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Stanford Report, May 7, 2003

Transcript of the panel discussion at the 2003 Annual Meeting of the Academic Council

This is a transcription of the panel discussion at the 2003 Annual Meeting of the Academic Council that followed a prepared speech by President John Hennessy. Making presentations were Kathleen Sullivan, dean of the Law School; Ewart Thomas, professor of psychology and former dean of the School of Humanities and Sciences; and Michael Keller, University Librarian and director of Academic Information Resources.

John Hennessy: Our first panel member is Kathleen Sullivan, the Richard E. Lang Professor and Dean of the School of Law and Stanley Morrison Professor of Law. I asked Dean Sullivan to be prepared to share her perspective about leading a school that is smaller than some of its competition and less well endowed than others, but which has been incredibly successful in attracting the best students and faculty in the country. I will note that Dean Sullivan has an important alumni event this evening and may have to leave slightly early.

Our second panel member is Ewart Thomas, professor of psychology. I asked Professor Thomas to share his perspective formed as dean of the School of Humanities and Sciences during the budget cut of the early 1990s.

Our final panel member is Michael Keller, University Librarian and director of Academic Information Resources. I have asked Michael to speak about his role as the director of a resource that is critical to our academic mission, but which also finds itself faced with a seemingly endless increase in acquisition and other costs.

I will ask each panel member to speak briefly, and then we'll open the floor for audience questions. Dean Sullivan.

Kathleen Sullivan: Thank you, President Hennessy, for the honor of appearing before the Academic Council, and thank you, ladies and gentlemen. President Hennessy started out by saying that the law school is a small school -- which it is -- but small but distinguished, he is sometimes likely to say. And it reminds me that in my discipline we all study an early John Marshall case, a decision by the Supreme Court that concerns Dartmouth College, in which they said, "It is a small school, sir, but there are those who love it," as their alumni do.

Well, as a constitutional lawyer, I spend most of my time academically thinking about operating under constraint, because, after all, that is what a constitution is. A constitution is like a diet -- it's something that exists to keep you from giving into temptation when you're most tempted to do so, or at least that's what it's supposed to function as under conventional theories of constitutionalism. But I thought that when another, when a very great constitutional lawyer, Gerhard Casper, decided to make me a dean and he did me that honor, I thought I would learn to think less about operating under constraint than about dreaming of endless possibilities. That was because he appointed me in 1999, a time when law students came here not knowing that capital markets ever went down, and not even bothering to take the bar exam in some cases -- just going immediately off to dot-coms and other dreams of their own.

Well, times changed, and for the last four years, the law school has remained quite remarkably successful. Now, I hesitate to even mention this fact in front of President Casper, but there's a publication known as U.S. News & World Report -- nobody pays any attention to it, of course -- but in 1999 we managed to do the unprecedented thing of flipping with Harvard, so that we're now the No. 2 law school by that ranking.

That does serve us very well in marketing for students who haven't studied the methodological flaws. And four years at No. 2 ahead of Harvard has made Harvard very nervous; we still trail Yale -- I'll say more about that in a minute. We boast a participation rate among our alumni of nearly 40 percent of people who participate in giving. That's compared with rates at our peer law schools -- like 28 percent at Harvard, 24 percent at Columbia, 31 percent even at Chicago.

We have had over the last four years nearly $45 million of cash in the door and $43 million of new commitments, and the most impressive piece is that we had cash in the door that remained steady over Fiscal Year 01 and Fiscal Year 02, despite the worsening of the economy. We've seen an endowment that went from about $350 million at its peak to a current value of just under $300 million. We operate a lean, mean law school relative to Yale. We operate at about 75 percent of Yale's operating expenses and about 75 percent of Yale's endowment, but we've managed to do quite a lot of things in those four years. We've added seven new faculty, we've attracted and retained -- against competing offers that are often much more lucrative than what we can match -- a whole set of faculty; we've created a new clinical faculty line and a new legal services office in East Palo Alto with the help of the university; and we've begun the renovation of the physical plant. Although it's still described as the "new" law school, it was christened by Gerald Ford, it is 25 years old, and you do get a certain 1970s feeling when you walk into parts of it that are still lime green in color and have Peter Max graphics to go with it. So we've begun the first renovation of the "new" law school to turn it into the "new new" law school that those of you who participate in Faculty Senate meetings have seen and enjoyed and admired in our new wireless multimedia and fully renovated classrooms.

