The Basics of Creating Schools (CWH)

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Before creating a school, following are a few general guidelines to keep in mind.
New schools should be unique. A new magic school should not overlap any of the existing schools. Since the eight major schools cover a lot of ground and there are already hundreds of spells in the AD&D® game, this is not as easy as it sounds. Not only should the DM avoid new magic schools whose spells duplicate the effects of existing spells, he should also avoid trespassing on the priest's territory. For instance, a school of magic focusing on healing spells isn't a good idea, since it conflicts with one of the priest's special areas.
A new school shouldn't be too powerful. The existence of a school whose spells can destroy dragons, level cities, and render the caster invulnerable makes it extremely difficult for the DM to maintain play balance. It's next to impossible for the DM to invent suitable challenges for wizards wielding that much power, ultimately making the game boring for all. The school of necromancy is about as powerful as any school should be.
A new school shouldn't be too weak. On the other hand, players won't be interested in a school that doesn't offer them a measure of power comparable to what's available in the existing schools. The school of greater divination is about as weak as any school should be.
A new school must be described precisely. Magical effects are difficult enough to adjudicate when their definitions are detailed and specific. When they're indefinite and ambiguous, it's nearly impossible to make consistent rulings and avoid frustrating players