Thursday, January 04, 2007

How To Make Millions With Online Law School

One is a cop. One is a cookbook author and mother of two. And another spent the past 33 years on tour with the Rolling Stones. But every week, these three are also one homework assignment closer to becoming lawyers.

Their alma-mater-to-be is Abraham Lincoln University, a small California player trying to carve a niche in the growing business called distance education. This academic model, which makes heavy use of the Internet and doesn't require class attendance, is gaining traction among those looking to make midlife career changes or enhance workplace skills without attending school full time.

Many traditional nonprofit schools now offer some course work online, and by year's end, some 915,000 students will be enrolled in fully online programs that represent a market of $5.1 billion, according to Eduventures Inc., a Boston-based educational research firm. That's a 30% jump in students from last year.

But ALU is unusual in that it is a for-profit model offering online tutorial as well as in-person classroom instruction, making it something of a hybrid in this field. For-profit higher education institutions account for only about 5% of students at schools with a bricks-and-mortar classroom presence, according to the Sloan Consortium, an educational research group in Needham, Mass.

ALU is housed in a handful of classrooms in West Los Angeles. It has no formal library -- the leather-bound books that line the walls are mostly for show, an administrator says. There's no student center, no bookstore, no dorms, and amenities are limited to a few couches and a free cup of coffee. The average student age is 45.

The school's four-year law degree program is a part-time, one-class-at-a-time affair, and each three-hour lecture is delivered five times a week by the school's 14 full-time and part-time teachers. The lectures also are available live on the Web, and course videos and handouts are archived online. A hybrid schedule of mixing face time at school with online classes, live Internet chats with professors, and e-mail is used by 80% of ALU's students. The other 20% of ALU's students learn solely via the Internet; one student is a U.S. soldier in Kosovo.

The university's founder is 58-year-old Hyung Joo Park. His middle school was a six-mile walk from his family's rice and barley farm in rural southern Korea; a severe case of tuberculosis delayed his high-school studies. But he went on to earn an economics degree from Seoul's Sogang University, an M.B.A. on scholarship at the University of Minnesota, and later graduated from Loyola Law School in Los Angeles. By the time he was through with his studies he was married and had three kids.

After his own accomplishments, Mr. Park was deeply affected by a Korean friend's failure to finish law school because work and family didn't leave time for class. Shortly after hearing that his friend might drop out, Mr. Park saw an ad for a correspondence law school in an in-flight magazine. "What they were doing was crazy...all [through the] mail system. I thought, is there any way to do it better? Maybe they study at home, we give them a schedule, they come to our place once a week."

Mr. Park started his school in 1996 with $200,000 from savings and investments acquired during his days as an accountant and lawyer; he doesn't draw a salary at ALU and says the school is profitable with about $2 million in revenue last year. While many of his students eventually sit for the California bar, others simply want the education to enhance their existing careers. At $6,000 a year, ALU's tuition is far less than the $17,000 in-state students pay to attend UCLA's law school.

In many ways, incorporating online learning into academia is smart business because the traditional college and university market is saturated. Paul Saffo, a director at Institute for the Future, a Silicon Valley think tank, says the number of students a fixed facility can handle is limited by physical factors such as classrooms or available professors. Online classes can always accommodate more students; extra homework graders can be hired to take the burden off professors.

But because Mr. Park insists on offering as much flexibility for students as possible by having a physical location where students can attend class in person if they choose, he may miss out on some of the cost-saving advantages held by his largest competitor, Concord University Law School, owned by the Kaplan Inc. unit of the Washington Post Co., which operates totally online. Concord was founded in 1998 and now enrolls more than 1,700 students nationwide for its four-year J.D. program.

"We can't explode like a prepackaged program that doesn't offer face time," says Steven Carter, dean of admissions at ALU. "It costs us much more to expand increment by increment."

There are limitations to what an ALU degree can offer. Even though about a third of American Bar Association-accredited schools offer part-time programs, Abraham Lincoln -- like Concord -- doesn't meet ABA standards that regulate library size, classroom time and number of credits that can be satisfied with distance-learning courses. Without ABA accreditation, ALU graduates can only sit for the bar in California, a state with liberal bar eligibility standards.

About 42% of the school's graduates have passed the California bar exam so far, including first-time and repeat applicants; the overall pass rate for the state's February 2004 sitting of the general bar exam was 35%.

Mr. Park lays out an ambitious growth plan for ALU, moving over the next decade to serve 10,000 students and relocating to a new campus. He also hopes to start sending professors to San Francisco, and later to New York and cities in India, China, Korea and Japan, to meet regularly with distance students face to face.

Planet Law School II: What You Need to Know (Before You Go), But Didn't Know to Ask... and No One Else Will Tell You, Second Edition

How To Make Money With Small Online Clubs