So, how have we been able to attract excellent faculty, attract the best students and keep such vigorous alumni support? Well, of course, resources matter. I can't say they don't. We do have the highest endowment per student of any law school other than Yale, and we do have the highest budget per student -- operating expenditures -- per student of any law school except Yale.

But they're not all that matter. I remember the striking fact that we're on Yale's reputational heels, right on their heels, with only three-quarters of Yale's budget and only three-quarters of Yale's faculty size and only three-quarters of Yale's endowment, and that's in nominal terms. Think about it in real terms, when you consider the cost of living differences between Silicon Valley and New Haven. So there are obviously intangible factors as well. So I thought with these very brief remarks I would try to focus on what we think of as our core strengths, and then how we try to draw on them in these difficult times.

On the core strengths: I think that the first point that I've learned in this job is that you have to have a vision, or what you might want to even say if you don't think it's too crude, a brand, something that demarcates you from the competition, something that encapsulates your comparative advantage. What we've developed -- which I think is quite true to our content and our ideas -- is the idea that we are a law school in which you can do both law and law and the other disciplines. We're not just a professional school in which there's training in a craft; we're also part of the university and a place where people teach and study and write in the fields of history and economics and literature and critical theory and psychology and sociology and political science and philosophy. We're a law school and we're a law and the other disciplines school. The beauty of what we try to do is to amalgamate those two functions into one, to give the students the very best of both a rigorous theoretical and a rigorous practical training, and to distinguish ourselves from competitors who focus more on the law or more on the "and," and to get the message out to students that we can add a great deal of value to them in that time by giving them the best attributes of their liberal arts education and graduate work and the very best professional training, so that they can hit the ground running when they leave.

We emphasize some of our other features. We emphasize the fact that we are a small law school, and that gives a kind of intimacy and immediacy and community to our education that the larger law schools like Harvard, NYU, Columbia, Georgetown cannot. And as I've been quoted as saying, we sometimes stoop to mentioning our environment. When I moved here from Harvard in 1993, I said to a reporter who asked, "Why did you leave Harvard to join the Stanford faculty?" I said, "Who could resist a world-class institution in paradise?" And now the law students refer to Stanford Law School as "paradise." They talk about it as paradise in the law school show, and I'm stuck with this quote forever.

Of course, having a brand isn't the only thing you need to do. You need to engage alumni in the ideas that the brand represents, and I think one thing we've tried to do very much at the law school is engage alumni in ideas about curriculum, in helping us to teach courses on deals or federal litigation or clinical experiences. We've tried to create alumni weekends -- I have a wonderful staff who really drives this -- we try to create alumni weekends where you come not just to dine back on the Farm with your friends from your youth, but also where you might in a single day listen to Supreme Court justices deciding a reenaction of the steel seizure case, the FBI director talking about what he's trying to do to respect civil liberties while fighting the war on terror and the like. We try in our alumni magazine to engage alumni not just in the doings of classmates in the class notes but in stories of people who are fascinating in the law who went to our law school, whether they're human rights watch workers who traipse the world down dangerous roads to witness human rights abuses or the chief justice of the New Zealand Supreme Court or the president of the Seattle Mariners. We try to make our magazine as the university does, extremely substantive.

So, first a brand; second, the engagement of alumni in the brand or the vision so they'll maintain their loyalty; and third, visibility. And in this sense there are really two things that you can do with very little investment of resources. You can just make sure with the help of the excellent people who help run the Stanford News Service and all of our local communications departments -- make sure that the wonderful things our faculty are doing are visible to the outside world. There are students who may come to Stanford not necessarily because they've read everything the faculty writes in law reviews but because they've seen them as public intellectuals -- Larry Lessig appearing on television talking about copyright extensions or spam, or Joseph Grundfest appearing in the newspaper running the Stanford Law School securities class action clearinghouse, or Pam Karlan explaining the tie in the Florida election of 2000 makes students want to attend, and there's a role for public intellectuals across many schools besides the law school.

