News

By Andrew Foster
Assistant Clinical Professor and Director, Community Enterprise Clinic

The Duke Law School Community Enterprise Clinic (formerly known as the Community Economic Development Law Clinic) recently completed its fourth 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 continued growth and accomplishment. At the same time, we are beginning to reach a stage of organizational maturity that is quite rewarding and that should ensure continued positive experiences for students and important community impacts into the future.

Overview

This spring ten Duke Law students enrolled in the Clinic. Collectively, these students and the Clinic’s faculty provided more than 2,100 hours of legal services to our clients, several of whom had multiple matters. This represents at least $340,000 worth of legal services offered at no cost to our 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 4 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 this experience helped to prepare them for a successful transition into practice and many said that it was the capstone to their experience at Duke Law.

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

Organizational Development

During this semester, we completed an informal organizational self-assessment that led to a sharpening of our mission. Specifically, the Clinic will provide high-quality, accessible legal services to clients working to build and protect wealth in low-income and minority communities. To further this mission, we have identified three specific priority areas to which we will primarily allocate our resources. These priority areas are:

1. Representing nonprofit organizations in transactions that will have a positive community impact through the creation of affordable housing, jobs or capital investment.
2. Representing low-wealth entrepreneurs in the formation, expansion and operation of small businesses that will create economic opportunities and/or provide needed services in low-income communities.
3. Representing nonprofit shareholders in advocacy campaigns intended to impact corporate policy on issues related to the environment, diversity, labor rights and economic justice.

Going through this self-assessment process also helped to highlight the fact that the Clinic’s current name, the Community Economic Development Clinic, does not fully capture the range of our work or expertise. Through a collaborative process, we selected a new name that is more representative of the Clinic’s scope: The Duke Law School Community Enterprise Clinic. We are very excited about the new name and the image that it projects.

With respect to our staffing, we are pleased to announce that Sandra Pettiford was hired as the administrator of the Clinic at the beginning of the spring semester. Sandra formerly worked as the administrator for the clinical program at N.C. Central University’s School of Law so she is very familiar with the challenges and opportunities associated with this position. Her work with the students and faculty over the course of the semester was wonderful and we look forward to working with her for a long time to come.

In addition to the foregoing, we also had continuing success raising funds from private foundations. Most recently, we received a one-year, $50,000 grant from the Duke Endowment, with the expectation that this grant may be renewed for two additional years. In addition, we received a grant of $75,000 for each of two years from the Racial Justice Collaborative Fund to support our corporate advocacy work. More recently, we have requested support from private law firms, as well as some financial institutions. Results of these and other efforts should be forthcoming over the next few months.

Educational Activities and Accomplishments

We 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 students primarily represent clients in transactional matters, they also have 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 a few cases, students were able to assist their clients with all phases of a transaction, from conception to closing. Several students indicated that having the opportunity to counsel clients, structure transactions and participate in a deal from start to finish was an extremely valuable experience and gave them both better skills and more confidence as they prepared to enter private practice.

Through their work, 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. Our 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 three examples highlight the multiple educational opportunities offered to students through their enrollment in the Clinic.

1. W. Keith Robinson, a third-year student who will practice intellectual property law in the Washington, DC office of a large law firm following graduation, represented a client in connection with the formation of a consulting business. Keith provided this entrepreneurial client with significant counseling related to her options for structuring this business. In addition, he worked with her to identify a variety of strategic options for her business to work with clients and with other consultants and then drafted multiple contracts that the client can use to formalize these relationships in the future. Finally, Keith also did considerable research, drafting and counseling with respect to specific terms of each of these contracts designed to protect the client’s intellectual property. Throughout his representation of this client, Keith deepened his understanding of these areas of the law and, in addition, he got substantial experience with client interviewing and counseling, drafting and negotiation, and client and case management.

