Which Law Schools Will Close? Follow The Money

Characteristic

Urge to merge: Difficult times for law schools have prompted several to attempt to exist acquired by other schools

July 1, 2019, 12:15 am CDT

Shutterstock

Police school enrollment has decreased significantly since the Neat Recession, as have many law schools' reputations. Fewer graduates are passing the bar, and for the by two years, less than 70% of new lawyers were hired for total-time, long-term jobs that crave bar passage after graduation—jobs that, at one point, had been the minimum expectation for newly minted JDs.

In the past three years, seven police schools announced plans to partner, souvenir or sell themselves to universities—all but begging the question: Why would anyone want them?

The answer comes down to internet tuition acquirement, which matters more academic reputation, says Ken Redd, the senior director of inquiry and policy assay at the National Association of College and University Concern Officers.

According to him, a private establishment with net tuition that grows 3% or more annually is more often than not seen equally desirable.

"It'due south about trying to make as much money as possible for healthy institutions. If there was some scandal that fabricated the news, you might see some hesitation. But if it's simply something garden variety, like ABA probation, [universities] do not care about that," Redd says.

As well, while at that place are approximately 235 police force schools, there are only 203 accredited by the ABA.

"It remains a quality brand," says Barry Currier, the ABA's managing director of accreditation and legal education. "Law schools used to be a and so-called cash moo-cow for universities. I'm non sure that was really true, but at to the lowest degree they broke even or slightly better. Now law schools are having to be subsidized by their universities, and that makes them less attractive than they might have been."

In some cases, these proposed mergers were actually bailouts designed to rescue declining schools. Not all, nonetheless, are failing schools.

Approximately two years ago, Florida Littoral School of Law, one of three for-turn a profit law schools operated by the InfiLaw System, appear that it was looking for a nonprofit partner. Around the same time, the law schoolhouse was given a "zone" rating by the U.Due south. Section of Didactics, which means that it was close to non meeting gainful employment standards, and must pass the gainful employment standard in one of the next four years to stay in expert standing.

In Feb 2019, the law schoolhouse filed an application to switch to nonprofit status with the ABA's Department of Legal Education and Admissions to the Bar. Scott DeVito, the police school's dean, says that if the plan is executed, the next step would be to become affiliated with a nonprofit academy.

Only two proposed mergers take been approved so far. A deal between Michigan State University College of Law (an contained entity) and Michigan State University remains awaiting, while the University of Illinois at Chicago's acquisition of John Marshall Law Schoolhouse, a stand-alone school, is nearing completion.

Photos past Shutterstock, Sara Wadford

A fellow InfiLaw school, Arizona Acme Law School, had tried in 2017 to affiliate itself with Bethune-Cookman University, only to denote it would shut its doors the following year. Meanwhile, Valparaiso University Law School and Whittier Law School both decided to shut later on mergers were either rejected or failed to materialize; and Western State College of Police force at Argosy Academy, currently in receivership, filed a teach-out program (which closing schools take to ensure students complete study programs) that was canonical by the ABA in May. The ABA besides approved an alternative option for Western whereby it would be acquired by an unnamed university.

20 Years After

It's not the first attempted pairing between UIC and John Marshall. The two schools announced a merger programme in 1998, and i of the main sticking points was the law school did not want to lose control of its real estate, says UIC political scientific discipline professor Dick Simpson.

Nearly two decades subsequently, the two schools revisited the matter. This time, John Marshall decided to gift itself and its downtown real estate to UIC, and in July 2018, the schools appear the bargain, with John Marshall beingness rebranded as the UIC John Marshall Police School. The transaction, which has been canonical by both schools and was greenlighted past the Department of Legal Education and Admissions to the Bar in November, is expected to exist completed in August, with the first students arriving at the newly branded school in the fall.

Adding a constabulary schoolhouse is expert for UIC's appetite to exist seen every bit a major academy, and get it out of the shadow of University of Illinois at Urbana-Champaign, which also has a police force school, says Kent Redfield, an emeritus political science professor at the University of Illinois at Springfield. It also plays well politically.

Chicago has 6 police force schools, merely UIC John Marshall volition be the only public one. It's estimated that total-fourth dimension tuition for the 2019-2020 school year will decrease from approximately $47,000 to $36,000 for in-state residents.

"You lot're talking nigh multifariousness, access and public education. That resonates in Chicago and Cook Canton," says Redfield, whose piece of work focuses on Illinois campaign finance and political ethics.

