It recently occurred to me that there are several big-name universities that don't have law schools, even though a law school established at any of those institutions would probably do well. Princeton arguably heads this list, along with Brown, Johns Hopkins, Rice, and Tufts. Brandeis University also doesn't have a law school (ironically, for a prominent university named after a Supreme Court justice).
Why these universities haven't established law schools is a bit of a mystery (at least to me). Law schools tend to bring in net revenue for the university. This is even more likely to be true at a big-name institution that can quickly attract good faculty and students. If Princeton were to establish a law school tommorrow, appoint a credible dean, and provide adequate initial financial backing, they could very quickly turn it into a highly successful (and profitable) enterprise. Many good students would come just because of the Princeton name, and most outstanding scholars who are not already at top 20 or top 30 institutions might well be willing to move to Princeton if asked.
Why have these schools in effect left money lying on the table? I don't know for sure (and the reasons may differ from school to school). But here are a few conjectures:
1. ABA accreditation requirements.
ABA accreditation requirements artificially raise the costs of establishing a new law school. However, wealthy institutions like Princeton or Brown can surely meet these expenses and still make a profit on the school. So I doubt this is a crucial factor.
2. Institutional inertia.
This probably is a factor, as in most large bureaucracies. Still, many universities (including George Mason in 1979) have established new law schools, so one would have to explain why Princeton, Brown, et al., have more inertia than other schools.
3. The inefficiency of non-profit institutions.
If a for-profit firm increases its revenue, the stockholders will benefit directly. This gives them an incentive to exploit new profit opportunities to the hilt. In a nonprofit such as a university, by contrast, there are no residual claimants to additional revenue. If the university establishes a new law school and increases its revenue as a result, the administration won't get a pay raise or otherwise directly benefit. That reduces their incentive to exploit opportunities to increase revenue, and may account for the failure to create what might well be highly profitable law schools. That said, universities surely do take all sorts of actions to increase revenue streams. And some have even established law schools for this purpose. So this factor too can't explain why several specific institutions have failed to establish law schools even though most of their peers have.
Ultimately, I suspect that the initial failure to establish a law school may have resulted from chance factors that were then reinforced by a combination of 2 and 3 above. If you know more about the real reasons why these big-name universities have no law schools, feel free to comment.
UPDATE: Various commenters suggest that these universities choose not to have a law school because of their desire to focus on undergraduate education. That may indeed be the right explanation, though several of these institutions (including Johns Hopkins, Tufts, and Rice) have other professional schools on campus. But it doesn't strike me as a very compelling reason not to establish a law school. If the law school were to drain resources away form undergrad education, there might indeed be a conflict between the two. In fact, however, a law school is likely to bring in net revenue that could be used to improve undergraduate education. Moreover, some law school professors (especially at elite schools) teach courses that undergraduates might be interested in taking, as sometimes happened at Yale, when I was a law student there.
Even if a law school adds resources to undergrad education instead of draining them, it's possible that its presence could detract from undergraduate education in some other, more subtle way. But it's hard for me to see how. If Yale Law School were closed down tommorrow, would undergraduate education at Yale improve? Are undergraduates at Yale currently worse off than at Princeton in some way traceable to the fact that Yale has a law school and Princeton doesn't? Possibly. But I remain skeptical. I'm not arguing that Princeton or any other institution that doesn't yet have a law school should necessarily create one. But the undergraduate education rationale for not doing so seems dubious.