A friend in law school to explained that this software is used for in-classroom exams and prevents any other programs from being used while a student is taking the exam, as well as saving all the work incrementally (in case the computer crashes).

It's certainly not the most secure thing to do, but they need to focus on studying law, not securing systems. I imagine that when lawyers are working on cases, they might end up using more secure devices than their old college laptops.