Impending closure of Indiana Tech Law School brings anger, uncertainty

Muncie attorney Eric Welch was impressed by Indiana Tech Law School’s approach legal education, touted as giving students more hands-on experience and graduating practice-ready lawyers.

Months before the law school opened in August 2013, he pledged $20,000 to endow a scholarship for J.D. students. Now he hopes the university refunds his money.

Indiana Tech’s announcement Oct. 31 that it would close its law school June 30, 2017, brought mixed responses of surprise, disappointment and we-told-you-so. Although ending the program won’t be as easy as turning out the lights, what happens next is uncertain. This is the first time in the collective memory of the American Bar Association that a law school has closed without transferring its assets.

This uncharted territory could evolve into a messy fight. Two faculty members and 13 students are represented by Washington, D.C., attorney Christopher Mackaronis of Stone Mattheis Xenopoulos & Brew P.C.

“I’m looking into misrepresentation and fraud,” he said, explaining faculty and students gave up or turned down other jobs, relocated and joined the law school because of the university’s support. “They repeatedly received an unqualified commitment from the university that it was committed to full accreditation and (the program’s) subsequent long-term success and prosperity.”

Mackaronis wants to get internal files from the university, including their communications with the ABA. He sent a letter to Indiana Tech Law School Dean Charles Cercone instructing him not to destroy any electronic or paper documents. Mackaronis said he wants to expose what he finds to the “bright light of sunshine.”

Welch said he is “very disappointed” by the decision to close. He had wanted his scholarship to help a law student with a well-rounded body of work, extracurricular activities and classroom studies.

“I very much supported their approach to legal education,” he said.

Like Welch, the Fort Wayne law firm of Shambaugh Kast Beck & Williams LLP endowed a $25,000 scholarship at the law school. Attorney Robert Wagner said the partners intend to redirect the gift to another program or department at the university rather than seek a refund.

Wagner, an 18-year member of the Indiana Tech board of trustees, also served as a member of the university’s feasibility study committee that concluded in 2011 that the state had a need for another law school. He said the decisions to open and close were made with substantial input and thorough discussion. He said the closure is a disappointment but the board had a responsibility to the university as a whole. “A lot of things occurred that made this decision necessary.” He deferred to Indiana Tech for further comment.

Red ink

Public receptions before classes began in August 2013 showed off the impressive new law building and let faculty talk about the new program. But afterward, the law school never gained its footing. The stumbles culminated this fall when its first graduates posted a bar passage rate of 23 percent.

The board of trustees followed university president Arthur Snyder’s recommendation and voted Oct. 23 to close. Snyder noted in a press release the law school has lost almost $20 million and more expected red ink raised doubts about the program’s viability.

Snyder cancelled a phone interview with IL and did not respond to emailed questions or requests for another interview.

Cercone became aware closure was being discussed about a month before the announcement and he tried to convince the university that with more time, the law school could prosper. He was “very confident” it would be fully accredited and that bar results would improve.

“I don’t think, in the long run, the bar results were the determining factor in the board’s decision,” Cercone said. “I think it was much more ‘where is the legal market trending’ especially for quality students.”

The number of law school applicants has slid since the Great Recession and competition for applicants with high GPAs and LSAT scores is fierce. To attract students, Indiana Tech waived tuition for law students in 2015 and only reinstated it with the current 1L class but, Cercone said, many are receiving “fairly significant” discounts.

“Obviously it’s a day of sadness for me,” Cercone said after the closure was announced. “We had a ways to go, but we were proud of what we were so far trying to do. … I told the faculty they should be proud of what they did here even though it didn’t end the way we wanted it to.”

A faculty member, speaking on the condition of anonymity for fear of retaliation, was skeptical of the university’s reason for closing the law school. The teacher said, and Cercone confirmed, in the spring of 2015 Indiana Tech passed a resolution that put over $20 million in a reserve fund that would be used to support the law school operations through the 2019-2020 academic year.

In addition, there had been a sense of excitement at the law school. Applications had increased since the school gained provisional accreditation in April, more students with better credentials were enrolling, and faculty members were being published. Through all this, the professor said, the university maintained it was not concerned about the law school generating revenue, which made the closure announcement especially shocking to the professors.

“The university cares about one thing and one thing only — money,” the faculty member said. “It cares only about profit.”

Going forward

When the closure was announced, the Council of the ABA Section of the Legal Education and Admissions to the Bar posted a statement on its website about what comes next.

The section will be following Rule 34 of the Rules of Procedure for the Approval of Law Schools and expects the university and law school to do the same. The primary component of the closure process is a “teach-out plan” that should include the equitable treatment of students.

After the law school submits the plan by the end of November, the ABA will approve it or request changes. The Higher Learning Commission, which accredits the university, also has been in contact with administrators to better understand the closure and its impact on students, according to HLC spokesman Steve Kauffman.

The ABA declined to comment about Indiana Tech or the requirements of Rule 34.

As Indiana Tech Law School goes out of business, the bitterness expressed by some faculty has spread to the charter class. Fort Wayne businessman Jon Olinger graduated from the law school in 2016 and plans to take the bar next February then open his own practice.

He used the term “garbage excuse” to describe the university’s explanation that financial constraints led to decision to close. He’s most concerned for professors who uprooted their lives to move to Fort Wayne to join the new school.

University leadership, Olinger said, “need to be ashamed of themselves. … (They showed a) total lack of consideration for the lives of the staff and faculty.”•