The Charleston Saga, Cont'd (Updated): The Law School Bubble May Have Found Its Lehman Brothers

For those of you who conveniently ignore that we had the mother of all global financial meltdowns less than ten years ago that caused a momentary downward shift in lawyer incomes amidst a long stretch of green green green, here's a history lesson for you.

In early 2008, Bear Stearns (a big banking thingy) looked like it was going under rapidly.  This was bad news for everyone, so our Lord and Savior, the Federal Reserve, swooped in and saved them from bankruptcy court in a shenanigans deal to JP Morgan.  Later in 2008, Lehman Brothers (another big banking thingy) looked like it was about to go under.  But this time, for reasons not worth going into here, the third party angel did not save our necessary institution.

Result?  Stock market crash.  Biggest panic in decades.  A recovery measured in years (and thankfully achieved, eh, law grads?)

In the law school setting, Thomas Jefferson Law School was our Bear Stearns.  A too-big, too-necessary institution that our legal academy could not risk losing.  Their lenders saved it from the brink of annihilation, and now they're poised to continue educating southern California's finest lawyers for years upon years to come.

So who's the law school industry's Lehman Brothers?

I think Charleston Law School.

The troubled law school’s two-member board cut the traditional post-commencement reception from its budget this year — despite pulling in $25 million in profit from the school between 2010 and 2013. The move has pushed student and alumni groups to take up a collection to cover the cost, said Matt Kelly, president of the Student Bar Association. 

Oh dear.  You know you know how there's various behavioral/physiological signs of pending death in an elderly person?  I have to think cutting the coffee and cookies after a major event is a huge red flag for academic death.  How the hell do they expect to keep a faculty without so much as a cheese tray, a tub full of bottled water, a bargain bin Vivaldi CD playing over the loudspeakers?

InfiLaw has apparently stepped out for now.  And just like a pair of soon-divorcing spouses arguing over which one forgot to feed the floating fish, the greedy former owners and the greedy InfiLaw folks are already arguing about who killed it:

The school’s future remains uncertain, and InfiLaw representatives have said they currently have no plans to re-apply for a license to operate in South Carolina from the state’s Commission on Higher Education.

Law school owners and InfiLaw representatives have said the school is in a financial crisis due to declining enrollment and the owners taking money out of the school. And former owner Ed Westbrook has said the management services fee the school must pay to InfiLaw also is adding to its financial burden.

Honey, it's because you withdrew money.
No, 'Flaw, it's because we have to pay you a management services fee!

By all accounts, this school's future is in peril.  If and when it becomes a Lehman Brothers, expect ripples throughout legal academia way worse than anything anyone expected.  Is South Carolina prepared for the rush of applications?  Is the southeast prepared to have a massive gap in its justice fulfillment?

More importantly, if you're a struggling law school, and InfiLaw comes knocking, take the damn deal and shut the fuck up.  The hypocritical "pride" of some alumni/students/outsiders may cause Charleston, South Carolina, to be without a law school.  It's almost like InfiLaw is going to let this school die out of spite at this point.  I mean, if I were 'Flaw, I would've at least tried to apply again wearing a fake mustache and talking with an accent.  No, I'm not InfiLaw, I'm OutfiLaw, and I just got off the boat from Galway, I did.

Potential post-closure activities already post some interesting questions; for now, InfiLaw's next move will be interesting; might I suggest a play in Atlanta or Savannah? 

UPDATE:  The Charleston Regional Business Journal is reporting that CSOL may stop enrollment.  She's now more likely to go down than the average woman a young buck lawyer dates.