Impact Spring 2005
Summary of Activities and Accomplishments
The Duke Law School Community Enterprise Clinic (the “Clinic”) completed its sixth semester of operations this May. Although the Clinic operates on a year-round basis, the end of a semester is a good time to pause and reflect on our recent activities. This past semester was an exciting time of sustained development for the Clinic. We worked on a number of challenging matters for both new and returning clients.
This spring the Clinic worked with a total of 14 Duke Law students and represented 37 clients, several of whom had multiple matters. Collectively, these students and the Clinic’s faculty provided more than 2,250 hours of legal services to these clients. This represents at least $375,000 worth of legal services offered at no cost to the Clinic’s clients. The cost of operating the Clinic during this period was approximately $100,000. Thus, the resources of the Clinic were leveraged at a rate of nearly 4 to 1 to create a substantial community impact.
The Clinic successfully met its dual mission of providing substantial community benefits, as well as valuable educational opportunities for the Duke Law students enrolled in the Clinic. Students developed critical legal skills and deepened their substantive legal knowledge. As a result, students indicated that they felt the Clinic helped to prepare them to successfully transition into practice and many said that the Clinic was the highlight of their Duke Law experience.
This summary briefly describes the Clinic’s activities and accomplishments over this past semester in each of the following areas: organizational development, legal education and community impact.
During the spring semester, the Clinic enrolled 12 students. In addition, two students who were enrolled in the Clinic during the fall 2004 semester continued to work with the Clinic on a limited basis, representing one client each.
The Clinic co-hosted a successful conference on social enterprise with the Center for the Advancement of Social Entrepreneurship at the Duke University Fuqua School of Business this past June 1st. Over 110 participants attended the conference, representing nonprofit organizations throughout North Carolina and other states of the southeast. The conference focused on business strategies undertaken by nonprofits that generate revenue in support of their charitable mission. The conference served a community need and provided the nonprofit community with valuable information and resources to strengthen and improve their planned social enterprises. In addition, the conference began to engage both academics and practitioners in thinking about and collaborating on the significant business and legal issues surrounding the development of social enterprises.
Together with the other Duke Law clinics, the Clinic submitted an application to the Duke Center for Instructional Technology requesting funding to explore and make better use of the technology that will be available to the Clinic faculty once the Clinic moves to the new wing of the law school that is currently under construction. In addition, the Clinic expects that its $50,000 grant from the North Carolina Fund of the Racial Justice Collaborative will be renewed for a second-year. The Clinic also plans to submit grant proposals to the Golden Leaf Foundation, the Z. Smith Reynolds Foundation, the F. B. Heron Foundation and the Public Welfare Foundation in the coming months.
Educational Activities and Accomplishments
The Clinic represented a variety of small business owners and non-profit organizations on a broad array of matters, from the basic formation of an S-corporation to counseling on issues related to a client’s issuance of her company’s stock. These cases offered the students enrolled in the Clinic meaningful opportunities to develop critical legal skills. Each student in the Clinic this semester had primary responsibility for at least three matters and most students were responsible for either multiple clients or multiple matters. In addition, this semester students had the unique opportunity to work in a transaction team setting, where six students collectively worked on one client matter, in much the same manner that lawyers work in practice. Students also engaged in a 4-week simulation of a client transaction through the classroom portion of the Clinic. The simulation and direct client representation provided all of the students with extensive opportunities to develop fundamental legal skills such as client interviewing, client counseling, drafting and case management.
Furthermore, students had the chance to develop legal skills that are particular to a transactional practice. Specifically, students engaged in drafting and negotiating transactional documents and working with clients to structure business arrangements, taking into account corporate, tax, securities and other areas of law. In some cases, students counseled clients on the structure of their transactions or organizations and drafted the relevant documents. In other matters, students took on a counseling role where they provided valuable advice to clients. In all cases, students indicated that having the opportunity to counsel clients and negotiate on behalf of clients was an extremely valuable experience that strengthened their skills and gave them more confidence as they prepared to transition from Duke Law to practice.
Through their work in the Clinic, 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, non-profit law, tax law, employment law and intellectual property law. The matters this semester were both diverse and complex. As a result, students were able to work on cases that deepened their understanding of a particular area of law while they were engaged in important skills development. The following examples highlight the multiple educational opportunities offered to students through their enrollment in the Clinic.
1. Rori Bailin, Alexa Chew, Joanna Jordan, Mike Levin, Rob Stevenson and Dan Xu, all third-year students, except for Joanna who was in the third year of her four-year JD/MBA program, assisted a non-profit corporation in structuring a technology transfer transaction. This was a complex project that included multiple issues related to tax-exempt, non-profit and intellectual property law. Students worked with the client to refine a plan for transferring the right to use its technology to a for-profit corporation in exchange for a stream of revenue that will help the client sustain its core work. Through this project, students improved their analytical skills by thinking through various possible options for structuring the transaction. In addition, students honed their interviewing, negotiation, research and counseling skills. Students also successfully worked as a transaction team on this project, which was a new experience for students in the Clinic who generally work on projects individually and occasionally in teams of two.
