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Charleston Law starts transition to nonprofit status 

By: South Carolina Lawyers Weekly staff//November 17, 2023//

Charleston Law starts transition to nonprofit status 

By: South Carolina Lawyers Weekly staff//November 17, 2023//

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Charleston School of Law has made its case to shift from a privately owned for-profit institution to a nonprofit one. 

The decision is in the hands of the American Bar Association and soon will be before the South Carolina Commission on Higher Education, Larry Cunningham, the school’s dean and one of its professors, said. 

“The official step was on Oct. 13, when we took the first step with our accreditor, when we took the step of filing for acquiescence with the American Bar Association,” he said. 

The application caps a long, intense period of preparation for the change and an even longer period than those associated with Charleston Law have wanted it to happen. Cunningham and the staff submitted a detailed plan to the ABA, complete down to the legal documents that the school will need to file if the legal organization gives its approval. 

Cunningham said the shift had been long sought even before he arrived at Charleston Law about 3½ years ago. One of the school’s co-owners, J. Edward Bell III, wanted the change made when took his stake in the school in 2015.  

Bell co-owns the school with Robert S. Carr and George C. Kosko, two of its five founders. 

“They’re the board and the owners of the school. They agreed to make the move,” Cunningham said. 

They are not alone. 

 “Everyone here is supportive of the move to nonprofit status,” he said. “This is something that we’ve been discussing internally. The faculty are supportive. The staff are supportive. The students are supportive. … 

“This is something that we’ve had as an institutional goal for some time.” 

If approved, ownership will be transferred to the Charleston School of Law Foundation Inc., a 501(c)(3) nonprofit group. The foundation supports the study of law in the city, the mission of the law school, and its students through programs such as scholarships, its website says. 

Hal E. Cobb, the foundation’s board chairman, did not immediately return phone messages seeking comment Tuesday. He is a 2012 graduate of Charleston Law. 

Next steps 

The school now waits for the decision by the ABA, which does not set a timeline for the acquiescence process. 

The application will be considered by the council of its Section of Legal Education and Admissions to the Bar. The council next meets Nov. 16-18. 

“The process takes time,” Bill Choyke, a senior media relations strategist for the ABA said by email. “I have no knowledge if it is [on] the agenda, but these matters are confidential until public notice of a decision.” 

Law schools at the University of New Hampshire and Ohio Northern University also submitted applications for changes in October, the ABA’s website says. An application by Elon University School of Law in Greensboro, North Carolina, to open a branch campus in Charlotte, North Carolina, was submitted in July. All await decisions by the ABA. 

Cunningham accepts the need for patience. 

“We have to be really respectful of the ABA and its process,” he said. “They treat these matters seriously, and they will undertake a full review. … They will take as much time as they need to make a sound decision.” 

In the meantime, Charleston Law has reached out to the Commission on Higher Education to see what information it will want on the transition. However, the agency could wait for the ABA’s decision before moving ahead. 

The shift also will involve working with the Internal Revenue Service and the U.S. Department of Education, the former on tax matters — Charleston Law now pays taxes since it is a for-profit entity — and the latter on federal student aid programs. 

Once the approvals are received, the transition’s pace would pick up. 

“A lot of the legwork has already been done,” Cunningham said. “It would be a matter of finalizing it and executing the documents” submitted to the ABA. 

Key reasons for change 

Initially approved by the commission in 2003 and opened in August 2004, Charleston Law has been an uncommon fixture — a for-profit school — in the legal community. The number has gone from six schools with more than 5,000 students a decade ago to just two now, the Reuters news service reported Monday, Oct. 23. In addition to Charleston Law, the other for-profit school is Western State College of Law at Westcliff University in Irvine, California, Cunningham said. 

He cited two key reasons to shed for-profit status. 

“The top reasons are, first, the ability to fundraise directly is something that a 501(c)(3) nonprofit can do much more easily because donors can receive a tax benefit for their contribution,” he said. 

That could bring in more money for scholarships, faculty positions, and investments in the facility. 

“The second reason is reputational. There are very few for-profit law schools now,” he said. “We are the only independent law school that is for-profit.” 

Cunningham has overseen much of the transition process. He wryly joked about the load he had been bearing as he described the effort. 

“Now that Oct. 13 is behind me, I have a little break to focus on my day job,” he said. “A lot of time went into this. It’s complex from a legal perspective. It’s complex from a regulatory standpoint. … 

“It’s not like flipping a switch.”

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