Likewise, being the city'south only public police force schoolhouse could draw more than applicants, which could atomic number 82 to increasing the law school's median LSAT score, which is 149, co-ordinate to its Standard 509 Information Report for 2018, and its median undergraduate grade-signal boilerplate, which is iii.18. Drawing from a deeper pool of applicants could also heave the schoolhouse's outcomes. In 2018, 236 John Marshall graduates sabbatum for the Illinois bar, and the pass rate was 62.29%, according to ABA data. For graduates of ABA-accredited law schools, the Illinois bar pass rate that year was 76.23%. John Marshall's ultimate bar passage rate, going back to the grade of 2016, is 89.27%. In terms of employment outcomes, for the form of 2018, 55.11% had long-term, full-time jobs that require bar passage. The national average was 68.four%.

Darby Dickerson, the law school's dean, hopes that the bargain volition help John Marshall break into U.Due south. News & World Report's summit 100 schools in the next v years.

The move could also assist boost John Marshall's bottom line. Susan Poser, a former constabulary school dean, joined UIC in 2016 as its provost and vice chancellor for academic diplomacy. The proposed deal was already in discussions, and she was tasked with examining finances with a fellow member of the law school'south board of trustees.

Co-ordinate to tax returns, John Marshall'due south 2016 tax return showed a full of $46,866,930 in revenue and $48,850,794 in expenses. The same return shows that the constabulary school'due south 2015 total revenue was $49,259,759, and its expenses were $49,748,609.

Despite that, Poser points out that John Marshall had some of import assets, most notably its four pieces of real estate, appraised at $33 million.

"I had to brand sure that we had some conviction that this transaction could be done without utilizing funds at UIC. If I had to go to the deans and tell them that I would be taking coin from their colleges to take in the police school, I knew the bargain would be dead in the water," she explains.

For the by three years, the school has had full enrollment of approximately 900 students, according to 509 reports. Dickerson anticipates the bargain will boost total enrollment at the law school—eventually landing somewhere between 1,200 and 1,300 students, including the not-JD programs.

"We would have had a bright time to come remaining contained. Would there take been challenges? Sure—there e'er are. Just we would have continued to railroad train outstanding lawyers and leaders," she says.

No Deal

Not all deals go so smoothly. In October 2018, Middle Tennessee Country Academy reached an agreement to acquire Indiana's Valparaiso Academy Law School. Under the proposal, the law school infrastructure would have been gifted to the Tennessee school, and showtime in the fall of 2019 would operate in both states, with MTSU offering reimbursement to Valparaiso for acting expenses. The Tennessee College Pedagogy Commission, in an 8-five vote, rejected the proposal the same month it was appear.

Subsequently that, the police school filed a teach-out programme with the council of the Section of Legal Pedagogy and Admissions to the Bar. It was canonical in February and calls for accreditation to run until the terminate of 2020.

Unlike the John Marshall/UIC agreement, this deal would have been more of a rescue operation. In 2016, Valpo Police received a public censure from the ABA for existence out of compliance with admissions standards. It came back into compliance in Nov 2017, but its get-go-year class only had 28 students. That same calendar month, Valparaiso University's board of directors appear that the law school would non exist admitting an entering class for the 2018-2019 school yr.

In 2018, the constabulary school had a total of 103 students, according to its 509 written report. The same year, its Indiana bar passage charge per unit was forty%, ABA information shows. For graduates of ABA-approved law schools, the Indiana bar passage rate in 2018 was 73.25%.

Tennessee has six constabulary schools, five of which are ABA-accredited, including two public police schools. It'southward a fiscally conservative country, and many of its politically connected lawyers graduated from Knoxville'south Academy of Tennessee Higher of Law, a public schoolhouse, says Michelle D. Deardorff, head of the political science department at the University of Tennessee at Chattanooga.

Junior college in Tennessee is free, and by 2020 there will be scholarships for UT undergraduates whose families earn less than $l,000 annually.

"The state wants to have a practiced investment for students, and quality was not in Valparaiso's favor. Information technology'southward not like they were trying to bring in a really strong program that was known for being attainable," Deardorff says.

George T. Lewis, a Bakery Donelson litigation partner in Memphis, is a Academy of Tennessee law school graduate who opposed MTSU taking in Valparaiso University Law School. According to him, his alma mater and the state's other public law school at the University of Memphis both take the capacity to take more law students who are qualified.

"The one reason I was a strong objector was that we didn't need it. I see actually fine students, in the top third of their class, who have problem finding jobs. And if y'all were going to bring in another law schoolhouse, why not bring in a strong police force school?" says Lewis, a sometime Tennessee Bar Clan president.