2. Jun Liu, a third-year student who is a lawyer in China and who plans to return to China after graduation, represented a non-profit organization in eastern North Carolina in connection with a corporate governance project. The organization is a community development corporation that creates affordable housing. Over the years, the organization has created multiple subsidiaries that own some of its housing projects, while continuing to own and operate other projects through the nonprofit organization. Jun consulted with leaders of the organization multiple times and conducted due diligence to determine the legal structure of each of the organization’s subsidiaries. Through this project, Jun honed his interviewing and counseling skills. In addition, Jun learned how to manage and organize a large project in order to help his client begin to understand its corporate structure and to potentially make changes to its structure to improve its corporate governance.
3. Raegan Watchman and Rob Stevenson, both third-year students who will work at large law firms in Dallas and Los Angeles, respectively, assisted a Clinic client in defending its position in connection with its submission of a shareholder resolution to a publicly held financial institution. Last fall the Clinic assisted the client in drafting the shareholder resolution requesting that the financial institution refrain from making loans to lenders that are engaged in predatory payday lending. The financial institution then submitted a No-Action request to the Securities and Exchange Commission (“SEC”) and this spring the Clinic assisted the client in formulating a response to the No-Action request, which was submitted to the SEC. Raegan and Rob quickly learned about the No-Action request process and the substantive securities law needed to draft a response letter. Through this project, Raegan and Rob improved their research, analytical and writing skills. In addition, both Raegan and Rob learned a great deal about the securities regulations and SEC pronouncements related to shareholder resolutions.
These are just three examples of the Clinic’s activities and accomplishments with respect to its educational mission this semester. While each student worked on different matters, each student had a similar educational 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
The clients of the Clinic also benefited greatly from our services. The Clinic is able to provide sophisticated legal services at no cost, substantially reducing the transaction costs associated with our clients’ activities. This helps make a wider range of transactions more feasible and allows clients to begin considering legal issues associated with their transactions much earlier in the process. Even more important, however, is the counseling that the Clinic provides to clients. Our knowledge of financing options and strategic advice enabled many clients to initiate impact-oriented community development projects that they would have been otherwise unable to undertake.
Some significant results of the Clinic’s work this spring, in addition to those described above, include the following.
- Assisted a community development corporation in structuring a lease-to-purchase home ownership program. The Clinic worked closely with the organization to structure and draft the relevant documents for a lease-to-purchase program. Through the program, the organization will be able to lease new homes to families for a short period of time and then sell the home to the family once the family has been approved for a loan to buy the home. This program will allow the organization to reach a broader range of families, increase homeownership and maximize its positive impact in the community.
- Presented training sessions on legal issues to at least 80 small business owners. The Clinic provided five training sessions this spring to individuals who are currently operating a small business or who plan to start a small business in the near future. The training sessions focused on the key formation issues for a small business and were part of the small business training program operated by a local non-profit organization. The training sessions met an important community need and have grown in the number of participants each semester. Following the trainings, the Clinic assisted some participants in creating a corporation or with general legal advice regarding their business. The Clinic expects to work with additional training participants as they develop their business ideas.
- Drafted a bill to create a fee to finance the disposal of abandoned and neglected manufactured homes in North Carolina. The Clinic assisted a client in researching and drafting a bill that will impose a fee on purchasers of manufactured homes in order to dispose of aging and potentially dangerous manufactured homes. The fee is modeled on similar taxes in other states and on the white goods tax in North Carolina. The passage of this bill will help to significantly improve the landscape of low-wealth communities throughout North Carolina, particularly communities in rural areas.
- Represented a collaborative of three nonprofit organizations in the development of 14 affordable homes. The Clinic worked with the nonprofit organizations to structure the transaction and draft the documents for the homeowners association. With the Clinic’s assistance, the collaborative will be able to provide quality new homes to 14 low-income families.
These are a few examples of the many things that the Clinic helped its clients achieve this spring. We are very excited about the results that this on-going collaboration with entrepreneurs and community-based organizations has produced and expect to achieve greater impact in the future.
The Clinic continues to develop and demonstrate that it is well positioned to meet both its educational and community service missions. Duke Law students enrolled in the Clinic continue to have outstanding opportunities to build their legal skills and strengthen their substantive knowledge of law through the learning experience offered by the Clinic. In addition, these students work with the Clinic’s faculty to provide high-quality, sophisticated legal services to clients that often would not have access to legal services. This has enabled the Clinic’s clients to achieve significant results and improve communities throughout North Carolina. It is exciting to see the multiple educational and community benefits provided by the Clinic and we look forward to the Clinic’s 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 rising second-year law student and $100/hour for a rising third-year law student. These rates are similar to those charged at large law firms in North Carolina for law clerks.