Tag Archives | Entrepreneurship

Small Business Owners – How to Get Access to Expert Advice

[Originally posted on Dog Trainer’s Umbrella, Jan 4, 2021]

 

Vanessa O'Connor, Transactional Law Clinics of Harvard Law School

by | Jan 4, 2021

This fourth interview in our series is a special treat: our interviewee is Vanessa O’Connor, and attorney with the Harvard Law School Transactional Law Clinic. TLC is an amazing resource for small business owners who can’t afford the legal advice they need to build a strong business. Vanessa is also a smart, articulate speaker who will fire you up.

If you have not heard the story behind these interviews, here it is again:

As small business owners, we are often isolated from our peer group of other business owners.  This feeling of isolation and figuring it out on our own was exacerbated in 2020 by the effects of the pandemic.  While Facebook groups like “DTU: Marketing & Running an R+ Dog Business” can help to provide a sense of community, I was inspired this summer to reach out to other small business owners and talk to them about their industries and their stories, to see what I could learn and pass on to you. I recorded our conversations and want to share them with you here.  I had a lot of fun asking questions, finding similarities and hearing about lessons learned. Be forewarned: the recordings are unedited and low tech, more for listening to than looking at, but you may learn from the shared experiences.

Have you found any free resources that have helped you to build your business?  Is there a law school clinic in your state?  I’m always keeping my ears open for these kinds of resources so I can share them with the dog training community, so let me know.

Democracy Brewing

[Originally published by Harvard Law Today, September 17, 2019]

 

Last summer, with the help of Harvard Law School’s Transactional Law Clinics (TLC), Democracy Brewing became the first brewery in Massachusetts to launch as a worker-owned owned business. TLC, a clinical program of Harvard Law School which provides legal assistance to small businesses and entrepreneurs, helped the downtown Boston brewery incorporate, including setting up a direct public offering to raise the initial capital needed to start the business. Democracy Brewing Co-founders James Razsa and Jason Taggart; Joe Hedal, Deputy Director of HLS’ Transactional Law Clinics; and Hillary Baker-Jennings ’16, one of several TLC clinic students who advised the fledgling company, reflect on the process of getting Democracy Brewing from an ambitious idea to a thriving business.

 

Finding Your Startup Lawyer: What Every Entrepreneur Should Know

[Originally posted May 2, 2019, on the Office of Clinical and Pro Bono Programs Blog]

Via Xcomony

Photo of an open plan office space

Source: Pexels

By: Linda Cole and Joshua Fox

Successful management of any new enterprise, regardless of industry, is a process demanding of concerted effort to realize opportunity with a finite set of resources. As an entrepreneur, perfecting your vision, securing and managing funds, building a team, marketing and selling, and executing on plan, all while navigating unexpected obstacles, likely occupy your every day. At the core of whether you can succeed is whether your principal team has not only the requisite ability and experience, but the support in place to sustain it. This support, typically, derives from academic advisors, industry experts, professional consultants, and, eventually, from investors.

From whom you choose to seek advice, including from which startup lawyer, will significantly impact your progress. To assume that any corporate lawyer—and there are many able ones out there—can meet the demands of your business need not be one of your early fails. The right lawyer for your startup will not purely be a legal advisor but a strategic one—that is, an integrated teammate who is uniquely prepared to support your mission.

What makes a particular lawyer worthy of this role? A set of professional skills and personal attributes that combine with your own in just the right balance to drive success. Whether this lawyer is with an outside law firm or in house as part of your core team, our collective experience across both roles reveals a strikingly similar skillset. What, precisely, do these skills look like? You may be surprised to learn that the most predictable is, in fact, not necessarily the most impactful.

1. Risk Management

If your first contact with a lawyer is prompted by risks associated with your business, such as how to document equity owned by the founders, protect intellectual property, or engage human resources, then you are not alone. It is this expectation of risk management that creates what is, in theory, where the value of the lawyer’s contribution to your startup lies. It is, of course, imperative that your lawyer be prepared to identify, analyze and recommend steps to eliminate or, at the very least, mitigate risk.

