It was only a matter of time. As the National Law Journal reports, Vermont Law School has initiated a program of voluntary staff layoffs to address a $3.3 million budget shortfall brought on by a 14 percent decline in enrollments.

Dean Marc Mihaly said, "Sooner or later, I think everyone will have to face what we're facing right now." The school has seen its average enrollment drop from 200 annually to 150 in 2010, rebounding to 170 in 2011.

It's true that all law schools must change. However, the situation at Vermont is more grim than most, given its combination of high student debt and poor job prospects. Brian Tamanaha noted the troubles at Vermont in his book "Failing Law Schools," noting its average student debt of $127,914, with 93 percent of students holding some student loans, and its "JD required" job placement rate of just 50 percent for the 2009 class.

Vermont is also looking to add LL.M. and certificate programs to bolster its revenue.