Inflation & CRIV

Recently inflation is in the news (see the Wall Street Journal, New York Times, and AP). Rising inflation is a hot economic topic as the prices for many common items soar. Even bacon is 20% more expensive from 2020 to 2021. Bacon!

So, what does this have to do with CRIV?

Well, potentially nothing, but it also might be a useful metric in gauging the reasonability of vendor pricing increases during negotiation of renewals.

The Department of Labor created a Consumer Price Index (CPI) Inflation Calculator available here. This calculator allows you to enter in prices for a particular year and month and see the equivalent in other years & months. The calculator lets users compare prices from 1913 to present. Although the calculator is handily displayed on one screen, there are extensive resources to look behind the curtain available.

For example, $10,000 in November 2016 has the same buying power as $11,459.94 in October 2021. Furthermore, that same $10,000 in November 2006 now has a buying power of $13,726.50 today. Needless to say, this calculator can be a great distraction but it does help provide some context for vendor pricing.

Of course, there are drawbacks to this resource. Notable, it is the Consumer Price Index. It is looking at the buying power of “. . . All Urban Consumers (CPI-U) U.S. city average series for all items, not seasonally adjusted”. Needless to say, there are many categories such as food and gasoline, but legal databases and books are not included.

But don’t worry bacon costs are well documented in the CPI.

Is this background useful when negotiating with vendors? Are law library resources too specialized that a general consumer price index is too disconnected to be useful? Should there be a law library inflation index? Let me know in the comments below.

Rising FTEs and Budgeting

According to the Law School Admissions Council (LSAC) the number of applicants and number of overall applications are up over 20% and 30% respectively. LSAC’s website is surprisingly transparent as it includes a publicly available graph charting the week to week total number of applications and total number of applicants. Additionally, users can easily compare between the last five years on the chart to see the trends in admissions. While this may not necessarily translate into higher incoming 1L classes, and it is not institution specific, it does raise some questions such as:

  • Are any of your schools databases tied to FTE (full time equivalents)?
  • Do you expect your school’s FTE to increase based on the national trends?

While looking at national numbers as a crystal ball for individual law schools may be tricky, it is possible to see trends in a larger incoming class and use this number to assist in budgeting for FTE-sensitive databases. Checking with your own Admissions office can help sharpen predictions as well.

Has anyone found it effective to try to predict future FTEs when budgeting? Is it closer to psychic predictions than science? Comment below!

Further useful links: The TaxProf Blog frequently reports and analyzes future class sizes using the LSAC data above.