Paul L. Caron

Wednesday, November 3, 2021

Reinvestment Brings Charleston Law School Back From the Brink

Following up on my previous posts (link below):  Charleston Regional Business Journal, Reinvestment Brings Charleston School of Law Back From the Brink:

Charleston LogoDean Larry Cunningham was full of apologies after running a few minutes late to a meeting. A group of Charleston School of Law students had surprised him last-minute by dropping off a handful of handwritten thank you notes, expressing their appreciation to him for volunteering at a recent event.

The bubbly moment was a far cry from where the law school was nearly eight years earlier, on the brink of disaster and on its way to permanently shuttering. Back then, school administrators were far more likely to receive correspondence related to lawsuits than sentimental cards.

The hiccup in the school’s history began in 2013 when owners Robert Carr and George Kosko called an impromptu gathering of faculty to inform them that that the school would either have to close or be sold to InfiLaw, a Florida-based for-profit company that owned three law schools considered so-called “diploma mills,” including Charlotte School of Law.

The Charleston law school was only 10 years old at that time.

Devastated but determined students, alumni, and faculty pushed back — with two faculty members filing lawsuits — fearing that the sale would mar the school’s reputation and lower the standards of a Charleston School of Law education.

The turning point came in October 2015 when Ed Bell, a Georgetown trial lawyer, stepped in as president and bought into the school, alongside Carr and Kosko, to save it from the sale to InFiLaw. Bell’s agreed to manage the school, while Carr and Kosko serve as members of the board, until the school goes nonprofit and the former owners are bought out.

Since then, InfiLaw has gone out of business and all of its law schools are now closed, while Charleston School of Law years has clawed its way back from that brink of dissolution to record enrollments this fall.

“We predicted we would get here, but we didn’t predict we’d get here this quickly,” Bell said. “We came from a law school that was getting ready to go under to now a nationally ranked law school in six years, so that’s pretty good.”

Under Bell’s leadership, the school has transformed from a Washington Post headline reading “Charleston School of Law to close?” to increased job placement numbers, the highest South Carolina bar pass-rate in the school’s history at 87% and a student-centric model that invests money back into the education, rather than the pockets of its leaders, Bell said.

This fall, 611 students enrolled in the school, with 1,515 first-year applicants from 35 states — the largest matriculation to date. And job placements are just as strong with firms all over the metro Charleston area, and some as far as Ohio, seeking out CSOL students. One local firm currently employs 11 graduates from the law school. ...

Bell earns a salary of $1 and said he hasn’t taken a penny out of the school since he began in 2015. Comparatively, between 2010 and 2013, Carr, Kosko and the school’s three other co-founders — who have since left the institution — withdrew $25 million in profits from the school.

Bell, on the other hand, has put money into the school, settling a $6 million debt to InfiLaw. At the time of his arrival, the balance was $5 million, and Bell paid off the loan in 2017. He also settled two lawsuits recruited more faculty and updated the facilities to meet American Bar Association standards.

On his first day, Bell set a new tone by rehiring four teachers who had been let go during the distress, most of whom are still there today.

The school has had some lean years, but Bell and Cunningham are committed to Bell’s goal of nonprofit status. The conversion process should typically have only taken three years, but the road is complicated because the school must first generate the resources for the conversion, develop a reliable plan for the ABA, receive the ABA’s acquiescence to change in structure, and then receive approvals from the Department of Education, Internal Revenue Service and the South Carolina Commission on Higher Education.

Before the school reaches that status, Carr and Kosko will be bought out.

Prior TaxProf Blog coverage:

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