2. Shelley Edwardson, a third-year student who will practice securities law in the London, England office of a large, international law firm after graduation, represented a nonprofit client on a significant securities law project. Shelley’s client is becoming actively engaged in shareholder advocacy in order to impact the policies of certain financial institutions that it contends are engaged in predatory and discriminatory lending activities. The client owns a sufficient amount of stock in several payday lending companies that it intends to target, but it did not fully understand the complex process involved in bringing a shareholder resolution for consideration at a company’s annual meeting. Shelley researched federal securities laws and regulations and prepared an extensive memo for the client that explains this process and also discusses the limitations that the proxy rules impose on activist shareholders. Relying on the information provided by Shelley, the client is now working with the Clinic’s faculty to propose its first shareholder resolution. In handling this matter, Shelley quickly developed a deep understanding of the complex rules related to shareholder resolutions and proxy solicitations and was able to succinctly synthesize this information so that it could be readily absorbed by the staff of a small, community-based organization. In addition, she developed her research, analytical and writing skills.

3. Doug Holland, a third-year student who will be pursuing a LLM in Taxation at New York University School of Law after graduation, represented the founder of a small business located in the Triangle. Doug began working with this client shortly after her business was incorporated and he assisted her with various tax and securities law matters. Specifically, he helped her to obtain subchapter S status for her business. Additionally, he counseled her on numerous issues related to state income tax and state sales tax matters. Finally, Doug also helped his client develop and implement a capitalization strategy and worked with her extensively to ensure that her activities in this area complied with federal and state securities laws. This representation gave Doug 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, practical understanding of the substantive area of law in which he expects to practice after he obtains his LLM.

These are just three examples of our activities and accomplishments with respect to the Clinic’s 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 it helped to position them for a successful transition to their post-graduation activities.

Community Service Activities and Accomplishments

As the above examples suggest, our clients also benefited greatly from our services. At the most basic level, the fact that we are 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 we provide 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 our work this spring, in addition to those described above, include the following.

• Assisted a nonprofit joint venture in raising over $1 million of equity to finance an affordable housing for the developmentally disabled in Orange County, North Carolina. We assisted our client in closing the investment of more than $1 million of equity by a low-income housing tax credit investor in connection with a 26-unit affordable housing project located in a very high-cost community with very little affordable housing. Moreover, it will primarily serve developmentally disabled adults, thus meeting an extremely critical housing need in the community.

• Helped several nonprofit organizations in Durham County to form a land bank that will facilitate the development of at least 40 affordable homes per year. We represented several affordable housing developers in the formation of a joint venture through which they will form a land bank that will acquire vacant and/or dilapidated properties in specific communities in the County. The formation of this land bank is a critical development in the efforts of these organizations to build affordable housing because it will enable the group of developers to get site control of multiple properties quickly and then to hold those properties while each individual nonprofit organization attracts the resources needed to redevelop them. This collaborative will be an important asset in the efforts of these nonprofits to preserve affordable housing in areas in the County that are rapidly gentrifying.

• Provided legal services to 10 small businesses that enabled them to grow and create jobs. We assisted several small business clients with a variety of matters including business planning and structuring, entity formation, contract and lease negotiation and financing. With our assistance these businesses were able to begin or expand operations and at least 6 new jobs were created immediately. It is expected that several additional jobs will be created in the near future.

• Represented two statewide nonprofit advocacy organizations in their efforts to fight NIMBYism. Our clients are two of the state’s leading advocacy organizations focused on impacting public policy on issues impacting low-wealth communities. Currently, these two organizations are working on a multi-year project to help local developers of affordable housing develop tools and strategies to fight NIMBYism. We researched local zoning law and practice in five diverse communities in the state to assess whether local development ordinances contain specific barriers to building affordable housing. We provided our clients with a report of our findings and recommendations as to specific steps that can be taken to make it easier for the developers of affordable housing to get their projects through the development process.

These examples are but a few of the things that the Clinic’s faculty and students helped clients to achieve this semester. As we grow and expand our capacity, we will be even better able to help community-based organizations successfully undertake CED initiatives that will significantly benefit the residents of low-wealth communities in North Carolina and throughout the region.

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. We are now reaching a point of organizational maturity where we can expect that on a continuing basis all of the Duke Law students enrolled in the Clinic will have tremendous opportunities to build their legal skills and strengthen their substantive knowledge, as well as to enable our clients to achieve significant community impacts. It is very exciting to reach this stage of development and we look forward to our continued growth and improvement.

For more information about the Community Enterprise Clinic, please visit http://www.law.duke.edu/ced/.

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.