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This clinic means business

This article originally appeared in the Summer 2013 issue of the Northeastern Law Magazine.

Andy Brooks was trying to save the planet while doing something he enjoyed when he launched a composting business out of his backyard in Jamaica Plain two years ago. Pedaling door-to-door on his bicycle, Brooks would pick up buckets of food scraps from his customers, take them to local farms to be composted, and return most of the compost to his clientele for use in their gardens. He charged his environmentally conscious customers $8 a week and donated most of the leftover compost to community gardens and schools.

To his surprise, within a few short months his idea grew so popular that he had more than 100 customers throughout the Greater Boston area, with more joining each day. Things really exploded after a young marketing whiz, Igor Kharitonenkov, made a video about the innovative company, and Brooks asked Kharitonenkov to join him as a business partner. At that point, the pair realized it was time to treat Bootstrap Compost as a real company, which meant they needed written contracts with customers. But they worried about losing the grassroots feel of Bootstrap by presenting customers with long pages of legal jargon drafted by teams of expensive lawyers in business suits. That’s where the law school’s new Community Business Clinic—which provides free legal services to startups, entrepreneurs, and small businesses, especially those in economically disadvantaged neighborhoods—proved the perfect match.

Long spent hours talking with the partners about the company. “It was much more challenging than I anticipated initially,” she says, with a laugh, “but it was so much more rewarding at the end when they got the contract and said, ‘Yeah, that’s how we want to present ourselves!’”

“One of the provisions of the residential contract is that the company will not be responsible for what people do with their compost. So the contract says, ‘Don’t wear your compost as a hat!’” Kharitonenkov notes. “We don’t want the contract to scare anyone away. It’s short, to-the-point and has our language and culture written within it.”

The experience was such a success that Bootstrap Compost returned to the clinic this spring for assistance with drafting a shareholders’ agreement to provide for the company’s future under various scenarios, such as the death of one of the partners. Kharitonenkov describes it as a “very intense experience” made much more pleasant by their next student lawyer, Paul Gehrke ’13. “Paul was super motivated,” including urging them to meet the deadlines he’d set for them, Kharitonenkov says. “It was a really great process, and definitely pushed us as a company in a way we hadn’t been pushed yet.”

And relying on the clinic saved Bootstrap a small fortune. “You don’t have the money for lots of legal fees. You could go to legalzoom.com [which provides web-based legal services for businesses], but in my opinion it’s much better to work with a real individual,” says Kharitonenkov. “And there’s a benefit to the student, too. Paul wants to go into business and corporate law, so giving him that experience is great.”

Gehrke, who hopes to eventually become an in-house counsel, agrees. “The community has a real need for attorneys in a business context, especially lawyers helping underserved people, and the law school has the need to give students the experience of working with businesses,” he says. “The fact that the clinic is able to meet both those needs in the same program is great.”

Instant Hit
Just wrapping up its first year, the Community Business Clinic is an outgrowth of the work of Professor Jim Rowan in the Poverty Law and Practice Clinic, which represents community-based organizations that assist low-income people, as well as the scholarly work of Professor Rashmi Dyal-Chand ’94 in the areas of poverty law and economic development. While it’s widely believed that small businesses are a backbone of the American economy, there is very little information about whether such businesses, when started by low-income individuals, are a reliable means of either alleviating poverty or of increasing economic development. It’s also not clear what factors lead to successful business development below the poverty line. Two years ago, Rowan and Dyal-Chand set out to study these questions as well as to think about launching a related clinic.

A small, pilot clinical program was tested at Northeastern in the summer and fall of 2010. Then, Dyal-Chand and Rowan landed a $500,000 grant from the U.S. Department of Commerce to fund a longitudinal study, which they are conducting, as well as to develop a center to provide free legal services to low-income and other underserved entrepreneurs. Through the efforts of Jay Gruber ’85, a senior attorney with AT&T, the clinic also received a generous grant from his company that covers the cost of hiring a fellow.

Last year, the law school hired Peter Sessa, a practitioner with 35 years of deep transactional and social justice experience, as director of the clinic. Sessa’s career path has included housing and family law at Cape Cod Legal Services, starting a domestic violence shelter in Appalachia, and advocating for grassroots and community organizations. While Northeastern has long been considered a national leader in clinical legal education, the school’s clinics have primarily focused on litigation; the Community Business Clinic is the school’s first transactional clinic. When it launched formally in spring 2012, Sessa reports it was an instant hit with students. Waiting lists have already begun to form since the clinic accepts only seven third-year students each quarter. In its first quarter, 17 students applied; by this winter, as word spread about the interesting work students take on, there were 34 applicants.

“The level of interest is through the roof, and who can blame them?” says Dyal-Chand, because working with entrepreneurs is about “building something rather than tearing it apart and figuring out who should win.”

With guidance from the Metropolitan Area Planning Council in Boston and referrals from other community partners, the clinic is attracting a growing roster of clients, including Haley House, which employs homeless individuals and formerly incarcerated people in a café, and St. Francis House, which assists the homeless.

Possibilities, Not Roadblocks
Under Sessa’s supervision, students tackle a wide range of business-related legal challenges, from overcoming regulatory barriers to negotiating and drafting contracts and leases to applying for licenses, drafting loan documents and more. CBC students meet twice a week for classes addressing drafting contracts, entity formation, client interviewing and other essential transactional skills. Much of the work focuses on helping enterprises choose the appropriate business entity—corporations, cooperatives, partnerships, sole proprietorships and so forth—for their needs.

Sessa’s friend Roger Marino, founder of EMC Corporation and a Northeastern University graduate, has spoken to CBC students about what entrepreneurs want from their lawyers. Lawyers tend to be risk-averse, which is often the wrong approach for entrepreneurial clients, according to Sessa. “Too many times, when people go to a lawyer all they hear is, ‘no.’ I want them to look for possibilities, not roadblocks,” he says.

While students handle client interviews on their own, the class typically role-plays how these meetings should be handled, and Sessa provides feedback to students who also report on how the client interactions turn out. He also holds weekly “grand rounds,” in which students describe their work and seek direction from each other, learning to present their cases in concise terms. Sessa, who plays the role of a managing partner, likes the collaborative feel. “By the fourth or fifth grand rounds, I look up at them and say, ‘You’re a firm.’ And they are. They bond. It’s incredible how tight-knit they are,” Sessa says.

The grand rounds were “invaluable,” says Gehrke. “It helped to bounce my ideas off other people since a lot of this stuff was so new. And it was helpful hearing about other cases, what was working and wasn’t, and the different types of client interactions people were having. It was like getting seven times the experience.”

Julie Hancock ’13, who will be joining the real estate group at Boston’s Nixon Peabody this fall, worked with two clients in the clinic: a community group and a company selling handmade handbags. She drafted formation documents and supplier agreements, and counseled clients on choosing a business entity. While it was a great deal of work, she says it was “totally worth it. The experience you get working directly with clients and doing all the work yourself … you learn so much more than just sitting in a classroom.” As she heads into commercial practice, she says, “I think the transactional experience I got through the clinic will stick with me and make me feel a lot more comfortable.”

Bootstrap Compost, meanwhile, is now up to 550 clients and has diverted more than 225,000 pounds of food scraps headed for landfills into compost, helping Bostonians grow their own food and supporting a more sustainable food system while keeping the planet green. And, when future legal needs arise, the company will return to the clinic. “For young companies and startups, these kinds of programs are so important,” says Kharitonenkov.

Elaine McArdle is a contributing writer based in Albuquerque.