They are likely to see their legal bills spike as they respond to Congressional investigations
Columbia University was sued for a second time over its response to an explosion of antisemitism on campus. The suit is yet another indication that top US universities have a long road to redemption in the public eye, a path that could lead to massive legal expenses.
Schools including Harvard, Penn and Columbia are likely to see their legal bills spike as they respond to Congressional investigations and lawsuits over their handling of antisemitism complaints in the wake of the Hamas terror attacks in Israel.
While the legal costs will be a small percentage of their overall budgets, the universities will shell out millions more over the next few years to contain the reputational damage they’ve sustained. And the increased costs come at a time when many donors are pulling back amid the controversy.
The legal threat stems from the universities’ handling of an increase in campus antisemitism that emerged amid broader protests over the Israeli army’s response to the Oct. 7 Hamas terrorist attacks. The attacks killed some 1,200 Israelis, while Israel’s invasion of Gaza has killed more than 29,000 people, according to health officials in the Hamas-run territory, prompting some protesters to call the war genocide. Many protesters are accused of collectively blaming all Jews for what’s happening in Gaza, shining a light on entrenched antisemitism and forcing universities to balance free speech rights against the safety of students.
In recent years, elite schools’ annual legals bills have ranged from $15 million to $35 million. But the costs can go up dramatically, as they did for Harvard when it fought lawsuits related to affirmative actions policies all the way up the Supreme Court.
“Any time congressional investigations and lawsuits occur, especially those dealing with discrimination or harassment of any type, legal fees will increase, perhaps significantly,” said Daniel Romano, an accountant at Grant Thornton LLP who advises universities and non-profits.
Widespread reports of campus harassment of Jewish students, aggravated by slow responses from university administrators, spurred two Congressional inquiries.
In addition to the inquiries, a spate of lawsuits have been filed against Harvard, the University of California, Berkeley and other top schools by Jewish students alleging that the institutions have done little to protect them from harassment on campus, in violation of Title VI of the Civil Rights Act of 1964.
In the latest suit against Columbia on Wednesday, Jewish students claim the Ivy League school had permitted “endemic” antisemitism to flourish for decades.
Ben Chang, a spokesman at Columbia, declined to comment on the lawsuit or the legal fees. Officials at Penn declined to immediately comment and Harvard didn’t immediately reply to a message seeking comment.
As investigations into the internal operations of these universities move forward and harassment lawsuits proliferate, the schools are going to have to dig into their coffers to fight legal battles on multiple fronts.
Those coffers are deep. Harvard, with it’s $50.9 billion endowment, has been spending just over $20 million annually on legal expenses since 2019, according to IRS filings. Among the Ivies, Columbia spends the most on lawyers, with legal expenses of $35.8 million for fiscal 2021, and $36.9 million the year before.
Legal expenses often increases in response to high-profile litigation. When Harvard was fighting a lawsuit challenging its affirmative action policies, legal expenses jumped from $13.4 million in fiscal 2017 to $27.4 million the following year. Between fiscal 2012 and 2014, Columbia’s legal expenses jumped from $30 million to $41.9 million as it fought an intellectual property lawsuit.
Current figures on Harvard’s legal spending aren’t available, but the school recently added the law firm of King & Spalding to manage its response to the Congressional probes.
Read more: Harvard Hires New Law Firm After Gay’s Legalese Deepened Turmoil
Harvard’s decision to beef up its legal team hasn’t improved its standing with the Committee on Education and the Workforce or its chairwoman, Rep. Virginia Foxx, a Republican from North Carolina.
“Harvard, the world’s wealthiest university, has been represented by some of the largest and most renowned law firms in America,” Foxx wrote earlier this month, adding that after two months of document requests, the school had “provided only a single meaningful document.”
The lack of responsiveness led Foxx’s committee to issue subpoenas last week to interim president Alan Garber, Harvard Corporation senior fellow Penny Pritzker and Narv Narvekar, chief executive of the Harvard Management Company, which oversee’s the school’s endowment.
Presidents Stumble
At a December hearing, the presidents of Harvard, Penn and MIT stumbled badly, tiptoeing around a question of whether calling for the genocide of Jews would be against their schools’ policies on bullying and harassment. Claudine Gay of Harvard responded that it would depend on the context. Liz Magill of Penn gave a similar answer. Both resigned within weeks, and Congressional committees stepped up their probe of antisemitism in higher education.
The increased litigation comes when some colleges are opting to settle lawsuits to save on fees. Yale, Columbia, Brown, Duke and Emory last month agreed to pay $104.5 million to resolve a class action that accused them and a dozen other schools of colluding on financial aid. Brown denied the allegations and agreed to resolve the litigation on the express condition that the settlement includes no admission of wrongdoing.
But the events of the past few months, punctuated by the resignation of Harvard’s president over allegations of plagiarism, have rattled elite institutions as nothing else in recent memory. Wall Street donors, including Bill Ackman, Ken Griffin and Mark Rowan, have urged other benefactors to stop writing checks, or to pledge a single dollar in protest.
Still, legal expenses are a minor cost for top universities. Over the last seven years for which the data are available, Harvard’s legal expenses have fluctuated between 0.25 percent and 0.5 percent of what it describes as its “total functional expenses.”
The antisemitism investigations and lawsuits are only going to make matters worse, as they did for Harvard when it fought a multi-year legal battle over race discrimination in its admissions department. By the end of the litigation, which resulted in an historic loss at the Supreme Court, the world got to peer into the black box of Harvard’s selection process. Members of Congress are certain to highlight every embarrassing episode they uncover.
“The worst of their problems is that the process is unfolding in public, and that will keep them in the news for the wrong reason, one that pulls the brand in the opposite direction of where it needs to go,” said Allen Adamson, co-founder of the marketing firm Metaforce.
The issue continues to haunt universities in and out of the courtroom.
When an antisemitic cartoon appeared in the social media feeds of two pro-Palestinian student groups last weekend, Garber immediately condemned it. According to a statement from Garber, the cartoon depicted an Arab man and a Black man with nooses around their necks, which were held by a hand featuring a Star of David and a dollar sign.
“While the groups associated with the posting or sharing of the cartoon have since sought to distance themselves from it in various ways, the damage remains, and our condemnation stands,” Garber wrote.
Copyright Bloomberg News