If your startup is highly data driven, for example, your lawyer must not only understand the applicable legal and regulatory framework around the collection, storage, use, and/or sale of the particular type and form of data but, likewise, the related risks and remedies, if any, that may be employed to avoid them. There are multiple means of managing risk, such as through informed decision making, contract drafting and liability insurance, but before risks can be addressed, they must first be identified.

You absolutely need to be able to look to your lawyer for input into cost-benefit analyses relative to legal risks to your business. Ideally, you will want to choose a lawyer who has experience with companies similar to your own, either in terms of industry or issues, including having worked on the types of transactions you expect to engage in. Contrary to popular belief, however, understanding and analyzing legal risk is not the only, nor is it even the most beneficial, skill that the right lawyer will bring to your startup. It is, more specifically, the lawyer who is able to adroitly shift between advisor on risk to participant in solutions from whom you will derive the greatest value. This agility is as much a mindset as it is an expertise.

2. Partnership

Your choice lawyer may be an individual attorney or a law firm, but, in either case, you should expect and receive consistent proof that your legal counsel is an engaged member of your team. Whether a lawyer (or firm) inwardly identifies as “your business partner” will noticeably manifest, in both character and actions.

Your lawyer should be ready, for example, to support the business through creative and flexible billing practices, including offering alternative fee arrangements, such as a discounted hourly rate or fixed fee per project; estimating legal fees before commencing work; or deferring collection until your startup has realized a certain amount of revenue or capital. Willingness to experiment with such measures demonstrates that a lawyer is “on your side” by supporting your financial goals, despite the risk, and taking a long-term view of the relationship—in effect, making an “investment” in you and displaying confidence in your business’s likelihood of success.

The lawyer who thinks like a partner will consistently demonstrate that he or she cares and can be depended upon. You should feel valued after interactions with your lawyer, regardless of his or her workload, and confident that you and your business will take priority at the appropriate times. Your lawyer should be reliable and responsive, promptly returning phone calls and emails; mindful of your timeline; and able to deliver work product on time and within budget. You should never be left to worry that more mature businesses, which are larger paying clients, will monopolize the attention of your lawyer.

Perhaps the most meaningful attribute and indicator that a lawyer is prepared to be an effective teammate is a genuine interest, not simply in the business but in you as a person. The right lawyer will take the time to get to know you—your personality, your leadership style, your expectations, your work routines, and even your communication preferences—and proceed to accommodate them. In cases where you expect help analyzing risk but prefer to make the final decision yourself, your lawyer should facilitate that, by guiding you through pertinent pros and cons; but, in cases where you, instead, prefer a definitive opinion, your lawyer should provide one.

Say, for example, that you are a first-time entrepreneur negotiating a term sheet for an initial round of financing, and, with negotiations faltering, you ask your lawyer whether he or she would sign the term sheet “as is.” If your lawyer understands you to have a need for clear and concise guidance around integral business decisions, your lawyer must be able to provide you with a “Yes” or “No” answer, and not an exhaustive recitation of terms. You will likely desire some balance between analysis and opinion from your lawyer, and where he or she is adeptly able to gauge which one you prefer and when, you have forged a strong partnership.

3. Collaborative Communication

Being a good communicator is essential to being a good lawyer, partner and problem solver, especially when navigating the bumpy terrain of a startup. Your lawyer should, therefore, routinely be asking incisive questions about the particular business issue, goal, or transaction at hand. How else will he or she be able to clearly comprehend what you are looking for, what you care about most, and, alternatively, what you may not think is important? It is only through asking questions that your lawyer can construct and tailor recommendations that are both sound and relevant. After all, your business is not a hypothetical, and legal advice should never be delivered to you in a vacuum.

While posing the right questions is a necessary first step toward effective communication, your lawyer should not stop there. It is equally imperative that he or she pay careful attention to your answers. Only through active listening will your lawyer be able to understand the broader context within which your specific need has arisen. If, for example, you ask your lawyer to review and interpret a contract, the advice that you receive will be most useful to you when generated from a clear understanding, not only of the proposed transaction, but, more specifically, of your objectives and leverage relative to those of the counterparty to the contract.

