I know that there are rumors and frustrations concerning the future of the Charleston School of Law. I, too, am very concerned and believe that it is in the best interests of the community and South Carolina Bar that, with or without InfiLaw, the school continues to survive. The CSOL was already in a fragile position when we signed the agreement almost two years ago to acquire it. Like most law schools, it was facing the challenging prospects of falling enrollment as legal employment and, as a result, law school applications were declining rapidly, just as they were throughout the nation.
Moreover, since 2010, the owners have taken $25 million in distributions, depriving the school of capital to withstand a downturn in the economy. Unlike schools affiliated with a university system, the Law School has no source of financial support other than tuition.
Yet we saw the promise of the Law School within the Charleston legal market and the community at large. We believed that the investments we would make in clinics, in moot court programs and in providing a practice-oriented education could make it a successful law school and its graduates even more attractive to the bar. We wanted to assist the school in contributing in more ways to the Charleston community through expanded pro bono programs and externships. We also believed we could help enhance the diversity of the South Carolina Bar, which is underrepresented by lawyers of color, through support of committed and focused recruitment of students of color as occurs at our three schools.
Unfortunately, our efforts to acquire the Law School ran into opposition based on arguments that we believed were either without basis in fact or clouded by bias against a business model that ironically is the same as that of the CSOL. A subcommittee of the Commission on Higher Education went against recommendations of its own staff and recommended denial of our application to transfer the license to operate to InfiLaw. While community attention was diverted by a variety of somewhat vague, alternative proposals, no serious or credible offer to acquire the Law School ever materialized, even though we allowed the school to consider such an offer by waiving our binding purchase agreement. And all the while, the situation at the CSOL has continued to deteriorate:
Enrollment is down 35 percent since 2011, costing the school millions of dollars in revenue.
Unlike other law schools, costs have not been correspondingly reduced to take into account the fact that there are substantially fewer students to teach or service, steps that many other law schools have taken in response to enrollment decline.
Ironically, the South Carolina Commission on Higher Education, whose subcommittee had rejected the transfer of the license to InfiLaw, notified the school in January 2015 that it was not in compliance with the financial requirement that it post a surety bond or letter of credit equal to 10 percent of the previous year’s tuition, despite being given repeated extensions of time to come into compliance. This requirement has only recently been satisfied.
The CSOL currently has significant outstanding debts.
When we signed the agreement to purchase the CSOL, we loaned it a significant sum of money at its request. Since that time, we have voluntarily forborn our right to require the school to make timely payment of principal and interest on the loan so that the school would be able to make other payments, including payroll. Similarly, we have continued to provide services under the Consulting Services Agreement, without payment of fees or associated expenses.
There appear to be some in the Law School community who would rather see the school close than make the necessary changes to enable it to succeed in today’s challenging climate. Others may be resistant to change because they see InfiLaw as a deep pocket that will rescue the school under any circumstance. Any objective observer would recognize that we have been patient, but such patience is at its end as the school’s financial and operational situation deteriorates.
Economic studies show that the Law School contributes over $40 million to the Charleston community. There is also the prestige that this community benefits from having a law school, as well as from the public service that a law school provides to a community. We know that firsthand from the law schools in other communities that have InfiLaw schools.
The alumni and school community need time to assess how much they value the CSOL, whether they still want a law school, and if so, in what manner they will come together to preserve it. If there is a financially viable plan for community support of the Law School, InfiLaw is willing and ready to listen, but under the current economic circumstances, we see very little chance for the school’s ongoing success as an independent entity in the future.
None of us at InfiLaw is happy with the situation today. It is certainly not what we envisioned two years ago. My heart goes out to the students and alumni of the school and to the citizens of Charleston, who appear to be about to lose a wonderful civic resource.
C. Peter Goplerud is president of InfiLaw Management Solutions. He previously served as dean at four law schools, including Florida Coastal School of Law, Drake University Law School, University of Oklahoma College of Law and Southern Illinois University School of Law.