But more importantly, we've tried to increase visibility, and one that's truest to our deep research mission is to maintain commerce with other schools. I've made it one of my priorities as dean to vastly increase our workshop culture, and now in any given week, you can have eight different, you can attend any of eight different research colloquia, walk down the hall and go to our general legal theory colloquium or go to one on law and economics, one on dispute resolution, one on distributive justice, one on tax policy, one on high-tech property and contract, one on environmental law and natural resource policy. And what those workshops do is bring scholars from throughout the country and the world to Stanford to talk about their papers, and with their coming to Stanford and meeting our colleagues they see what good things we do.

Now, how do you use all this in the hard times? I run a law school. I can't cut the athletic teams or the marching bands because we don't have any. I can't rely on government grants, because unlike the hard sciences or the engineering departments we don't really operate on government grants. We don't do that kind of research. We're essentially a lean, mean teaching machine that specializes in ideas. So I just want to leave you with three points about what we've tried to do in the harder times, building on the basic points I've already made -- the importance of vision, the importance of engagement, the importance of visibility.

Well, first, if you have engaged the alumni, then you have a countercyclical cushion for the hard times. If they've gotten engaged, they're not going to leave you when the going gets tough. Now, of course, I'm privileged as a law school dean because I have litigators, right? During the nineties everybody said, "Why are you a litigator? Why aren't you a transactional lawyer?" But now everybody's saying, "Thank God for litigators -- and bankruptcy lawyers."

But if you have engaged alumni because you've done all the other things right, our experience is they stick by you in the hard times and they make sure that they keep up the annual giving, even if they cut back for a while on their capital gifts. We have annual giving, annual cash receipts that are now three times what they were before our five-year capital campaign from 1995 to 1999.

Second, let me turn to the boring stuff. You have to do some attempt at productivity gains. You can't just rely on sustaining or even increasing revenue. You have to cut costs, but I've found that there can be enormous satisfaction and creativity in finding ways to increase productivity. Let me give you just a few examples of what we've done. First, we created a budget process within the law school. We don't have departments, but we created a budget process that tries to mimic some of what the university budget process does and put everybody through a rigid calendar in which they have to project costs and come back and tell us what they've been up to. I'm hesitant to say this with the provost in the room because he might want to claw it back, but we've managed through that process to generate a million dollars surplus each of the last two years. How did we do it? We just did things like, you know, went after the instructional budget. We were teaching with 80 adjuncts. Our tenure-line faculty, the people that students came to Stanford to study with, had grown accustomed to teaching a lot of luxury and boutique courses and not teaching the big basic service courses, and we just changed our rules: All faculty have to teach 10 hours, two basic service courses. We went through a quality review of all the adjuncts, cut the budget in half and saved $500,000.

We looked around for ways of just being more productive. It may sound boring to try to put market pressure on your suppliers and so forth, but if you can consolidate your caterers or -- here's one. We moved our special law school graduation, which we used to put in a tent; we moved it indoors, saving $15,000 on the tent, and it probably rained both the subsequent two years just to prove that prudence is correct. We created -- I won't go on and on -- we looked for market bargains when we renovated our classrooms. We managed to benefit from other people's pain by buying a set of Aeron chairs at a third of cost. We focused in our hiring on hiring junior faculty, and it turns out that junior faculty are considerably cheaper than laterals, and you can get wonderful people who will develop institutional loyalty, be excellent citizens and make sure there's some faculty left 20 years from now when the rest of us laterals retire. And it turns out to be good for us qualitatively as well as saving us a great deal of money.

So productivity gains can turn out to be something that is incredibly not only creative and helpful to engage in. It may turn out that you improve your programs by focusing on money first and then realizing you're gaining lots of other benefits.

