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Struggling For-Profit Law Schools Look for a Way Out

It's not easy being a for-profit law school these days. Just take Arizona Summit, the law school that offered grads $10,000 to skip the bar exam, presumably so that the school's pass rate wouldn't tank. Or Florida Coastal School of Law, the law school that recently failed the ABA's gainful employment test. Then there's the Charlotte School of Law, which recently had to hold a food drive to support students after the Department of Ed. cut its student loan funding.

All three are owned by the InfiLaw System, which appears to be scrambling to unload all three schools, according to the ABA Journal.

Major Challenges for InfiLaw Schools

All three InfiLaw schools have struggled with student employment and bar passage rates. Only 26.5 percent of Charlotte Law School's 2015 grads were employed in jobs requiring bar passage, according to the school's ABA disclosures, despite a $194,000 cost of attendance. That low performance rate led the DOE to suspend federal student loans for the school, citing its failure to "prepare students for participation in the legal profession" and "misleading and dishonest" representations about its performance.

The situation isn't much better at Arizona Summit or Florida Coastal, either, both of which seem to be seeking out affiliations with non-profit schools. For Arizona Summit, that means partnering with Bethune-Cookman University, a historically black university in Florida. Florida Summit is reportedly looking to do the same with "select universities," according to the ABA Journal, which wonders whether the schools can be had "on the cheap." Pairing with non-profits could help the schools get around the ABA's gainful employment standard.

When For-Profit Law Schools Stop Being Profitable

Sterling Partners, InfiLaw's owners, reportedly wants to be rid of the schools quickly, in order to salvage as much of its investment as possible. But just a few years ago, the schools were rolling in dough, according to David Frakt, who was once a candidate for dean at Florida Coastal. Frakt continues:

I think Sterling Partners was making enormous profits-for a while they made money hand-over-fist. It was very obvious to me that the schools were headed to a disaster, because they were forced to admit hundreds of unqualified applicants with little to no chance of success. They knew that the profit strategy was to milk these schools as long as they possibly could, eke out a profit, and then Sterling would break it up and dump them.

Scott DeVito, Florida Coastal's dean, denies that InfiLaw is looking to get rid of the schools. The move is meant to avoid the "anti-for-profit stigma," he told the ABA Journal, and "help our students be judged on their merits, like donating over 1 million hours of pro bono legal services to our community and having one of the top-rated moot court teams in the nation, not on a caricature of for-profit education."

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