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Editor: Paul L. Caron
Pepperdine University School of Law

Thursday, January 26, 2017

The Law School That Crumbled: Triumph Or Tragedy?

Charlotte Logo (2016)The Atlantic, The For-Profit Law School That Crumbled:

The Charlotte School of Law may not be able to outrun the latest—and most damning—chapter of its at-times-scandalous existence. For years, the for-profit school was targeted by critics for its increasingly negative student outcomes: median LSAT scores in the low 140s, state bar-passage rates that hovered around 45 percent, high student indebtedness, and lackluster employment figures. In 2014, a routine re-accreditation site visit by officials from the American Bar Association led to closer scrutiny of the school’s admissions and teaching practices. That same year, it appears the school began offering $11,200 grants to students who delayed taking the bar. During October of last year, the school was placed on probation by the American Bar Association.

Then came the most damaging news: in mid-December, the Department of Education denied the law school’s application for recertification under Title IV of the Higher Education Act. This decision prevented Charlotte’s students from receiving federal loan money—an unprecedented decision for a law school that remains accredited, for-profit or otherwise. Now without a significant source of revenue, the school saw no choice but to fire up to two-thirds of its faculty and close several of its legal-aid clinics.

For many years, experts had predicted the demise of underperforming law schools. ... These concerns have become particularly evident at the three for-profit schools that comprise the InfiLaw System, a consortium owned by the private-equity firm Sterling Partners: Charlotte, Florida Coastal School of Law, and Arizona Summit Law School. The University of Colorado law professor Paul Campos explored how desperate the situation had become in 2014, authoring a story for The Atlantic in which he argued that for-profit legal education was scamming potential students and would likely “[leave] federal taxpayers … stuck with the tab, even as the schools themselves continue to reap enormous profits.” Now, it appears that those predictions are quickly becoming reality, as students and faculty at Charlotte struggle to run a for-profit law school without access to federal loans.

Campos’s critique had been inspired by an unorthodox presentation given in April 2014 at Florida Coastal School of Law by David Frakt, a finalist for that school’s deanship. Frakt used his allotted time to focus on “sharply declining enrollment, drastically reduced admissions standards, and low morale among employees” at the InfiLaw campus. Frakt was told to leave the campus before he could finish his PowerPoint slides, but his straight talk was applauded by the growing community of “scambloggers”—disenchanted journalists, academics, and graduates dedicated to exposing the many deceptions employed by law-school administrators to pad their employment and admissions numbers. These individuals often argue for nothing short of shock therapy, shutting down as many underperforming law schools as possible.

If Charlotte School of Law ceases operations, their wish may soon be granted. Many underprepared students will not receive their degrees or sit for the bar, incompetent law-school administrators will eventually lose their jobs, the legal market will be spared a further glut of heavily indebted job-seekers willing to drive wages even lower, and Charlotte will return to its dubious status as America’s largest city without an accredited law school. At least in this instance, goes the scamblogger argument, the free market would have its way.  

Brian Clarke, an assistant business-law professor at Western Carolina University who taught at Charlotte from 2011 until 2016, has a different view of the situation. “I’m sure the people who predicted this, Paul Campos and the scambloggers, will be overjoyed,” he told me in a phone conversation. “But this is a tragic development, not a positive one.” ... Clarke stressed that Charlotte’s focus on practical skills over instruction in bar exam subjects proved problematic in a state that tests students across 16 subject areas. “Many of our students weren’t very good writers when they arrived, and by the time they graduated, they weren’t all that much better equipped to answer the essay questions on the bar exam.” ...

Lewis Wasserman, an attorney and education researcher, was surprised by the Department of Education’s decision to terminate Charlotte’s eligibility for federal funding. ... “What you learn as you do this kind of work is that these regulating agencies have rather cozy relationships with one another, and most of their punishments are toothless exercises in semantics: schools are placed ‘under review,’ ‘under supervision,’ ‘on probation,’ and so forth, but these are mainly publicity measures, things to tell the newspapers. Truly punitive measures are typically a last resort.” ...

Wasserman has studied trends in higher education for the past four decades and believes accessible forms of legal education for lower-performing students will persist—as will ugly incidents like the situation in Charlotte. “I think we’ll see the development of hybrid law schools, partially online and partially in classrooms, that will keep costs contained while delivering the essential aspects of a law-school education,” he said. “Law schools will merge with other law schools, larger universities may acquire failing nonprofit law schools owned by smaller universities, and for-profit legal education, which is inherently problematic because of the obligations to maximize profits for shareholders, will eventually disappear from the scene—though that part of the process won’t be pretty.” ...

For how much longer could thousands of fresh-faced new lawyers, so laden with debt and despair, continue to enter a shrinking market? Time is the most valuable quantity we have, and some students at Charlotte School of Law had invested two years of their lives in a system that’s poised to fail them.

“It’s such a terrible shame,” Clarke said, repeatedly, throughout our conversation. “I keep thinking it could have been different. Yet with everything that’s been happening to the legal profession in this country—all these negative developments—how could it?”

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2017/01/the-for-profit-law-school-that-crumbled.html

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