But, finally, let me close by saying that you rely on your vision in the bad times as well as the good to make sure that people still have a good reason to give to you. I think that the reason why people give to a law school -- they scratch their heads and they say, Why should I give to Stanford Law School, a rich institution, when I should be giving to Oxfam and soup kitchens and people who are down and out and hurt by the recession in much more tangible ways than lawyers are? You have to remind them that what we produce is the good that lawyers do. We don't produce lawyers; we produce the good that lawyers do. I have a speech called "The Good That Lawyers Do," and everybody asks me, Is that going to be a short speech? But it's not, because the thing to remember is that if we didn't have lawyers, we'd have to invent them. They are the people who prevent conflicts in advance or institutional design, whether it's constitutions or contracts. They are the people who solve conflict peacefully once we had it. And if you remind people that what they're producing is the people who will help solve all the other social problems they're tempted to give to, and they're convinced that you do it well, they'll stick with you even in the hard times.

Thank you very much.


Hennessy: Thank you, Kathleen. Ewart?

Ewart Thomas: Thanks, John, and thanks for your earlier reassuring analysis of all the challenges and prospects. I'm reminded, however, that there is a division of labor between the president and the provost such that the president gets to be bold and reassuring and even optimistic, while the provost and deans, they get to be pragmatic, focus on the gory details of what is to be cut and by how much. So my remarks will refer to the process that my colleagues and I in the Humanities and Sciences' dean's office used 12 years ago to tackle this tightrope of maintaining academic excellence in a difficult economic climate.

A budget cut of 10 percent, and I'm picking a round number --

[Comment:] A good number.

Thomas: It's a good number, all right. A budget cut of 10 percent is a very deep cut, and the stakes associated with it are correspondingly high, and constructing a plan for such a cut should be a deliberative process to which various stakeholders should be invited to make inputs. While this can be time consuming, it is a good way for decision makers to learn about issues outside of their ken, such as how undergraduates value a particular program or which subdiscipline in history could exploit synergies of cognate departments if only it got a billet or two, and then for the procedural fairness requires that different parties have their say in the process when the stakes are this high.

Now this is not the place to suggest how this might be done, but one can imagine a student group keeping an eye on the likely impact of proposals affecting the curriculum, a staff group looking at proposals for reorganizing administrative units such as Kathleen has done in the Law School, and groups of faculty reporting to the deans and provost about plans within schools and across schools. And ideally, these various conversations would be linked to some agreed-upon principles about who we are as a university community, but this raises the question: What are these principles?

I believe there is a consensus on the general principles given by President Hennessy just now. First, we have an entrepreneurial faculty committed to excellence in research and teaching, a faculty that attracts and is attracted by the finest undergraduate and graduate students one can find in a single campus. And we have a staff that is creative, resourceful, professional and dedicated to the university's mission. These features we must conserve. Second, concerning our style of being, we believe that our excellence and attractiveness depend on our strengths in the traditional disciplines and in interdisciplinary research and teaching; on enhancing the gender and ethnic diversity of the faculty, and the attention we give to the comparative study of culture, race and ethnicity; on increasing the interaction between undergraduates and the faculty both through small seminars and directed or independent research; and on maintaining the enlightened relationship we have with our alumni and donors. These aspects of our institutional culture also we must conserve.

These principles are useful in evaluating the likely impact of proposed budget cuts in a finished budget reduction plan. However, in the early stages of generating a plan, these principles have to be supplemented out of more constraining principles. One such principle is that budget reduction targets should not be across-the-board cuts, and I will spend the rest of my allotted time commenting on this principle.

Across-the-board cuts in general funds are attractive because it is easy to think of them as fair. We can say, "All of us got 10 percent cuts. We are in this thing together, and that's fair." This idea of fairness as the equality of proportion goes back at least as far as Aristotle, but the problem with proportionality as a budget-cutting principle is that it discourages discussion, for example, of the ways different schools and programs can use more efficiently their general funds and other funds. This is why we should accept at the outset that cuts will not necessarily be proportional across units.

But if cuts are not to be proportional, how much spread might there be in the cuts assigned to different units, and what are these units? The seven schools? The programs within a school? Or even the different stakeholders -- faculty, students and staff? Some of us might feel that a certain program or a school should be given the maximum possible cut. That is, it should be eliminated. An argument you sometimes hear is that this is the only sure sign that we are serious; people want to see blood. Others might feel that a certain program or a certain group of stakeholders is so precious that it should escape the scalpel altogether. These are questions that should be settled early.

