Concerned faculty: Bad decisions leave law school in lurch

Thousands of law books line the shelves inside the law library at the Charleston School of Law Monday August 18, 2014. (Grace Beahm/File)

When five South Carolinians opened the Charleston School of Law in 2004 as an “elegant” local law school, it was greeted enthusiastically by the Charleston community. Having acquired the rights to Charleston’s historic “Forensic Club,” the school laid claim to a lineage dating back to the early 1800s. It was originally intended to be, the community was assured, a nonprofit, and was founded as a for-profit solely out of political necessity. The owners gave the school a telling motto that made this point clearly: Pro Bono Populi — for the good of the people.

In the years that followed, the Charleston School of Law flourished beyond all expectations. It graduated more than 1,500 law students, who now practice nationwide. It was already outpacing 81 other law schools by 2013 in one ranking of graduates employed full-time in long-term, bar-passage-required jobs.

It just recently surpassed its distinguished neighbor in Columbia, becoming the state’s top law school in bar passage for the February 2015 bar exam. It evoked a spirited alumni passion, donated hundreds of thousands of hours of free legal services, and hosted in Charleston all manner of legal luminaries including two U.S. Supreme Court justices, U.S. senators and renowned legal scholars.

By any measure, the school was trending towards national distinction.

What happened?

InfiLaw arrived. What follows is the perspective of faculty of the law school. We are teachers, committed to the special “student-first” culture that has come to define the Charleston School of Law. (Don’t take our word for that; ask any law student for an opinion.) Questioning this sale is certainly not in any faculty member’s best personal interest. As one Charlestonian quipped, we sure aren’t earning any “gold stars” from the InfiLaw folks. But this cause has been too important for us to stand aside.

InfiLaw is a Florida-based company which runs three for-profit law schools in Florida, North Carolina and Arizona. In July 2013, the owners of the school, in a divided vote, announced that they had quietly signed a “management services” agreement with InfiLaw. When pressed about what this meant, whether it was a prelude to a sale to InfiLaw, the majority owners demurred.

Curious. If this was all such a welcome development, why the cloak-and-dagger treatment? The community would learn some answers in the months to come.

We learned that InfiLaw had endured some harsh publicity, including sharp critiques in The Atlantic magazine (“The Law-School Scam,” Sept. 2014) and the North Carolina State Bar Journal (“InfiLaw and Student Debt,” Spring 2015). Each of the three InfiLaw schools was substantially larger than the Charleston law school (averaging, even today, more than 1,000 students per school).

Each was more expensive than the law school in Charleston. Each was ranked among the bottom five of all 202 ABA-accredited law schools in the nation in one 2014 study of student selectivity. In the July 2014 bar examination (the test for graduates to become licensed practitioners), InfiLaw’s Florida school ranked 10th out of 11 Florida law schools, its North Carolina school ranked 7th out of 7 North Carolina law schools, and its Arizona school ranked 3rd out of 3 Arizona law schools. There seemed good cause for current students, alumni, faculty, and the Charleston community to be worried about this suitor.

Opposition to InfiLaw caught fire quickly. Current students opposed it, fearing a compromise of the quality of their education. Alumni opposed it, believing it would diminish the reputational value of the school they helped build. Mayor Riley wrote to oppose it, as did the chairman of the law school’s board of advisors.

Members of the state Legislature wrote to support a non-InfiLaw option, as did the Charleston County Legislative Delegation by substantial majority vote. The array of opponents grew formidable.

Originally, the faculty, though concerned, publicly reserved judgment on the InfiLaw question and counseled others to do the same until all the facts were known.

But information-sharing did not go well. Requests for concrete answers to concrete questions were sidestepped. Growing uncertainties about the future of the school’s modest size, its student recruitment practices, and the integrity of education left faculty ever more worried. This past March, at the request of the majority owners, the faculty provided InfiLaw with a simple list of simple questions about the school, its operational future, and its teaching staff.