Returning to our example above, if you are a first-time entrepreneur engaged in collapsing negotiations for seed financing and looking to your lawyer for guidance on whether to sign the term sheet “as is,” only if your lawyer has been carefully inquisitive might he or she know, for example, if you have spent months chasing financing, have received only this one offer, and are increasingly concerned over the resulting delay in technology development. Advice appropriately shaped by these facts would include a shift in focus toward negotiating a smaller subset of your most important issues (perhaps even just one or two) in order to make sure that a deal gets done as quickly as possible.

4. Practical Advice

Although many of the questions that you will pose to your startup lawyer will have complicated answers and, thus, require detailed analyses, you, typically, will need a succinct response. While a lawyer can spend a lot of time over email or on the phone with you summarizing relevant issues and describing the review conducted to reach his or her conclusion, this propensity is contrary to the startup reality. Time is money, and you are, no doubt, both busy and cost conscious. It stands to reason, then, that the more compatible lawyer is the one who is able to “cut to the chase.” While your lawyer should be able to work back to the analysis supporting his or her conclusion, in the course of discussing your questions, practicality dictates that the lawyer should lead with that conclusion, offering a recommendation at the outset.

As an entrepreneur, most likely with a business or technical background (rather than a legal one), you should expect your lawyer to be the one to bridge the gap and have the ability to speak your language. Your lawyer should avoid the use of legalese, so that you find the advice easily understandable and relatable. In fact, an essential component of your startup lawyer’s role is not providing legal advice—that is to say, to offer counsel on related, but non-legal, matters. For example, you may ask the lawyer representing your startup in a venture capital financing to advise you regarding how frequently particular deal terms, like participating preferred stock, are seen. Knowing how prevalent deal terms are is not “legal” advice, per se, but explaining which terms are “market” and which are atypical is a key value-add. This relevant expertise will enable your lawyer to help you to prioritize and determine which terms to negotiate and which to accept.

The ability to provide practical business advice is part of a larger skillset that will distinguish your best startup lawyer from the rest. Most lawyers will be able to educate you on how to interpret a provision in a contract or analyze risk in a transaction, but the lawyer that you want to find exercises sound judgment in the provision of real-world advice. Your world is the startup world, and, as such, your lawyer must be able to expertly determine what is important to you (and what is not), given the stage that you are at. This determination is impacted by the particular circumstances and context, such as when and how urgently you may need outside financing, and the circumstances and context need to figure into the advice that you receive.

If, for example, your startup is running low on cash—with payroll, accounts payable, and other obligations due—but has received a proposal from a prospective licensee of your technology in a specific territory outside of the United States, you may need to accept terms that are less than favorable, and it is the role of the skilled startup lawyer to help you determine what your business can live with. Your lawyer should know not to “over-lawyer,” such as by drafting and negotiating the definitive agreements in a way that adds unnecessary time, complexity, and expense to the deal or, even worse, in a way that puts the deal at risk: By continuing to negotiate a matter for which there could be a compromise or by delaying the closing date through prolonged negotiations, the deal could fall through.

5. Understanding the Business

As an entrepreneur, your business is born of an idea that you believe is unique. It could be an advanced technology, an innovative service, or a progressive social mission. Whatever it is that sets your business apart needs to be substantively understood, in both design and practice, by your lawyer.

If, for example, your startup is a software-as-a-service play, your lawyer must be familiar with the software, its functionality, feasible customizations, and what steps the business is willing to take in terms of customer care, warranty, and support. Otherwise, your lawyer will not be able to negotiate successfully with tech-savvy customers, discuss the finer points of service level agreements, and explain what credits, if any, will be offered in the event of unexpected downtime. If this dexterity is not the case with your lawyer, in order to support your sales team, then you may as well be selling off-the-shelf software, because, before the contract is even signed, the prospective customer may determine that the service piece is missing.

