Back to the future: cost control Chinese style

Ray Campbell

As an American style law school in China, Peking University’s School of Transnational Law in Shenzhen, China, faces special financial challenges.  American tuition levels would be unaffordable for all but the wealthiest Chinese.  Student loans come from the private sector, not the government, and typically must be repaid or rolled over shortly after graduation. While western firms in and near China can pay associate salaries comparable to the US or Great Britain, Chinese mainland law firms and corporations offer much, much lower starting salaries.  Scholarship aid, compared to well-endowed American schools, is hard to find. All of this means that we must keep tuition levels as low as possible, all without compromising our mission of offering a world class western legal education in China.

While our revenue is held to Chinese levels, not all of our expenses are.  Western tenure track faculty salaries must be competitive with US levels in order to compete in the hiring marketplace. Books and online databases sometimes come with a lower price tag, but not always. Travel expenses to the US and Europe cost far more than travel within a region.

We do have some financial advantages. The city of Shenzhen and Peking University provide and maintain our building, including our purpose built law school designed by Kohn Pedersen Fox due to be completed next year.  Our staff, who more than match typical US support staff in credentials and dedication, are paid on a much lower scale than their western counterparts.  The obvious benefits of spending time in China allow us to attract at comparatively low cost highly credentialed recent law graduates to teach legal research and writing.  The lure of China and the chance to participate in our special experiment also allow us to attract remarkably prominent American and European scholars as visitors, without incurring the full market cost or benefits load that would be required in the US.

Even so, our model requires us to focus fanatically on costs so we deliver a world class education at a price point affordable to Chinese national students. At roughly $10,000 per year, our annual tuition comes in several times higher than typical Chinese university tuition, but below almost all US law schools. (Room and board, with four students typically sharing a small suite, adds about another $1,500).

To make the numbers work, our dean, Jeff Lehman, tests every class against a simple metric – cost per credit hour.  Jeff is neither stupid nor rigid, so the cost per credit hour is a guide, not an inflexible hurdle. We have courses – such as our cross border immigration clinic – that don’t meet the hurdle rate. That said, measuring our initiatives against this standard drives what courses we offer and how we teach.  Our model looks in some ways like law US schools of the 60s and 70s, based on large interactive lectures covering core subjects.

Compared to most US schools, we teach more courses, with four six week teaching modules per year being the standard once a new professor hits full load. We also teach more lecture courses and few seminars. Our first year class now numbers more than 70 students, and the required first year doctrinal courses all include the entire class, with only the legal writing broken into small groups. Upper level courses depend on sign up, but rarely involve seminars. I’m not aware of any classes going over 100 students, but many more upper year courses have 50 to 70 students than have 15. (Our students do not lack for upper level research and writing options, however – in addition to our new law review and several versions of moot court and moot negotiation/counseling competitions, we require and supervise an original research thesis, presented in both English and Mandarin versions.)  Our Chinese law classes are all taught in large lecture format by Chinese professors, many from Peking University’s Beijing campus. We have relatively more short term visitors than most US schools. All of this allows Jeff to hit his cost per credit hour metric.

Despite the high, by Chinese standards, cost of our school, it’s looking like a pretty good investment for most of our students, who are just now reaching the job market. There, again, they have some special characteristics. Our students, who typically graduated in a non-law major at the top of their undergraduate university classes and will hold a degree from mainland China’s highest ranked university, are not just generic lawyers. They are trained in both western and Chinese law, and are able to function professionally in either Mandarin or English. They have been trained not just in western law, but in western cultural mores, and can help bridge cultural and linguistic gaps in disputes and negotiations. They bring unique perspectives to a country still working on rebuilding and reforming its legal system, and also offer a hard to find package of skills to domestic and international employers. That our students need not fear commoditization, but fill a unique niche, is perhaps worth mulling over by US deans and faculty thinking about how their schools can offer value going forward.

Comments

[John Flood]

I'm despairing of the way English legal education is going at the moment. The Peking model may provide a new way in this era of uncertainty for graduates. You seem to have engaged the student body in a an inclusive and encompassing way that is to be admired.

[Bill Henderson]

Ray, thanks for the fiscal aspects of STL's model. If I were an US student, I might be tempted to apply. Any evidence of that yet? bh.

[Ray Campbell]

We are doing a few student exchanges with North American and European schools, and I think those students find it to be a very interesting experience. To the best of my knowledge, we aren't hearing from US students who would substitute our school for a US one, and I don't really see that as being our future. We're in a different network of relationships. US firms aren't going to do on campus interviewing for their US offices in Shenzhen. Peking University has a lot of brand power in China, but not so much in Chicago or Atlanta. There are also very, very few US students with the fluency in Mandarin to achieve what our students offer on the job market, which is bilingual and bicultural lawyers who can live comfortably at the intersection of east and west. For some of the same reasons you don't see that many Americans going to top European or Asian business schools and then heading back home, I don't think you would see US students heading to us. T Just as happened with business schools, I would expect the demand for lower cost post graduate education to be met with Executive MBA type models or online models, once regulation allows.