In addition, only 34 percent of students in New England Law’s 2011 graduating class were able to land jobs requiring a law degree within nine months of graduating, according to the American Bar Association, compared with 68 percent at Boston College Law School, and 90 percent at Harvard Law.
Yet, students at New England Law pay almost as much in tuition as students attending law schools where graduates generally have more success finding meaningful employment. Boston College law students, for instance, pay only about $1,000 a year more than New England Law students.
But New England Law’s escalating tuition has been a boon to its bottom line. The school — a tax-exempt, charitable organization, like most other colleges and universities in the region — reported that revenues exceeded expenses by $10 million in the 2011 fiscal year, which would represent a profit of roughly 30 percent if it were a for-profit company.
O’Brien said the school’s robust finances have allowed New England Law to triple financial aid, noting that 60 percent of students receive some form of scholarship from the school.
The school’s budget surplus translates into roughly $9,000 for every student at New England Law, suggesting that officials could significantly reduce tuition and still not lose money for the year.
Named dean in 1988
O’Brien was already a handsomely paid law school dean by 2007, drawing a salary similar to Harvard Law School dean Elena Kagan, who is now on the US Supreme Court. But in March of that year, New England Law’s longtime board chairman passed away, clearing the way for Foster to take over as board chairman and for O’Brien’s pay to skyrocket.
By that time, O’Brien had spent more than 20 years at New England Law. A native of Staten Island, he had graduated from Manhattan College, a Catholic school in the Bronx, before graduating first in the class of 1977 at what was then New England School of Law.
For the next seven years, O’Brien labored as an attorney for the IRS before returning to New England Law as a professor of constitutional law and personal income taxation and, later, associate dean. In 1988, when he was still only in his late 30s, he was handed the reins of a school known for offering students of lesser means or less than sterling credentials a chance for legal training. The school was founded, in 1908, as Portia Law School, a trail-blazing law school for women. It became fully coeducational in 1938.
When Foster was named chairman of the board, in 2007, he had already served as a board member for more than 20 years, throughout O’Brien’s entire tenure as dean. And by then, O’Brien had developed a new need for funds: He and his wife of 30 years were beginning divorce proceedings. Under their separation agreement, O’Brien’s wife got ownership of the couple’s Mendon home, while he resumed single life in a Watertown condominium and agreed to make alimony payments of $1,800 a week.
Then, in 2008, the board boosted O’Brien’s salary from $437,900 to nearly $615,000, a 40 percent increase in one year. Sweetening the deal further, the board included a $650,000 “forgivable loan,” under which O’Brien’s salary would include money to help repay the debt. If he stayed at the school for another 10 years, the board would forgive the entire loan.
O’Brien confirmed in an interview that the loan was crucial to his finances, giving him the cash to pay obligations to his former wife and to pay for his primary residence. He also confirmed that he used part of the loan to cover the $475,000 price of his Delray Beach condo, an 1,870-square-foot unit in a beach front development in Florida.
Board members say they had to increase O’Brien’s compensation in 2008 because, even though O’Brien had been dean for two decades by then, other schools were trying to recruit him away, in part because of the national reputation he was building through his volunteer work with the American Bar Association.
Loans to individuals by colleges and university at favorable terms are not unheard of, but they are usually made to lure prominent or promising professors to expensive housing markets or to keep them from moving to another school.
In O’Brien’s case, the board said in a series of written statements to the Globe, the loan was an incentive to keep O’Brien at the school. “This incentive is a retention tool, plain and simple,” the board said.
But some outside analysts question whether nonprofit organizations should be making highly discounted loans to insiders, in part because they may have difficulty collecting on the loans if the recipients fail to honor their commitments.Continued...