The Committee on Licensing of the S.C. Commission on Higher Education wisely voted 3-1 last week to recommend to the full Commission that InfiLaw's license application to operate the Charleston School of Law (CSOL) be denied.
The three law schools that InfiLaw currently owns are ranked in the bottom 5 of the 202 accredited law schools in the U.S. in terms of student selectivity by a law professor's blog using U.S. News & World Report ranking methodology, and its oldest law school was ranked by U.S. News & World Report as the rock-bottom worst return on investment.
Two days of public hearings that the commission held on the InfiLaw license application recently revealed a plethora of other reasons for denying the license, one of which involves the current finances of the CSOL.
Until the hearing on May 19, InfiLaw and the CSOL owners had not released information on the profitability of the CSOL. On that day, InfiLaw and the two owners wishing to sell the law school over the objection of remaining owner Ed Westbrook revealed that they recently saddled the school with a $6 million debt to buy out two of the original five owners.
According to InfiLaw and those two owners, InfiLaw's deep pockets are necessary to successfully continue the law school since it lacks the financial ability itself, given the prior distributions and the debt the two owners incurred for the law school. InfiLaw has three of the only six for-profit law schools in the United States. Given its record, it is clear that the vast majority of law schools are correct in employing the non-profit model.
If the full commission denies InfiLaw a license, Westbrook will be in a position to accomplish his goal of transforming the CSOL into a nonprofit in fact or in operation. He has committed to donate his entire ownership share to the College of Charleston if it becomes the owner, advocated returning distributed profits to the school as needed, and demonstrated in many other ways his true commitment to run the CSOL in the best interests of the students and the state.
The two owners wishing to sell the CSOL to InfiLaw previously justified the sale, in part, on the basis that they needed to retire. Now that it has been revealed that they took more than $5 million each in profits, they along with InfiLaw claim that InfiLaw's deep pockets are necessary. Is a private equity fund really the best entity to assure that future profits from the law school are in large part left there for the benefit of the law school and its students or would a non-profit institution advocated by Ed Westbrook be preferable?
As to InfiLaw's claim in The Post and Courier that "the attrition rate at InfiLaw schools is substantially the same as rates at similarly situated law schools," InfiLaw made the same claim to the S.C. Commission on Higher Education, but InfiLaw added at the end of the sentence the phrase, "not ranked in the U.S. News and World Report rankings."
InfiLaw law schools have higher attrition rates than ranked law schools and much higher rates than the CSOL with the exception of last year when there was a large exodus from the CSOL after the agreement for InfiLaw to manage the CSOL was announced.
Charleston School of Law