My own view is that the best starting point is to say cuts will not be across the board; all units should expect some cuts; and it is unlikely that any unit will be eliminated. You see, this limits the amount of posturing, the amount of pleading of special interest, and injects the right amount of seriousness of purpose so that we can get on with the business of constructing plans.

And what about the stakeholders? For me, it's hard to see why there should be any change in the size of the undergraduate student body. I never understood those economics. But it's quite natural to think about managing the sizes of the faculty, the graduate student body and the staff. The dependence of the quality of the institution on the quality of the faculty has a financial parallel, namely, that I do not think that we can take a cut of as large as 10 percent without managing the faculty size downward, for example, by up to 2 percent. And the least disruptive way to do so might be by reducing the number of faculty search authorizations, but after 12 years, this line of thinking may be somewhat anachronistic.

To conclude, my remarks are predicated on the fact that the cuts you are contemplating are significant. First, the budget reduction process should be consultative, because this is a good way for decision-makers to learn about the value of specific programs and attempts to lead the various stakeholders to endorse the final plan, even if some of their cherished initiatives are cut. Second, the consultative process should be infused with some guiding principles. We have to accept, however, that these principles often conflict with each other. Also, the relevance of a given principle, like proportionality, depends on whether it is applied to schools or to subdisciplines within a department.

For these reasons, we have to be principled yet flexible. We should not be too dogmatic in our conversations. This said, our past experience with similar challenges bears recalling. We emerged stronger after those sizeable cuts 12 years ago, and I believe that we will get through these times as well in good shape.

Thank you.


Hennessy: Thank you, Ewart. Michael?

Michael Keller: One is never so reminded that we live in a place with giants as being on the podium with you three people. Let me tell a story about something that happened to me in the spring of 1994. I had a conversation initiated by a faculty member, a junior faculty member who has since become a senior faculty member, who observed that the World Wide Web had become visible and available to everyone. ... We put in lots more power; we built larger electrical closets; we built larger telecommunications closets. We tried to focus the building on the students and the faculty and not on the staff; we tried to put the staff that need to be closest to the students and faculty close to where those students and faculty would come to read and to do research.

The results of both of those opportunities have been numerous, but they've given us confidence to think out of the box. And I must say that this staff at SUL/AIR [Stanford University Libraries/Academic Information Resources] is remarkable in its ability to accept the kinds of challenges we've been getting; so remarkable, that we voluntarily took an internal cut for reallocation in the course, I think, of 1999, a very fine year in many respects.

We also took on the challenge of examining ourself, and I think that one of the key factors in what both Kathleen and Ewart have remarked upon is that of being brave enough to examine what we're up to, and deciding if what we're up to is right or could be done better. We took the challenge from Condi [Provost Condoleezza Rice] and Gerhard [President Gerhard Casper] in 1994 to innovate but not to come back to them for any new money. One of the things that we knew we had to do was grow the size of the academic computing staff, and one of the things I thought we could do was to take more advantage of information technology to do some of our back-of-the-house operations in the areas of acquiring material and providing catalog records for that material, processing it.

So we looked to the back-of-the-house operation. We call it our Technical Processing Division, and in the course of a couple of years, that group of managers and staff with little outside help, but not really very much, came up with a plan which in effect reengineered the ways in which we did the work for Stanford. And in the course of doing that, we figured out how to move a fairly large number of billets from technical processing mainly into academic computing, but they also figured out how to do as much with less staff and to do it faster, so books now come into the house, sometimes preprocessed by our vendors, and go out of the house and onto the shelves to the various libraries around campus very much in shorter time than in previous years.

It's been a remarkable set of developments, and undertaking this reengineering we knew that we would never stop reengineering it. It goes on to this day. We still are finding staff who take the imitative to figure out how to do something better and faster. Today I just saw a working system that allows us to check in newspaper issues at a rate about four or five times faster than the systems that we adopted only a few years ago. That will make a big difference to our ability to shrink that staff either to respond to a requirement or to move a resource somewhere else where it may be more needed.

