Fall 2003

Summary of Activities and Accomplishments

The Duke Law School CED Clinic recently completed its third semester of operations. Although the Clinic operates on a year-round basis, the end of a semester is a good time to pause and reflect on our activities. This past semester was an exciting time of growth and accomplishment.

Overview

This fall the Clinic enrolled ten Duke Law students and represented 34 clients. Collectively, these students and the Clinic’s faculty provided more than 1,775 hours of legal services to these clients, several of whom had multiple matters. This represents at least $225,000 worth of legal services offered at no cost to the Clinic’s clients.[1] The cost of operating the Clinic during this period was approximately $80,000. Thus, the resources of the Clinic were leveraged at a rate of more than 2.5 to 1 to create a substantial community impact.

While providing these important community benefits, the Duke Law students enrolled in the Clinic developed critical legal skills and deepened their substantive legal knowledge. As a result, all of the students indicated that they felt the Clinic helped to prepare them to successfully transition into practice and many said that the Clinic was the capstone to their experience at Duke Law.

During this period, the Clinic’s organizational development also continued through the addition of a new faculty member, Noemi Flores. Ms. Flores brings a diverse set of skills, as well as a special commitment to the work of the Clinic. Her contributions to the Clinic this semester were invaluable and her presence will help ensure that the Clinic achieves long-term success.

This summary briefly describes the Clinic’s activities and accomplishments over this past semester in each of these areas: community impact, legal education and organizational development.

Organizational Development

The addition of Noemi Flores as the Clinic’s Supervising Attorney marks a significant step in its organizational development. Ms. Flores joins the Clinic from the Chicago office of the Gardner, Carton & Douglas law firm where she practiced corporate and securities law. She received her B.A. degree from Harvard University and her J.D. from Columbia Law School. While at Columbia she was both a student and a teaching assistant in that law school’s Non-Profit Organizations/Small Business Clinic. Thus, she has both the strong base of professional skills and the commitment to teaching that are required in a clinical setting. Moreover, she is fluent in Spanish, an asset that will enable the Clinic to begin to address the legal needs of the state’s growing Latino population. Once Ms. Flores is licensed in North Carolina, it is expected that the Clinic will increase its enrollment to at least 12 students per semester.

During the fall, the Clinic also continued its growth by expanding its eligibility criteria to permit the representation of small businesses owned and operated by low-wealth entrepreneurs. These small business clients have pressing legal needs that they cannot afford to hire private counsel to solve. The lack of attention to these matters, however, can threaten their chances for success. To meet this need, the Clinic began taking referrals of prospective clients from the North Carolina Institute for Minority Economic Development and Good Work, Inc., two North Carolina non-profit organizations that provide technical assistance to low-wealth and minority entrepreneurs. Over the course of the semester, the Clinic represented 16 such entrepreneurs. These cases provide wonderful learning opportunities for students and enable the Clinic to directly support job creation activities. As a result, we look forward to expanding this area of representation in the future.

In addition to expanding its staff and taking on new types of cases, the Clinic also had continuing success raising funds to support its work from private foundations. Most recently, the Clinic received a one-year, $50,000 grant from the Z. Smith Reynolds Foundation. The continued support of this leading foundation is a tremendous vote of confidence in the Clinic and should help leverage support from other funders. The Clinic also submitted grant requests to the Duke Endowment and the Racial Justice Collaborative Fund. Results of these and other efforts should be forthcoming over the next few months.

Educational Activities and Accomplishments

The Clinic represented a significant number of clients on a wide range of matters this semester. These cases offered the Duke Law students enrolled in the Clinic meaningful opportunities to develop critical legal skills. For example, each student had primary responsibility for at least one client and most students were responsible for either multiple clients or multiple matters. This provided all of the students with extensive opportunities to develop fundamental legal skills such as case management, client interviewing and client counseling.

Because the Clinic primarily represents clients in transactional matters, the students also had the chance to develop legal skills that are particular to this type of practice. Specifically, all students engaged in drafting and negotiating transactional documents and working with clients to structure business arrangements, taking into account corporate, tax, securities and other legal considerations. In some cases, students were able to assist their clients with all phases of a transaction, from conception to closing. In other matters, students got to experience a frustration common to all transactional lawyers: the deal that does not develop. No matter the outcome of the cases they worked on, however, students indicated that having the opportunity to counsel clients, structure transactions and participate in a deal was an extremely valuable experience and gave them both better skills and more confidence as they prepared to transition from the Law School to practice.

Through their work in the Clinic, the students also had the chance to increase their knowledge across a wide variety of substantive legal areas including: real estate law, corporate law, securities law, the law of corporate and real estate finance, administrative law, employee compensation and benefits law, tax law and the law of tax-exempt organizations. The Clinic’s clients presented a surprisingly diverse number of issues. As a result, students were able to handle cases that deepened their understanding of a particular area of law while they were engaged in skills development. The following examples highlight the multiple educational opportunities offered to students through their enrollment in the Clinic.

  1. Caroline Belk, a third year student who will be a Federal court clerk in Greensboro following graduation, represented a client in connection with the financing of a new cooperative grocery store being developed in Chatham County. It is expected that the store will be a model community-owned business, both creating jobs and promoting health. Caroline provided extensive counseling to the client to help it structure the process through which it will raise the capital needed for the project. This required Caroline to quickly gain a deep familiarity with certain securities and corporate laws. Throughout her representation of this client, Caroline deepened her understanding of these areas of the law and, in addition, she got substantial experience with client interviewing and counseling, drafting and negotiation, and client and case management.

