Small business start ups in underserved communities get legal support and training
This article first appeared in the St. Louis Beacon, April 11, 2012 - When Victor Washington was growing up in a hardscrabble neighborhood near Union and St. Louis Avenue, he never dreamed of owning a landscaping business, let alone getting free legal help from Lewis, Rice & Fingersh, a prominent law firm downtown. Connections count, even in the world of very small businesses. The lawyer and the landscaper were brought together as a result of an economic development program started by Legal Services of Eastern Missouri.
For more than half a century, the agency has been addressing issues ranging from health and housing to educational advocacy for children. But this new initiative focuses on giving very small businesses and nonprofits the tools and advice to get their legal papers in order. Legal Services considers it an important anti-poverty tool.
Washington, the landscaper, says the program can make a big difference to very poor entrepreneurs like himself, many of whom lack business expertise or capital. While the businesses might get loans and help from the Small Business Administration and other agencies, many still need plenty of legal advice, says Daniel K. Glazier, executive director and general counsel of Legal Services, which serves 21 counties in the eastern portion of the state.
The community economic development program offers small entrepreneurs and nonprofits help on numerous legal issues, including contracts, taxes, real estate and zoning, along with workshops and clinics on legal problems. The bottom line, Glazier says, is to make life better by uplifting poor entrepreneurs and communities.
"We are always looking for ways to give our clients opportunities to be able to get out of the cycle of poverty," he says. "Working with the entrepreneurs and vibrant not-for-profits are ways that we can make sure these opportunities and options are available in the community."
The new program means the volunteer lawyers, who contribute their time to Legal Services, are serving a different clientele. Ordinarily, most volunteers are there to do court work. But now, Glazier says, "We get a whole different group of lawyers. We're providing transactional legal work, helping folks to incorporate, helping them overcome business hurdles."
Small business stabilize neighborhoods
Laurie Hauber leads the new program. She regards community economic development as key to easing poverty in poor communities. She initially practiced law at a large firm in San Francisco before deciding that "I needed to feel that I was making a difference in the world." She accumulated a wealth of experience working for nonprofits and small entrepreneurs who couldn't afford legal assistance. She began that work while on the faculty at Vanderbilt Law School and later as a director of the Economic Justice Project in Boston. After she moved to St. Louis for family reasons, she was asked by Glazier last fall to set up the local program.
The St. Louis initiative follows more than 80 pro bono business law programs across the country. All of them differ in their services and clients, she says, adding that some of them were models for the St. Louis program.
Seven law firms from the volunteer lawyers program are handling business client cases; lawyers from two other firms teach workshops on community economic development. Funding has come from a range of nonprofits, including the Incarnate Word Foundation and several foundations associated with banks.
In time, Hauber says, such programs bring economic vitality to poor communities because "the folks that we work with are going to hire more folks. They are going to help stabilize neighborhoods."
She notes that other programs exist to help businesses of every size with support ranging from microloans to business training and mentoring. "But none of them has a legal component. We provide that missing link."
In some ways, the work by her group is made a little easier -- and challenging as well -- because it gets referrals from many other groups. "We don't have to beat the bushes to find clients,"Hauber says. Much of the assistance needed to birth a small business has been taken care of by the time the businesses seek help from Legal Services.
"That means we aren't providing legal assistance in a vacuum, which wouldn't be as effective," she says. "We're complementing what others are doing."
Dawn Price is getting help from Legal Services in obtaining non-profit status for her business called Sophia Project. A minister, Price, 35, has been providing free counseling to about 100 middle-school girls.
Once a week she visits a school, brings a group of 25 girls together, dims the lights and spends 90 minutes reading poetry and talking with them. They discuss issues such as sexuality and peer pressure. She says many girls are on track for dropping out of school due to suspensions or pregnancies.
"We start having conversations for them to start thinking about things differently before they start high school," Price says of the girls.
While offering her services free at this point, Price is getting legal advice from Theodore Agniel, an attorney at Greensfelder, Hemker & Gale, as well as Legal Services, to turn her passion into a nonprofit business that might be underwritten in part through contracts with schools.
Starting a new life
Washington, who owns the lawn services company, decided to name his business New Life Landscaping to symbolize what he says is a new look at life. Thanks to the advice he received from Legal Services, his business card includes lots of information that might not be included on the cards of hundreds of other individuals eager to cut your grass, trim your hedges and clean your basement. After his company name are the letters LLC, meaning Washington has incorporated the business as a limited liability corporation. On another part of the card is a notation that he's licensed and insured.
"I come from the street, but I've always been business-minded, always chased money," he says. "I was sitting and thinking one day about what I could do to live, and what skills I had and could use to open a business. This is how New Life came about."
It wasn't an easy transition from conception to completion. At age 38, he has had a variety of jobs but then he thought back to his work habits as a teen and young adult. "I remembered that I would cut grass and remove trash during the summer, rake leaves in the fall and shovel snow in the winter."
So he eventually scraped up enough money to buy a lawn mower and a used truck, then went to work. He soon realized he'd need capital for more equipment and workers to help him take on more clients and grow the business. Two years ago, that led him to the office of Justine Petersen, a nonprofit St. Louis organization that is the nation's third largest microlender, making more than 300 loans averaging $6,700 in 2010.
Washington's first encounter with a Petersen loan officer was unpleasant.
"She almost kicked me out of the door," he says, laughing. He hadn't known he'd need to bring along financial information to show the potential of his business.
"I didn't have enough records at the time. About a year and a half later, I went back with my client list, papers, and jobs completed. Justine Petersen saw that this guy was making some money and had his stuff together."
Still missing, however, was proof of competence on the legal aspects of running a business, issues that were resolved once Washington began working with Hauber and with Stephen T. Skaff, a Lewis, Rice & Fingersh attorney.
"Her program helped me with the paperwork," Washington says of Hauber. "I'm happy to say that I'm not out there working as an uninsured, unlicensed business. I got help with contractors' agreements, building my invoices and other legal issues. This turned out to be important because I had done work before and didn't get paid. If I had gone to court, I would have lost because I didn't have the right legal papers. It's the kind of thing that people starting a business don't always think about."
He now has about 120 clients and has hired four workers, a move that seems to reinforce Hauber's point that very small businesses can create wealth for the owner and jobs for others in a poor community.
One of the big eye-openers for Washington, however, was being introduced to Skaff at the Lewis, Rice & Fingersh law firm. Washington still talks about the day he walked into the airy and elegant atmosphere pervading the firm's downtown offices.
He opens his mouth to mimic the expression on his face that day. "When you go in there, you feel very rich. It's such a beautiful sight. I wanted to take pictures. It made me grateful and blessed for this opportunity."
In addition to Skaff, he praises Hauber, Glazier and others, saying, "It's been very inspiring just going through all of this and meeting all these people. It helps me get up in the morning."
The Legal Services program appears to be generating the kind of excitement and mindset that many had hoped for in entrepreneurs like Washington.
On some days, he says he passes the old Union-St. Louis Avenue neighborhood and sees "some of the same people on the street that I left 15 or 20 years ago."
He sees business development as a way to uplift himself and others.
"I don't want to misuse this opportunity. I look at how they have helped me, so I have got to help somebody in return. I am not just going to bring along new employees; I want to teach and inspire other people, too