Equally as important for your startup lawyer to grasp is the financial model and underlying accounting principles on which your business runs. Whether you are selling a product or a service, there will be a process by which revenue flows through your business. With working knowledge of this process, your lawyer can draft and negotiate license and services agreements that, to the extent possible, support the conversion of bookings into recognized revenue sooner rather than later. Be sure that the lawyer you select does not plan to simply “do deals” for your startup but that he or she plans to help you craft deals that are structured in such a way as to support your business goals.

While finding “a” startup lawyer may seem a straightforward enough task, finding “your” startup lawyer—the practitioner whose partnership, communication, and practicality will advance your business purpose—requires that you know who and what you are looking for. The right fit from the outset often proves determinative and, therefore, you will want to evaluate carefully skills that many entrepreneurs, especially those searching for a lawyer for the first time, might not intuitively focus on.

Linda Cole is a Clinical Instructor at Harvard Law School and Supervising Attorney for the Harvard Law Entrepreneurship Project. Joshua Fox is a Partner at WilmerHale in Boston and an Adjunct Lecturer at Boston University School of Law. Both are alumni of Harvard Law School.

Community Enterprise Project Participates in Boston Ujima Project’s Citywide Assembly

[Originally published by the Office of Clinical and Pro Bono Programs (OCP) Blog on Nov. 2nd 2018]

 

Boston Ujima Project citywide assembly, October 6th – October 7th 2018

By: Samy Rais

Over Indigenous Peoples’ Day weekend, more than a hundred community members, business owners and activists assembled to celebrate and participate in the Boston Ujima Project’s second official citywide assembly. The Ujima Project was founded in 2017 with the mission to create a new community-controlled economy in Greater Boston, initially focusing on[1]:

  1. Good Business Certification and Alliance: establishing community standards (and supporting businesses) that consider business practices like living wages, Criminal Offender Record Information (CORI)-friendly hiring, local purchasing, environmental impact and affordability.
  1. Community Capital Fund: pooling savings and investments to engage in participatory budgeting to meet the enterprise, housing and consumer needs of the community. The fund will be democratically governed by historically divested communities, giving every member an equal vote on the fund’s investment priorities, loans and equity transactions.
  1. Worker Services Network: growing employee satisfaction and security by organizing human resource programs.
  1. Alternative Local Currencies: establishing alternative local currencies (like time banking) that would allow members to trade their skills and labor and incentivize circulation of resources within the community.
  1. Anchor Institution Advocacy: building community power and advancing campaigns for the City, State and large nonprofits to direct investment, subsidy and procurement dollars to Ujima’s network of certified good businesses and developers.

Since early 2016, the Community Enterprise Project (CEP) of Harvard’s Transactional Law Clinics has been supporting the Ujima Project’s inception and community-driven mission. CEP students have provided the Ujima Project with legal analysis on various transactional matters, namely corporate and nonprofit law, corporate governance structures, 1940 Investment Company Act and securities laws implications, consumer protection laws, and secured transactions. These areas of law are customarily associated with the law firm-world, but are a critical need in the public interest space. Currently, CEP students are building on work completed last semester by helping to finalize the initial documents for the Ujima Project’s Community Capital Fund to begin making investments in community-supported businesses.

As part of CEP’s support of the Ujima Project, I attended the citywide assembly with CEP director and clinical instructor, Carlos Teuscher. CEP’s attendance at the citywide assembly had two purposes: first, in following the community and movement lawyering approach, CEP believes in supporting organizations that are working to dismantle and radically restructure current systems of law and power, and it is essential to be present in order to be in solidarity with such movements; and second, it was critical to hear the voices of the community that the Ujima Project was supporting and are the most impacted, in order to effectively prepare the Ujima Project’s Community Capital Fund loan documents.

As mentioned above, the Ujima Project is creating the first-of-its-kind investment fund that is controlled by the community. While my involvement in transactional cases generally consists of undertaking legal research, drafting contracts, or forming a legal entity, it was obvious from the start that working with the Ujima Project was going to be different. Because of its community-driven approach, as its legal counsel, we need to ensure that the Ujima Project’s legal documents are able to adapt to its members’ ideas, struggles and demands, no matter how unconventional.

