So there we have it, the College of Law (CoL) is to be sold to Montagu Private Equity for £200 million.
The very good news is that the funds from the groundbreaking deal will be used to set up the Legal Education Foundation - which will provide around £7m-£8m a year in scholarships and bursaries - along the lines (as revealed in the Spring edition of Lawyer2B) of the Wellcome Trust in the pharmaceutical industry.
That kind of money could be a game changer for thousands of people wishing to gain entry to the profession who would otherwise be blocked by funding issues. And could particularly help those wishing to join areas of the profession reliant on legal aid.
The not so good news comprises two words, Private and Equity. The investments of Montagu, which has assets worth £3.9bn under management, have included telecommunications, software, airfield lighting, waste management and healthcare.
However, this is its first stake in the education market and there is a fear that a private equity approach to the business could lead to larger classes, higher fees and squeezed employees.
Professor Nigel Savage, CoL’s chief executive, said it was “business as usual” at the CoL and welcomed the takeover by such a “well-resourced partner” which would enable the CoL to “access investment and expertise to take full advantage of the huge opportunities in the domestic and global legal education market”.
Legal Services Board chairman David Edmonds welcomed the deal as promoting access and enhancing competition, while Universities Minister David Willetts MP said the buyout was “an excellent outcome”.
However, commenters of the Lawyer2B message board were less congratulatory and labelled the sale “scandalous” and a “joke” while the University and College Union (UCU) called on the government to “act urgently to protect” the higher education sector from such private equity buy-outs.
UCU general secretary Sally Hunt warned: “It is no secret that private equity firms are circling UK higher education.
“The government needs to make clear commitments to protect our universities and public assets. It is of paramount importance that those assets and any investment are used to further education, not increase the wealth of shareholders.”