Neither MTSU nor Valparaiso Law School would comment on the matter. Before the proposal was nixed by the state's higher education commission, the Murfreesboro Mail reported that MTSU saw adding the police schoolhouse equally something that would greatly benefit its students, who wanted affordable, accredited legal education in central Tennessee.

"What happens to the working-grade kids who don't go into law school at Knoxville, and don't want to go into debt at private law schools in Nashville?" Deardorff asks. "The business concern almost accessibility in the centre of the land is a off-white i."

So is access to justice, says Kellye Testy, the executive director and president of the Constabulary School Admission Council.

"A lot of people misunderstand legal education, and call up that everyone goes to police school to get a large firm lawyer. You demand to educate people almost the difference that a law school can make in a customs," she says.

When a police school closes, Testy adds, residents lose a fair amount of community service work. And if in that location are 2 law schools in a region that compete for the same students, she says, a merger might make sense.

"Say there's some other law school xx miles abroad that's non doing and then practiced. Mine is doing OK, merely we could utilise a few more students. I can take all the administration out of that law school, and bring the students over to my constabulary school. And it would eliminate some of the competition," says Marjorie Kaufman, a managing director with Getzler Henrich & Associates. The consulting group does heart market corporate turnaround and restructuring.

Some other proposed agreement that ultimately died involved the for-profit Arizona Height Police School and Florida-based Bethune-Cookman Academy, one of the nation'due south historically black colleges and universities. Appear in 2017 equally an affiliation understanding, with plans for early on Arizona Summit admission through a Bethune-Cookman prelaw program, both the constabulary school and academy presidents said information technology would be slap-up for variety. A press release stated that xl% of Arizona's population were people of color just comprised merely 8% of the state's lawyers.

For 2017, the police schoolhouse'south offset-time bar passage rate was 26.53%, co-ordinate to ABA data. The proposal was announced in March of that year, and a few weeks after, the ABA placed Arizona Summit on probation for beingness out of compliance with various accreditation standards.

"This was a train wreck waiting to happen," says D'Andra Orey, a political science professor at Jackson State University, a Mississippi HBCU. "Some law schools prey on people of colour. I can only speak for what I've seen in the black community, but with those types of constabulary schools, I tin can encounter them preying on HBCUs in the same context."

Arizona Height was ultimately unsuccessful in existence removed from probation by the ABA, and in Nov 2018 a teach-out programme was approved with a closure date for the end of bound 2020. Bethune-Cookman has had problems every bit well. President Edison O. Jackson stepped downward and was sued by the university in January 2018, based on allegations that millions of dollars in improper payments were made with developers for a new dorm building. It was originally estimated to cost $72.1 million, only past 2018 was expected to price $306 million over 40 years, the Daytona Beach News Journal reported. The lawsuit remains ongoing.

A spokesperson for Bethune-Cookman declined an ABA Journal interview request. C. Peter Goplerud Three, Arizona Acme's acting president, also declined comment.

UNCERTAIN FUTURE

Similar Valparaiso University and Arizona Height, California's Whittier College tried and failed to observe a school that would accept on its police schoolhouse. Whittier'due south board of trustees appear in April 2017 that it would eventually close. (See "Closing Time" on ABAJournal.com.)

Rich Ruben, a retired litigation partner from Jones Twenty-four hours, chaired a commission the higher's board formed in 2015 to focus on improving police pupil outcomes. Whittier College graduates were doing well, Ruben says, but the constabulary school's first-fourth dimension pass rate for the July 2015 California bar examination was just 38%. "Selling or merging was our sole focus, after we reached the decision that we had to take some action. We reached out to everyone we could call up of and used a consultant to give us leads," he says.

Whittier Higher in January 2016 sold the Costa Mesa holding where the law schoolhouse is located. One proposal, which ultimately could not exist worked out, had the heir-apparent taking on the property and the law school, Ruben says.

The law school had a total of 128 students in 2016, according to the 509 study for that year. Its 2017 first-fourth dimension bar passage rate was 35.25%, co-ordinate to ABA information. At the fourth dimension, Orange County, where Whittier Constabulary School is located, had three other ABA-accredited police schools.

When the closure was announced in 2017, Whittier Law Schoolhouse faculty sought a Los Angeles Canton Superior Court temporary restraining society to terminate it. The motility was denied in April 2017, and the ABA later canonical a teach-out program.