  2. Kristi Guillory, a third year student who expects to practice transactional law after graduation, represented a low-wealth entrepreneur in the formation of her business. In addition to counseling the client as to the best corporate structure for the business, Kristi determined, through her interviewing of the client, that a potential dispute over intellectual property existed between the client and a former business partner. To prevent this potential dispute from undermining the chances that her client’s new venture would succeed, Kristi helped negotiate a settlement and drafted the appropriate documents to memorialize the parties’ agreement. In handling this matter, Kristi got full exposure to the issues involved in a basic corporate transaction and developed her client interviewing and counseling, drafting and negotiation, and structuring skills.

  3. Chad Nicholson, a second year student who is considering practicing community development law after graduation, represented a community development corporation (“CDC”) based in the Triangle in the initial stages of the redevelopment of an historic community facility in Southeast Raleigh. The building, informally known as the Safety Club, served as a meeting place, dance hall and movie theater to the community’s African-American population during segregation. In recent years, however, it has fallen into disrepair and Chad’s client was determined to revitalize the building for use as a community center. Chad helped facilitate this process by drafting and negotiating several agreements related to the project, including a contract with the general contractor. This representation gave Chad the opportunity to engage in extensive client interviewing and counseling as well as drafting and negotiation. It also gave him the chance to get a much deeper understanding of the substantive area of law in which he may be practicing.

These are just three examples of the Clinic’s activities and accomplishments with respect to its educational mission this semester. Each student had a similar experience. As a result, all of the students indicated that the Clinic was a key part of their education at Duke Law and that participation in the Clinic helped to position them for a successful transition to their post-graduation activities.

Community Service Activities and Accomplishments

As the above examples suggest, the clients of the Clinic also benefited greatly from our services. At the most basic level, the fact that the Clinic is able to provide sophisticated legal services at no cost substantially reduces the transaction costs associated with our clients’ activities. This helps to make a wider range of deals more feasible. Even more important, however, is the counseling that the Clinic provides to clients. Our knowledge of public and private sector financing options, assistance with structuring transactions and strategic advice enabled many clients to initiate impact-oriented CED projects that they would have been otherwise unable to undertake.

Some significant results of the Clinic’s work this fall, in addition to those described above, include the following.

  • Represented a CDC in the financing of an historic rehabilitation project in eastern, North Carolina. The Clinic assisted a client with the investment of more than $750,000 of private capital in a project involving the rehabilitation of two historic buildings in the downtown area in Tarboro, North Carolina. Specifically, the Clinic helped its client to leverage the federal and state historic tax credit programs to raise these funds from private tax credit investors. The project is a critical component of efforts to revitalize this small city’s commercial district and may serve as a model for rural community development activities in this region.

  • Represented CDCs throughout North Carolina with the structuring and financing of multiple affordable housing projects. Among other matters, the Clinic represented a CDC in Elizabeth City in connection with the development of a 40 unit single family housing development. The Clinic also assisted a CDC in Rich Square on a project that will create 44 units of affordable rental housing in a rural community in eastern North Carolina. As another example, the Clinic represented a CDC in the Triangle with the development of a 26 unit affordable, multi-family rental project for the developmentally disabled. In total, the Clinic provided legal services to clients in connection with housing projects that will add more than 100 units to the state’s affordable housing stock upon completion.

  • Provided legal services to 16 small businesses operating in low-wealth communities in the Triangle. The Clinic assisted the clients with a variety of matters including business planning and structuring, entity formation, contract and lease negotiation and financing. With the Clinic’s assistance these businesses were able to begin or expand operations and at least 10 new jobs were created.

  • Represented a statewide nonprofit advocacy organization in its efforts to end predatory lending. Our client is one of the nation’s leading community reinvestment advocacy organizations and has a long history of working with mainstream banks to help them improve their lending to low-income and minority individuals and communities. More recently, it has begun to work to end predatory lending practices such as payday lending services. In connection with this campaign, the Clinic helped its client use a variety of stockholder advocacy strategies to impact the policies and practices of multiple predatory lenders active in North Carolina.

  • Assisted a regional nonprofit to develop a comprehensive understanding of the laws and regulations affecting manufactured housing in multiple states in the southeast. For many low-wealth individuals and families, particularly those in the South, manufactured housing is their only option for affordable housing. However, the laws and regulations that govern this industry are not well understood. To address this problem, the Clinic conducted an extensive research project to analyze existing laws and regulations in several southern states and to identify opportunities for improving these regimes to make manufactured housing a better housing alternative in the region.

These examples are but a few of the things that the Clinic helped its clients to achieve this semester. We are very excited about the results that this on-going collaboration with entrepreneurs and community-based organizations is producing and expect to achieve greater impact in the future.

Conclusion

Since its beginning, the Clinic has grown quickly and demonstrated that it is well positioned to meet both its educational and community service missions. To date, all of the Duke Law students enrolled in the Clinic have had tremendous opportunities to build their legal skills and strengthen their substantive knowledge through the hands on education offered through the Clinic. In exchange, these students have worked with the Clinic’s faculty to provide high-quality, sophisticated legal services to clients. This has enabled our clients to achieve significant results for the communities that they serve. It is exciting to see the multiple benefits provided by the Clinic and we look forward to its continuing development.


[1] The portion of this figure attributable to time worked by Duke Law students is based on an assumed billing rate of $85/hour for a second year law student and $100/hour for a third year law student. These rates are similar to those charged at large law firms in North Carolina for law clerks.