Another big principle for us has been to try to build user and reader self-sufficiency. What were the things that we could do that would make it easier, more intuitive for students and faculty to seek and use information on their own? Lots of things have been done. In particular, we have on the part of our curators, our subject curators, built websites that are guides to disciplines. These are not particularly useful for those who are deeply involved within their own disciplines -- they already know the stuff. But for undergraduate students, for folks who come new to a discipline or just dip into it for a minute and then want to come out of it, it's been marvelous. John Rawlings over there has done a great job on our medieval studies website. It's one that I use in examples all the time, but there are others. Our Latin American site is terrific. This has been a way for faculty and students who come to Latin American studies or medieval studies or to the history of science late at night in some distant place when our staff aren't available to them to do their own work.

We have also worked very hard in the last year with Andrea Lunsford in the Program in Writing and Rhetoric to develop an online instruction program for students in that program, to begin to know how to use this very complicated information resource we call the university libraries and academic computing.

We have had to take some risks, and I think it's a remarkable feature of Stanford's character and the understanding of the Stanford community that allows us to take these risks. Sometimes we succeed, sometimes we fail. I want to tell you about a failure. A couple of years ago, it became apparent to us that there was a possibility that we could increase the productivity of our small conservation staff, which is maybe 15 people, to do a lot more work on the huge amount of paper that we have sitting on our shelves and books that are acid-laden, that are self-destructing over time. The idea was to form a joint business venture with a German firm that had reengineered a lot of the processes that are used, or could be used, to strengthen paper and to wash the acid out. About five or six people from the conservation staff and numerous other folks in SUL/AIR worked very hard for a year to see whether or not, first of all, whether these methods were ones that we could use and, second, whether the joint business venture was a smart thing to do. In the end we decided that most of the processes were ones that we could use, but we decided that the company itself was not one that we wanted to do business with as a partner. So we withdrew from the exercise. We spent a lot of time. I think the time might be seen to have been wasted because we didn't end up entering into a joint business venture. On the other hand, we all learned a lot about what was possible, and we learned that we actually did know a lot.

Another thing that has to be said, especially after we've taken two rounds of budget cuts these last two years, is there is an inexhaustible supply of new approaches, that we can't constantly keep ratcheting up or down or making reallocations, that the community itself has to help make some choices about what won't be done as much or as well in the future as has been done as much or as well in the past. This is a hateful thing to say, it's a hurtful thing to try to implement, but it's very important that we understand that there's only so far you can go in reengineering. At the end of the day, if hard choices need to be made, we all have to understand that some of those hard choices might mean that the library hours are cut. Certainly it has meant over the last couple of years that we are acquiring fewer things. We've had to account for that by putting in alternative systems like a document delivery service for articles that are in journals that we no longer acquire.

Some principles that we have acquired. Really, there are only a couple. One is that we should not shrink from taking on big tasks, and if a big task shows that it might produce some benefit for us several years out after some investment, it might be the sort of thing that we need to do. HighWire was one such big task. We're now thinking about mass digitization. How can we get a lot more digital information or information digitized so that more students and more faculty can work when they want to work, where they want to work rather than having to come in and pull the material off the shelf?

Another principle that we've invoked is that of maintaining what I call the gene pool. As our staff has shrunk, by attrition mainly but this year also by some layoffs, we have had to think about what qualities, what experience, what core knowledge we needed to have absolutely in place so that we could continue to be of service in some fashion or other to the many folks who depend on us. And also, to prepare us to respond to the time when things get better. We used to have several bibliographers, one or two working full time in some disciplines, and now we have parts of bibliographers working in some disciplines. They figured out how to use the systems or how to invent new ones, and how to use vendors in new and creative ways. But we need to have represented on our staff very highly qualified individuals to handle those special arenas. If we don't have them at all, we can no longer respond immediately, and we are not going to be ready to build back when the time comes.

I would say that Stanford is blessed. Stanford from the beginning has been a pioneering institution, and I think the pioneering spirit prevails, and as we go through these hard times, that pioneering spirit will help us find the ways to continue our missions, if in different ways.



Hennessy: Thank you, Michael. Thank you, Kathleen. Let me open the floor for questions, either to our two remaining panel members or me.