Meanwhile, Florida Coastal School of Law is looking for a nonprofit partner for a merger or a modify in ownership. It is the simply InfiLaw schoolhouse that remains open up and is non operating nether a teach-out plan, and it recently filed a major change awarding with the ABA to become a nonprofit law school.

DeVito says becoming a nonprofit law schoolhouse will brand Florida Coastal more attractive to potential partners.

"What I've tried to do is identify what nosotros think is in the students' all-time interest, and the students take said that they would like the schoolhouse to exist part of a larger institution," says DeVito, whose law school in October 2017 received public notice that information technology was out of compliance with ABA accreditation standards involving program objectives, bookish advising and admissions policy. The ABA legal education section's council in June announced it was removing "specific remedial actions" imposed on the law school because it demonstrated compliance with the standards in question.

On its 509 report, Florida Coastal reported that it has a total of 207 students. For 2018, the law school'due south Florida bar passage charge per unit was 63.36%, according to ABA data. For graduates of ABA-accredited law schools, the overall 2018 pass rate for the Florida bar was 65.15%. Out of 186 members in Florida Littoral'south class of 2018, 50.54% had full-fourth dimension, long-term jobs that require bar passage.

DeVito starting time announced that he was interested in making some sort of agreement with a nonprofit academy in January 2017, and he says the idea has been discussed internally since 2015.

"We would like our partner to be somewhere in the Southeast, that's our goal," he said. "Nosotros're hoping to accept betwixt 400 to 500 students when everything settles downwardly."

Another school further along in the procedure is Michigan Country University College of Police force, which despite its name is a individual, stand up-alone schoolhouse that is working toward a merger with the land university of the same proper name. The two schools have been affiliated since 1995; however, the law school is a dissever legal entity and on its own fiscally, says Dean Lawrence Ponoroff.

Under the proposed merger, the constabulary school would no longer be private and would move completely under Michigan Land University's umbrella. The deal, which was approved past faculty and boards of trustees at both schools, isn't expected to shut before 2020, according to Ponoroff. "The difficult financial issues that law schools and legal educational activity has faced certainly plays a cistron into why nosotros are doing this now, merely information technology's not the only reason," says Ponoroff, citing interdisciplinary programs and research as well. Administrative costs for things such every bit legal counsel and auditors are also issues at a complimentary-standing law school.

The police school had a total of 710 students in 2018, compared to 784 students in 2017. Its Michigan bar passage rate for 2018 was 84.21%, according to ABA data. For graduates of ABA-approved police schools, the Michigan bar passage rate that yr was 73.91%. Out of 255 members of the class of 2018, 67.45% had full-time, long-term jobs that crave bar passage.

For the 2018 entering class, Ponoroff says that the school purposely admitted fewer students because he thinks that volition help the police school with job placements.

According to the law school's 2016 tax render, its full revenue was $38,374,887, and its full expenses were $xl,115,786. An endowment will come up with the law school if information technology merges with MSU. The law schoolhouse too owns a building in downtown Lansing that is currently for auction. Annual tuition at MSU Law is $44,000 for full-fourth dimension students. In one case information technology joins Michigan State University, which is public, Ponoroff expects police force school tuition to go down for in-state students.

If the deal doesn't go through, Ponoroff has concerns. "Non in the sense that we would shut our doors, but it would mean abandoning a lot of our strategic planning in terms of student and faculty quality," he says. "I think the bottom line is that unless things change dramatically, information technology would have been a far less interesting police force schoolhouse—and a far less bonny place to be—for students and faculty."

Three years agone Robert Zemsky, a professor at the Academy of Pennsylvania and a fellow member of the lath of trustees at Whittier College, predicted that if law school enrollment continued to decrease, 10 to fifteen schools might close. His report, "Mapping a Contracting Market," analyzed 171 law schools and found that betwixt 2011 and 2015, enrollment dropped by 21% at private law schools and 18% at public police schools.

Between 2017 and 2018, there was a 1.two% increment in constabulary students overall, according to ABA data. Yet, Zemsky says that for the most part, information technology however doesn't make much sense to acquire a law school.

"If yous've got a fairly good stand-lonely school, where the flagship doesn't have a law schoolhouse, that could be likely. Simply I don't think anybody is looking for that, considering it's a loss leader of an extraordinary nature," says Zemsky, adding that stand up-alone law schools are in the nigh danger: They don't accept a academy to blot costs.

Likewise, he doesn't see law schools that are part of universities closing or being sold off.

"Even though police force schools are expensive, they're pocket-size. So at a large public university, they tin can cover the losses for a long time. It's easier to cut costs where y'all can, concord your jiff and soldier on."