, I'd say the "build it from the ground up" model has a lot to commend it.   Then again, from the ground up's a ton of work. ...  There's some history here, as Matt wisely points out, like Penn State's 1997 merger with Dickinson and Michigan State's merger with (or acquisition of) Detroit College.

There's a story behind Quinnipiac's acquisition of  its law school that I'd like to know more about.  Wikipedia (not the source I want to rely on, but it's what I have right now) says that the University of Bridgeport's law school severed its ties with the university after the Reverend Sun Myung Moon acquired an interest in the University of Bridgeport.  That's a story I want to know a little more about.  (A New York Times story from January 1992 speaks of a unanimous faculty vote to have the University of Bridgeport's law school taken over by Quinnipiac, as opposed to Sacred Heart University, as the administration wanted.)  This line suggests more independence on the part of the law school than I'm used to hearing about.  (I can understand that the faculty and students might decide to pick up stakes and go elsewhere, but even all of them collectively don't  "own" the law school, I wouldn't think.)  Maybe People's College of Law in LA is controlled in such a way by its community members, the way some churches are owned by their members.  But that's not how I understand most law schools' relationship to their parent universities.

I would think that most law schools are wholly owned subsidiaries of  their parent institutions and if the parent institution wants to sell the law school (meaning the library, the facilities, the name and perhaps the accreditation) to another school they can do so.  The central administration may decide to require the acquiring institution to take all the faculty, but I'm not familiar with anything that would require the selling institution to do so--nor with anything that would require the buying institution to do so.  Perhaps the ABA would not recognize the transfer unless the faculty were brought over--this I'd want to look into a little.  But I'm not sure why an acquisition agreement would require that the new school take on all the faculty. 

I can see how a new school might assume all the liabilites of the old school, but I would think that in the case of tenured faculty that would be a voluntary obligation.  The United Daughters of the Confederacy v. Vanderbilt University case raises a similar kind of issue, but there Vanderbilt agreed to assume all the liabilities of the Peabody College, which it acquired.  And presumably there were some obligations that it could not avoid (the name on the dormitory at stake in the UDC case is one of them.  Why (and indeed whether) Vanderbilt had to abide that agreement is a very interesting story--and one that must be told at another time.  I think the UDC case is different from a school going into an acquisition saying that it would not take some of the faculty. 

The reason I think it's different is becasue I think a tenure contract is between the teacher and the parent institution, not the subsidiary school.  Most tenure contracts, as I understand it, do not protect against a department shutting down.  So the school's argument here would be: another school's purchased the name and various assets of our law school and then gone on and hired some faculty members; the faculty who aren't hired away are still employees of us, the original institution.  The original institution would then shut its department.   Even as I say this, it sounds terrifyingly  Gordon Gekko-ish (or perhaps I should say J.H. Blair-ish, given that Natalie Merchant has resurrected that good old folk ballad, "Which Side Are You On?").  But I may be wrong?

Full post as published by The Faculty Lounge on February 23, 2009 (boomark / email).