In that sense, the Ujima Project is both a unique project and a large-scale illustration of recurrent challenges in our work at CEP. This semester, student advocates in CEP have been advising several groups looking to form worker cooperatives in Greater Boston, which, like the Ujima Project, require democratic voting. By giving workers collective ownership in their business, worker cooperatives enable collaborative entrepreneurship and help tackle many of the issues poverty lawyers interact with on a day-to-day basis – wage-and-hour violations, health and environmental issues, immigration, criminal justice, and many others. As with the case in the Ujima Project, we need to ensure that the voices of all the members in the cooperative (undocumented/documented, low-wage workers/management, reentering citizens, etc.) are heard and reflected. At the same time, it is challenging to balance the need for urgency in the day-to-day operations and democratic management.

As we pass the mid-point of the semester, I am excited to have been able to interact with communities experimenting with and implementing alternative economic models. As an aspiring lawyer, I have appreciated the need to better understand the community you work for and their needs. Further, as a foreign student at Harvard Law School for the semester, I discovered communities in the United States, who, although being disadvantaged, gather and spare no effort or ingenuity to fight and overcome the systemic struggles they face.

[1]Ujima Concept Paper available at https://docs.wixstatic.com/ugd/40c717_f16102d86a644584af4c47c72ea2794b.pdf.

Making Change: A Harvard Law School clinic helps the homeless earn a living (video)

[Originall published by Harvard Law Today on April 19, 2018]

 

“What counts as ‘income’ for taxes?” “Will paying taxes affect the public assistance I receive?” “Will I lose my veterans disability benefits if I make too much money?” “Why should I use a bank?”

Those are some of the questions street vendors of Greater Boston’s Spare Change News grapple with. A recently published guide, “Two Cents for Spare Change News: A Legal Resource for Spare Change News Vendors,” developed by Harvard Law students, aims to provide answers.

Spare Change News, the oldest street publication in the country, provides its vendors, many of whom are either currently or formerly homeless, with the resources needed to run a business. Vendors operate as sole proprietors, buying as many papers as they want for 50 cents per copy and then keeping what they earn. While Spare Change’s mission is to show by example that, “with the proper resources, empowerment, opportunities and encouragement, homeless and low-income people are capable of creating change in society for themselves,” for vendors, selling newspapers can be an inherently unstable business for a number of reasons.

Katherine Bennett, executive director of the Homeless Empowerment Project, the publisher of Spare Change News, said vendors face complex issues. They have many legal questions, including understanding their rights and responsibilities as vendors, and they don’t have many resources. “I can’t explain how hard it is when you see these vendors who are really trying to improve their lives to see them feel so afraid that if they make one mistake they’re going to be homeless again or some terrible consequence is going to happen,” she said.

In the spring of 2017, Antoine Southern and Anne Rosenblum, then 3Ls in Harvard Law School’s Community Enterprise Project (CEP) of the Transactional Law Clinics, spearheaded a new partnership between the clinic and Spare Change to help vendors better understand their legal obligations as business owners. CEP combines direct client representation with community-based projects in which students work alongside community organizations on persistent legal problems over the course of a semester.

“Meeting with vendors, we were able to gain a sense of what they really needed, and began to develop a guide that would help with legal issues such as their taxes and personal banking and benefits,” said Southern.

According to Harvard Law School Clinical Professor Brian Price, director of the Transactional Law Clinics, working in the clinics is a great opportunity for law students to be able to learn, hands-on, how to serve the community, and to help community businesses and nonprofit organizations. Previous CEP efforts have included producing a legal guidebook for immigrant entrepreneurs, filing for an abated tax bill for low-income buyers of a new condominium, and creating legal toolkits for condominium associations and food trucks.

“We teach the same things that students will wind up doing at the firm or organization that they go to after graduating. After a 12-week semester, students feel like they’re equipped to handle what comes next,” Price said. “I’m proud of that.”

