The High Costs of a Harvard Defense

There aren't a whole lot of things Harvard administrators know for sure about the ongoing Justice Department antitrust investigation of more than 50 schools nationwide.

They say they don't know exactly what the Justice Department is after, or why the department launched the investigation in the first place.

One thing they do know, however, is that defending themselves is going to cost money. A lot of money.

"During the first few weeks, it's going to cost all the schools several million dollars," says Vice President and General Counsel Daniel Steiner '54.

Steiner should know. When the department launched its investigation this summer, notifying Harvard and a handful of other schools that they were being scrutinized for possible antitrust violations, Steiner and his staff drew the unenviable task of finding and organizing the necessary records.

All information dealing with the setting of faculty salaries, financial aid and tuition were subpoenaed in the probe, which is investigating reports of collusion by the colleges. The subpoenaed records, say educators and lawyers, include almost all university financial documents.

"One administrator at one school said there's hardly a document that doesn't involve" any of the three areas, says David Merkowitz, spokesperson for the American Council on Eduation.

Administrators at most of the schools complained that the investigation's scope was too broad, and asked the Justice Department to either pare down its requests or extend the deadlines for compiling the records. The department did a little bit of both, but it was still too much for the in-house legal staffs at most of the schools.

That, plus the fact that few university lawyers have an antitrust background, has led the schools to look outside for help. Most of them found it in Washington, where the nation's leading antitrust lawyers practice.

"Most schools are not familiar with antitrust investigations and what they entail," says Ronald G. Carr, who is representing Princeton University for the Washington-based firm of Morrison and Foerster.

Like Princeton, Harvard went after a big-name firm, settling on Daniel K. Mayers '55, a senior partner for Wilmer, Cutler and Pickering. The choice surprised few: Wilmer, Cutler's attorneys are considered the most talented, not to mention the most well-connected, corporate litigators in the capital.

But D.C. talent doesn't come cheap.

Although Steiner says he's made no long-range estimates of how much the investigation will cost the University in terms of legal fees, he says it's expected to last for several years and will place a serious burden on Harvard's legal budget.

"The legal fees will mount up," he says. "This is true for Harvard, and it is true for every other institution involved."

At smaller schools like Smith College, administrators say they're concerned students--whom the investigation is aimed at helping--will eventually pay the price.

"It's ironic that answering their demands will involve considerable expense," says M. Janet McNeill, spokesperson for Smith College. "That means there are some other things we could be doing for the college but might not be able to."

For all the trouble, however, Steiner still hasn't lost his sense of humor about the investigation.

"The legal costs come out of my budget, so my family won't be eating for a while," Steiner says with a laugh. "But that's all right. Anything for Harvard."