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Lawyers for startups

Legal clinic serves entrepreneurs who don't have much money but need setting on the right path

PAMPLIN MEDIA GROUP: JOSEPH GALLIVAN  - Executive Director Julieanna Elegant  of the Lewis & Clark Law School's Small Business Legal Clinic. She is holding a client's product, NW Ferment's fermentation start.

In the white-collar world, going to see a lawyer is the equivalent of seeing red and blue lights in your rear mirror, or hearing the whistle of the dentist's drill.

Small businesses are often so small that their owners don't even realize they need legal advice. But according to Julieanna Elegant, they really should cover themselves.

Elegant is the Executive Director of the Lewis & Clark Law School's Small Business Legal Clinic (SBLC), which serves all Oregon but most of whose lawyers are based in the Portland area. The focus is on low-income business owners, the startups and the entrepreneurs who are the plankton of the Oregon economy, who might one day evolve into the sharks.

For a hairdresser or chocolatier who goes from working in their home kitchen to setting up shop, seeing a lawyer can be expensive, confusing, and often raises more fears than it allays.

However, this Small Business Legal Clinic aims to serve just those people on the margins.

The lawyers are with you

"Seeing a lawyer is cost prohibitive," says Elegant flatly. Especially for the sort of clients who end up in the SBLC's rather unglamorous offices at 310 S.W. Fourth Ave.

Forty percent of the school's clients are immigrants or minorities owned, and that rises to 70 percent when you include women-owned businesses.

"We serve everyone who fits under the guidelines: if they are Oregon–based and low income. We are particularly proud of servicing those who wouldn't normally be able to have this support."

The first thing every business needs help with is entity formation. Should that earring booth or pet tuxedo rental service you started with your pal be a Limited Liability Company, a sole proprietorship, a B-Corp, an S-Corp, or what?

At its cheapest level, the SBLC charges $25 a matter. A matter is an issue, such as entity formation, trademarking, contracts etc. Elegant says it's a flat $25 whether it takes two hours or fifteen. Most lawyers wouldn't open an email for $25, but the SBLC likes to catch them early.

Volunteers wanted

The SBLC has two full time staff lawyers and every year uses 275 volunteer lawyers, as well as around a dozen law student interns.

She stresses that they are a general, small business clinic. "This is not the place to come for esoteric trade rules with country X. We are for when there's only two of you and you're trying to create an agreement that's the best for both of you."

Charges rise on a sliding scale by income and the complexity of the issue. Applicants have to qualify, of course. The SBLC has digitized some of this process, allowing people to file their household income and basic questions online before coming in for a consultation. Household income is measured against the mean established by the US Department of housing and Urban Development (HUD).

Don't just Google it

Elegant says any business owner will have contracts, whether it's a lease, a partnership agreement, insurance or a waiver.

Just Googling stuff doesn't cut it.

"You have to make sure all the contracts you're signing are in order. Sometimes people try to cut corners by downloading something off the Internet and making some changes, but you get what you pay for." For example, a general contract might cover X, Y and Z, "But maybe in Oregon there's a Q? There are variables."

Booming businesses are faced with the happy need to hire extra staff. Having worked with the Department of Labor, Elegant's antennae are attuned to hiring practices.

Landlords and leases — who knew?

"Any time hiring employees, there are a lot of regulatory agencies who could step in and make sure you're doing it properly. It's a lot cheaper to talk with an attorney to make sure you are doing it correctly from the beginning, rather than deal with regulatory agency when they find out you're not doing it correctly."

Leases are also tricky. Legalese is opaque, and even tougher if English is not your first language.

"For example, installations. A lot of people don't understand that things they may have paid for and installed, equipment such as a hood in a restaurant kitchen, may now legally belong to the landlord. They sink thousands of dollars into a space with a one year lease and then find when it's time to renegotiate the lease it's no longer theirs." She says a lawyer can tell what the statutes cover and what's specifically addressed in the lease.

Elegant sees companies flourish and move on to need new help. Maybe they're trademarking their name or filing a patent. Patents used to be dealt with by lawyers in California, but the Elegant is proud the SBLC now has two law students with PHDs (and strong science backgrounds) interning under a volunteer patent lawyer. Four businesses have patents pending.

"Low income" is not a relative term. They look at the adjusted gross income of the household. That creative chef with the Nike executive spouse is not going to qualify, even if their business income is still a dribble.

Tough call

"We do have people calling us, unhappy, saying it's their business not their spouse's.

I understand, but the funding we get is to support people who wouldn't have any other options. And your executive Nike spouse is going to prohibit you from receiving our service."

As Executive Director, Elegant handles that call.

"We're here to help people who wouldn't be able to get this help otherwise. The more I'm helping people who have other options, the less I'm helping people who don't."