A quick response was promised. Then delayed. Then InfiLaw announced that it would make no response at all.

Then, last week, the majority owners announced that they might close the school altogether.

So, what caused this mess? No spin — here is our understanding:

First, in the years immediately preceding the sale to InfiLaw, the owners distributed to themselves as profits $25 million in student-paid (often federally-guaranteed) tuition dollars. Those distributions depleted a multi-million dollar “rainy-day” fund, which the owners had assured the American Bar Association would remain in place to shelter the school against economic downturns. This profit-taking weakened the once financially vibrant law school.

Second, two of the five owners voted to buy out two of the others, thereby obtaining the votes needed to ink the InfiLaw deal. This buyout was accomplished through an InfiLaw loan, with the resulting millions in new debt strapping the school still further.

Third, the remaining owners (by a 2-1 vote) hired InfiLaw as a “consultant,” at a numbing price tag that roughly equaled what 16 law students pay yearly in tuition.

Fourth, these various decisions triggered a regulatory event which required the posting of heavy, new financial bonds.

Fifth, uncomfortable with the prospect of an InfiLaw acquisition, some current students transferred away and some incoming students changed their minds, with consequential revenue impacts.

Sixth, opportunities to pursue a non-InfiLaw future for the school (which, concededly, would have paid the owners less than InfiLaw’s deal promised to do) were not succeeding.

Seventh, the majority owners failed to return any of their profit-taking to the school as its financial needs grew. Only the minority owner, Ed Westbrook, volunteered to return money, and he even pledged to donate his full ownership share to a nonprofit.

Just last week, the ownership majority claimed it “didn’t need to be this way.” As this recounting shows, they are exactly right.

That majority also claimed that everything they have done has been to benefit students. That seems exactly wrong, given the costly price tag they placed on a Charleston School of Law education (while pulling out millions of dollars in profits) and the instability the InfiLaw sale has wrought. This past weekend, those owners refused to fund a piddling soft-drink-and-cookie reception for our new graduates, or to bestow on any of them our school’s highest honor, a (cost-free) “Forensic Club” membership.

The majority owners now claim that the blame here lies not with their own profit-taking or refusals to recapitalize the school, or their saddling of the school with new sale-related debt, or their inflexible pursuit of an InfiLaw deal in the face of widespread opposition.

Instead, those two owners insist that the blame lies with the faculty who should have just kept quiet. They say that the burden is on you, faculty, to get the InfiLaw deal closed.

That, too, is just plain wrong. The owners and InfiLaw have had nearly two years to get this deal closed. Their problem isn’t the faculty. Their problem is that they can’t sell the deal to South Carolina. The state’s Commission on Higher Education’s subcommittee voted against the deal last spring, and the American Bar Association rebuffed an end-run strategy to obtain their acquiescence last winter. If the merits were compelling, the faculty’s concerns wouldn’t matter a lick.

Unlike the owners — who reportedly were to receive millions more if the InfiLaw sale closed — the faculty’s position is not driven by self-interest (indeed, self-interest would favor a running leap aboard the InfiLaw bandwagon).

The faculty’s worries about law students under an InfiLaw model have never been dispelled, notwithstanding countless opportunities and almost two years. The record is plain — neither the South Carolina Commission on Higher Education nor the American Bar Association has yet been persuaded to approve this sale.

It is true that the faculty’s resistance to InfiLaw has not served the owners’ interest in pulling out still more profits. But it is, we believe, in the best interests of the young men and women of the state of South Carolina — and that is pro bono populi.

Seventeen Charleston School of Law professors — almost three fourths of the faculty — signed this column: Constance Anastopoulo, R. Randall Bridwell, Todd Bruno, Amanda Compton, Kevin Eberle, Gerald Finkel, Allyson Haynes Stuart, William Janssen, Jonathan Marcantel, Richard Mendales, William Merkel, Jorge Roig, Miller Shealy, Virginia Meeks Shuman, William Want, Aleatra Williams and Nancy Zisk.