The University of Law has been sold to a 36-year-old entrepreneur who also owns the London School of Business & Finance.
Self-made millionaire Aaron Etingen's purchase may herald a seachange in legal education which will benefit students. Although lecturers at one of Etingen's other colleges have complained of chaotic organisation and a lack of basic teaching resources.
Three years ago the management of the College of Law was allowed to abandon its charitable status and flog the place off to private equity house Montagu for £200 million. Under Montagu's tenure, despite being awarded University status, Ulaw struggled in the law market with the loss of several major clients. Allen & Overy ditched it in favour of BPP in 2013 and, as revealed exclusively by RollOnFriday, fellow Magic Circle firm Clifford Chance did the same in 2014. In 2013 the Open University also ended its partnership with ULaw, a contract worth a rumoured £3 million a year.
On the plus side for the private equity house, it clawed back a bit of profit with some serious asset stripping, as RollOnFriday predicted. In 2014 it sold the valuable Bloomsbury campus in a 12 year sale and leaseback deal to funds group Schroders, netting Montagu £68m (and probably signalling the end of the campus' life: Shroders immediately made noises about how, when the lease ends, it can take advantage of the change of use provisions which, as Montagu's sale particulars specified, mean the site can be turned into a luxury hotel). And with that windfall Montagu is getting out. It clearly wasn't ever interested in education, just in turning a quick buck. The protestations it made over the last three years now look pretty hollow.
So who is the new owner? Global University Systems, which bought ULaw for an undisclosed sum, is led by its founder and executive chairman, mega-rich entrepreneur Aaron (born Arkady) Etingen. Unlike Montagu, Etingen is actually interested in education - GUS owns several higher education businesses, including the London School of Business and Finance, Britains's largest private college.
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No-one liked Phil and Kirsty's replacements |
What actually interests Etingen about education is a thornier question. GUS has a...spotty record. Last year lecturers working in the London College of Contemporary Arts division of LSBF rebelled over a 20% pay cut and complained that the LCCA suffered from "chaotic timetabling, invoice payments, room allocation, poor levels of educational resources, inadequate student intake assessments and class sizes" in a letter leaked to the media. Teachers said that they were so under-resourced they had to carry a whiteboard from room to room. The unhappy lecturers also accused GUS of a failure to deal with "aggressive students", which was tolerated because "they bring in money". LSBF denied the allegations.
In February another GUS college, St Patricks, was suspended from the student loans system after questions were raised about the explosive growth in the number of its publically-funded students. The subsequent pressure on the college led to St Patricks apologising to students for "not sufficient resources" and overcrowding. It was readmitted in May and told to address quality concerns which included dropout rates of over 30%.
But while 36-year-old Etingen (who started his empire from a London attic and whose heros are Steve Jobs and Walt Disney) may have a pile 'em high model, he could - potentially - transform the legal education sector. Not afraid of innovation, he previously launched an online MBA which students only had to pay for at the point at which they chose to sit the exam. If he takes that approach with the LPC, allowing students to study from home and to cut out the expensive gamble which the course is for those who have not lined up training contracts, he could put everyone else out of business. At the very least, he should give ULaw, which was recently reduced to handing out leaflets in Leeds city centre, a shot in the arm. Even if it's just by making David Blunkett its chairman (which is happening) and stacking the place with fighty students (tbc).
Commenting on the deal, Etingen said, “The acquisition of the University of Law adds an asset of unique strategic value to GUS. Having ULaw ultimately provide a proven governance and quality framework for GUS’ UK interests is a major benefit to us and will further enhance the impact of our work with students and employers alike”.
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Etingen seems like a right one. I don't doubt that he will do everything to increase profits. If you are a graduate reading this, do not start the LPC without a training contract. Just don't. Ask the college you are thinking of applying to how many people start the course without a TC and then have a TC by the end of it. Ask to speak to someone on the course and ask how many in the class have a TC. When I speak to people it is normally one or two out of the entire class. Just don't do it.
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When the CoL lost its charitable status (and its never truly been explained why this was necessary although management greed is a good bet) profit became king. After Montagu has left, what exactly does the new Uni have as assets apart from rapidly decreasing leases, more managers than the NHS and a board earning six figure salaries who couldn't fight their way out of a paper bag.
I retire next year (God willing) and would recommend students to train in accountancy as within the next 15 years, accountants will have the rights to do what solicitors do today. As for those who work for the Uni, I suspect things will begin to change in the next 6-12 months. Good luck!
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How and why was it awarded university status?
Why haven't legitimate universities come together to incorporate Legal Practice into the syllabus alongside the 'qualifying law degree' subjects or instead of EU? or as an elective for those not interesting in practicing or even at worse as a fourth year add on?
Things need to change.
Won't happen as long as these bloodsuckers are making shed loads though will it.
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