She says lots of law schools have legal clinics for the underserved, but the SBLC has a larger footprint than most. It's not just a place for law students to get experience, it's supposed to provide a substantial service. The Pro Bono program is large. She had a pair of clients divided between Oregon and Massachusetts. In considering where to base their company, they learned that Oregon offered a lot more help to startups. The SBLC is part of a network which refers companies for different types of help.

They work with nonprofits such as Portland Community College's Small Business Development Center, the Portland State University Outreach Program, MISO, the Hispanic Metropolitan Chamber of Commerce, and the Hacienda CDC (who did the Portland Mercado at 7238 S.E. Foster Road.)

PAMPLIN MEDIA GROUP: JOSEPH GALLIVAN  - Executive Director Julieanna Elegant and Staff Attorney Brian Dasso both advise small businesses on legal advice through Lewis & Clark Law Schools Small Business Legal Clinic.

Your money here

Aside from the small income it brings in from clients, the clinic receives an annual $100,000 grant of taxpayers' money from the Portland Development Commission.

It used to share the space with bankruptcy, family law and housing clinics. However those three closed due to lack of funding. The SBLC has doubled in the past three years since Elegant came on board.

In a back room you can find Jan Pierce, the college's current tax professor. He retired from the IRS 17 years ago but still likes to work.

Mostly it's negotiating with the Internal Revenue Service when an individual receives a letter demanding back taxes. The tax clinic receives funds from the IRS. Elegant notes the irony that this money is sometimes used to sue the IRS. Sometimes they win attorney fees, but usually they are trying to prevent problems getting that far.

Although Elegant comes out of social work and doing legal work for immigrants around labor practices, SBLC's other lawyers have strong business backgrounds.

That's another thing they provide: a network for people who have none. Someone with an MBA or who comes from a family of business owners might have a network already in place. They need a lawyer? Dad finds them one at the country club.

"We want to get them connected. This is not a one-stop, here's the legal question answered. Most of the clients come to us having received support, or they could benefit from being connected to our partners."

"We work with a lot of creatives," she says, referring to the subset of skilled workers whom Oregon's elected leaders agree are crucial to the Portland economy.

Creative differences can be gnarly. There's a rock band on the books right now, whom she cannot name, who are going on tour and need their trademark issues sorted out. The SBLC sees a lot of food clients, such as Treehouse Chocolate (drinking chocolate) and Bee Local (honey.) They have a hat maker, a doll maker, someone making hot sauce, powdered cricket protein for energy bars, and packaged fermentation starts (Northwest Ferment - think kombucha and sour dough).

"We're lawyers, we're risk-averse," she says with a laugh. "Anything to do with ingesting things, or children, is high risk."

So, are earrings risky?

"If you're allergic…"

Slippers?

"Maybe."

Stuffed toys?

"Yes. Children…"

She explains why seeing a lawyer is so important.

"You should look at what cost is going to be to you. Does it make sense? At the end of the day it's about money."

Once they get established, companies might need a relationship with a lawyer and she is happy to see them move on. "Then it makes sense to pay more, and not be pro bono where you have to wait four to six weeks for an appointment."

"A lot of people have a passion but they don't have money to see an attorney. We're where to help them so as they grow there won't be a legal bump that will come up and completely derail them."

The SLBC has three programs, which reflect income level. In rising order of cost:

1. The Pro Bono Program

This serves business owners with basic needs, such as entity formation, contracts, protecting intellectual property and dealing with the Department of Labor. (Pro bono is lawyer Latin for a freebie. They also use the term Low Bono, for next to nothing.)

2. The intern Program

Clients see one of a dozen law students from Lewis & Clark College who are earning college credits for their work, which is supervised by experienced lawyers.

3. The Fee for Service Program

A little bit more expensive, most of the clients are nonprofits such as affordable housing developers. They get to see one of the two in house attorneys.

COURTESY: GREG HOSKINS - Dave and Meghaan Cummings celebrated their wedding at the Tin Cantina. The owner Deanna Wohlgemuth sought legal advice from the Small Business Legal Clinic.

Tin Cantina: From gimlets to glamping

One client that is happy with the SBLC is Tin Cantina owner Deanna Wohlgemuth. First she took a micro business enterprise course with the Native American Youth and Family Center.

Tin Cantina started out as a mobile bar in a vintage Airstream camper. Wohlgemuth formed an LLC and dealt with issues around alcohol with the OLCC. When people requested the cute trailer for glamping she bought a second one. The SBLC helped her with contracts, insurance and other risks around vehicles and renters' safety.

"Without it I don't know if I would have been able to grow, and take chances on growth. I would have been stifled, trying to find and attorney whom I could trust and afford.


Joseph Gallivan
Reporter

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