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Small Colleges Are Lawyering Up. Here’s Why.

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Higher education is facing a tsunami of litigation. In addition to the standard docket of lawsuits claiming that a university discriminated against applicants who were denied admission or that a faculty member was unfairly turned down for tenure, a wave of high-profile cases have resulted in universities offering large settlements or having multi-millon dollar verdicts returned against them.

Michigan State University announced a $500 million settlement with the assault survivors of Dr. Larry Nassar, a former physician at the institution. (That’s about five times greater than the $109 million Penn State paid to resolve the Jerry Sandusky sex abuse case.) And it’s one of several cases involving charges of criminal misconduct against former university officials, including a $215 million class-action settlement with former patients of Dr. George Tyndall, a campus gynecologist at University of Southern California; and a lawsuit — now involving about 350 former students — alleging that Ohio State University failed to protect students and athletes from Richard Strauss, a deceased doctor who worked for the athletics department.

Elsewhere, an $11 million dollar libel verdict was returned against Oberlin College, Title IX lawsuits are on the rise, and cases involving campus discrimination policies, free speech protections, and oversight of fraternities are looming. All signs point to an acceleration of legal cases and causes being pressed against colleges and universities.

While most higher ed institutions find it necessary to engage outside legal counsel to represent them in litigation, an increasing number are beginning to hire their own general counsel as key members of campus leadership teams. That’s the conclusion of a recent report by Anne Coyle and P.J. Neal of Russell Reynolds Associates, the leadership advisory and executive search firm. They suggest that as more and more legal issues rise, institutions are shifting away from relying on external counsels—who tend to be more reactive than proactive—and toward hiring a general counsel to handle the bulk of an institution’s legal needs internally, reserving the use of external counsel for additional assistance as needed.

Large universities have long employed general counsel, often staffed with an office of several associates and paralegals. Recently, however, Coyle and Neal claim there’s been a spike in top liberal arts colleges adding general counsel to the staff.

In 2019, they conducted a survey of the US News and World Report Top 50 Liberal Arts Colleges to determine the extent to which these schools employed in-house counsel.

Thirty of the colleges reported they had hired someone to be General Counsel or to fill that role, but with a different title. In most cases, the position focused exclusively on legal representation, but in some institutions, the job was combined with additional responsibilities like Executive Director for Risk Management and Legal Affairs or Chief Policy Officer/General Counsel.

Smaller institutions may worry about the added costs of hiring a general counsel, but Coyle and Neal argue that going in-house ultimately results in substantial savings in contracted legal work. Because college general counsels often are able to resolve issues themselves, many proactively, they can be more conservative in their use of external counsel and the amount an institution spends on them.

As evidence, they point to recent IRS 990 tax filings for liberal arts colleges that do not have in-house legal counsel. Those documents reveal that many colleges now spend so much on legal expenses that outside law firms are listed among their five highest-compensated independent contractors.

Coyle and Neal caution that “while it may be tempting to combine the general counsel role with another senior position, it also creates challenges. A general counsel who also leads a function (like HR or finance) would have trouble providing independent legal oversight and guidance of those operations.” Similarly, a general counsel with other management duties will probably have to rely more heavily on outside counsel to handle an institution’s legal needs, resulting in added expense. 

The addition of non-faculty staff to a college’s payroll is often criticized as administrative bloat, especially in the eyes of faculty. In the case of general counsel however, a good case can be made for the investment both on financial and policy grounds. Small colleges, in particular, are discovering that adding general counsel can be a cost-effective way to avoid litigation.

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