The core part of the Spare Change project involved collecting and sharing information regarding legal issues inherent in running a small business. The guide includes information on what it means to be the sole proprietor of a small business, tax obligations and how to meet them, how public benefits might be impacted by small business ownership and tips on banking services. The guide also includes resources for nonbusiness-related concerns, such as housing discrimination and mental health.

spare change co-founder with CEP students

In the spring of 2017, then-3Ls Antoine Southern (left) and Anne Rosenblum (pictured with Spare Change co-founder James Shearer) spearheaded a partnership with Spare Change News, the oldest street publication in the country, to provide guidance and answers to commonly-asked questions the street vendors have about their work with the organization.

“We were aware of the fact that vendors also face a lot of issues outside of their work with Spare Change News, so part of the resources that we included in the guide are sort of a reference to other service providers and organizations in the Boston,  Cambridge area that they might be able to turn to for help with different issues,” said Rosenblum.

Cross-collaboration between Harvard Law School clinics is an important part of the success of individual projects. With 30 clinics in a remarkably wide range of fields of law and policy, and more than 1,000 students enrolled in clinics each year, Harvard Law School is one of the largest providers of free legal services in New England. In addition to individual case representation,  students often need to take a more holistic approach to address their clients’ needs. In the case of the CEP’s Spare Change project, students sought input from several other Harvard Law School clinics to address vendors’ questions about criminal records, disability rights and housing discrimination.

“Part of our job in the Community Enterprise Project is to reach out to the different clinics that we have at the law school in order to inform the work that we do,” said Amanda Kool, a former clinical instructor in the Transactional Law Clinic. “I think we’re really lucky in the Transactional Law Clinics to have that umbrella.”

“The experiences that I’ve had have been invaluable and have given me an opportunity to develop skills and put them to use in ways that are just not available through academic classes,” said Rosenblum. “They’ve also just made my life richer and more enjoyable, a welcome break from the classroom and departure from the Harvard bubble.”

Startups: How I Channel My Entrepreneurial Interests at HLS

[Published Oct. 29th, 2015 on the Office of Clinical and Pro Bono Programs Blog]

 

By Eli A. Shalam J.D. ’16

By the time my first semester at HLS began, I was chomping at the bit to work with the Harvard Law Entrepreneurship Project (aka “HLEP”—pronounced aitch-lep). By early October, I was placed on a team with three other law students researching the impact of independent contractor and employee classifications on a company’s business model. Our client was a company that facilitated the booking of housekeepers to clean customers’ homes*. The main issue was that the company wanted strict standards to ensure the quality and consistency of the customer experience, but did not want to risk any sort of liability if, for example, a housekeeper started a major fire in a customer’s home, a customer’s pet severely injured a housekeeper, or a housekeeper accidentally spilled cleaning supplies on priceless curios. Our job was to advise the company on whether, and how, to classify the housekeepers as employees or independent contractors.

The project began to get very real for me when one of the attorneys assigned to our team suddenly perked up during the client intake meeting and realized that her husband had just used the client’s service to hire a housekeeper during the prior week! This company was already operating in the Boston area and my team and I were in a position to directly influence their business!

That January, I applied for a seat on the Executive Board and became the organization’s Vice President of Operations—managing the team assignment and administration process, from collecting client, attorney, and law student applications, to assigning everyone to a team within their top few preferences, and ensuring that projects were completed without a hitch and to the clients’ satisfaction. One year later, I became President of HLEP during a period of huge growth. In my first semester with the organization, we had 54 students working with 12 attorneys on 14 client-projects. This past semester we had 133 students working with 39 attorneys on 30 client-projects. And every semester, as I review the wide array of client applications that we receive —an entrepreneur wildly passionate about selling his favorite beverage, two separate companies trying to build power generation plants, an alternative ice-cream store, numerous pharmaceutical companies, and investment funds — I remember the project that got me started in HELP, where I was able to work with two great entrepreneurs to revolutionize home cleaning services and the 90 other companies that we have helped since then.

*The nature of the client’s business has been altered to protect the client’s privacy.