Five respected judges and lawyers started the Charleston School of Law a decade ago with the lofty goal of training attorneys committed to public service.
School of Law enrollment
Number of students at Charleston School of Law:
Year Full-time Part-time Total
2004 137 63 200
2005 275 117 392
2006 357 223 580
2007 379 205 584
2008 409 204 613
2009 453 216 669
2010 523 178 701
2011 517 191 708
2012 447 184 631
2013 427 110 537
But beginning in 2010, the well-connected founders and owners with deep South Carolina roots began draining money from the school, withdrawing $25 million in profits by 2013 that they split among themselves.
The license decision
The state Commission on Higher Education will decide whether to grant InfiLaw System a license to operate the Charleston School of Law based on criteria in the following categories:
Academics and curriculum
Reputation and character
The owners had a great deal of support from the Charleston community to launch the school, including a below-market-rate land deal from the city aimed at helping it remain on the peninsula and earn accreditation from the American Bar Association.
Higher Education Commission
The Commission on Higher Education is composed of 15 members*
Seven members are nominated by the legislative delegations in each of the state's seven congressional districts. The nominees are affirmed by the governor.
Four at-large members are selected by the governor and affirmed by the Senate.
Three members represent the state's research, comprehensive and technical higher education institutions, selected by the governor and affirmed by the Senate.
One member is a president of a private higher education institution, selected by the governor and affirmed by the Senate.
*Currently only 11 commission seats are filled.
Source: S.C. Commission on Higher Education
Their taking out the profits instead of re-investing in the school has left it in such financial shambles its future remains uncertain.
Kevin Hall, a Columbia lawyer who represents InfiLaw System, a company trying to purchase the school, revealed the surprising financial information about founders Robert Carr, George Kosko, Ralph McCullough, Alex Sanders and Ed Westbrook at a public hearing last week. "The Charleston School of Law, ladies and gentlemen, is in a financial tailspin," Hall said.
Carr, Kosko and Westbrook, the three remaining owners, confirmed Hall's description of the school's financial situation, and they all agreed that it got that way because owners for years had been pulling profits from the institution. But they disagree sharply on the school's future.
While Carr and Kosko want desperately for the sale to the for-profit InfiLaw to go through, Westbrook is pushing for it to be run like a community-based organization. And he vowed to financially back that plan.
"There's no question that InfiLaw is the most lucrative option for the founders," Westbrook said, adding a community-based model would be better for the school, its students and the community.
McCullough and Sanders retired in July, just days before the owners announced that they had entered into a management services agreement with InfiLaw. They later said a sale was in the works. Hall said InfiLaw also advanced the school $6 million to buy out Sanders and McCullough.
He also said InfiLaw still wants to buy the school, and can bring in the resources to make it better.
But Hall didn't talk about the impact of those moves on students, who were racking up student-loan debt - many of them more than $100,000 - to attend the school where tuition was approaching $38,000 per year. And he didn't mention the increasingly tough job market lawyers have faced since the economic downturn, a trend that makes it difficult for many of them to repay those loans.
InfiLaw stands firm
Hall made his comments during a public hearing prior to a meeting of the state Commission on Higher Education's Academic Affairs and Licensing Committee. The full commission will decide June 5 whether to grant InfiLaw a license to operate the Charleston school. The committee voted, 3-1, against granting the license, despite commission staffers recommending it for approval.
Hall said he thinks the company meets the requirements for a license, and the company will continue to push for approval.
He also said the Charleston School of Law is both broke and broken, and its future could be bleak if InfiLaw isn't granted a license to operate it.
If the license isn't granted, "you can forget any improvements in facilities, technology, clinical programs or anything else that costs money," Hall said. The Charleston School of Law, he said, will "face extinction because it does not have positive cash flow or sufficient capital and liquidity."
But many Charleston School of Law students, alumni and faculty members, as well as members of the state's legal community and the Charleston community, oppose the sale to InfiLaw because they think the company's three other law schools have lower standards than the Charleston school. Selling to InfiLaw will decrease the value of a Charleston School of Law degree, they have said. And they recently have started calling the company "law mart."
Founders are divided
Alex Sanders, who was chairman of the law school's board until he left the school last year as the InfiLaw plan unfolded, is perhaps the most well-known of the founders. The former chief judge of the South Carolina Court of Appeals and former president of the College of Charleston is widely respected and seen as a charismatic storyteller. A character in one of Pat Conroy's novels was based on Sanders.
But Sanders refused to answer questions about how and why the law school ended up in such dire financial straits.
"I will not engage in any further discussions about the Charleston School of Law," he said. "I can but don't want to."
McCullough could not be reached for comment.
In a joint personal statement, Carr and Kosko said, "It is clear to us - as it now is to many people - that the school is in a difficult financial position. We continue to believe InfiLaw is the only entity with the interest, capacity and resources to own and operate the school the way that students, faculty and alumni deserve."
But they also refused to answer questions about why they financially depleted the school.
At the public hearing, Carr said, "I wanted to build a law school. I never wanted to run a law school."
He didn't want to lose money, he said. "But I never thought it was going to be a big business deal. I was wrong."
Westbrook said he always has been opposed to selling the school to InfiLaw, but he was outnumbered by Kosko and Carr, who pushed forward with the sale.
He questioned the value of the for-profit school model on which InfiLaw schools and the Charleston School of Law are based.
"I wasn't looking to make money, but lo and behold, success came," he said. "And along came students, and then more students and more tuition dollars. And then the profits came. And then the question of what to do with the profits."
Westbrook said he never asked for a distribution from the profits, but he never turned one down.
And, he said, he wants the school to continue to operate, and to do that similar to the way a nonprofit organization operates. He pitched that idea to the five founders before they began pushing for the InfiLaw plan, but they shot it down, he said.
He also said he thinks it's still possible to turn Charleston School of Law into a solid community-based law school.
He put up the money to launch the school, he said. If the commission doesn't grant InfiLaw a license, he will continue to back the school financially.
Hall said he thinks Westbrook "continues to sell false hope by suggesting that some combination of student enthusiasm, coupled with financial resources that do not exist, can keep this sinking ship afloat. Even Pollyanna would know better."
But John Robinson, chairman of the school's Alumni Board, said that while he was surprised to learn how much money the owners had withdrawn from the school, he's certain ownership options besides InfiLaw exist for its future. "There are other solutions that responsible parties will articulate shortly," he said.
InfiLaw representative Peter Goplerud (left), Charleston School of Law Dean Andy Abrams (center) and Robert Carr, one of the law school’s five founders (right) arrive for a meeting with students and alumni last summer at the Charleston Music Hall, after a possible sale to InfiLaw was announced.×