The Detroit Metropolitan Bar Association has
teamed up with lawyers and certified public accountants to
provide discount services to emerging businesses in the
city's Empowerment Zone.
Dubbed the Empowerment Zone Legal and
Accounting (EZLA) Group, this consortium of 14 law
firms and nine accounting firms offers discounts of up to 50
percent on some services to people starting, expanding or
relocating their businesses within the zone.
"This is a benefit to participants because it's an
opportunity to support and to revitalize the community.
That's important to all of us. It also feels good (to follow
through) on a commitment," says W. Anthony Jenkins, the
Detroit bar president.
EZLA has referred more than 30 clients to area
firms since it opened its doors last May. The program's
goal is to reach 200 businesses during its first year.
"We've not yet initiated an aggressive marketing
program for EZLA, but even before the official ribbon
cutting in October, we were getting referrals," says Mark
Haywood, director of EZLA and the Detroit bar's legal and
accounting services.
Detroit is one of six cities that obtained federal
funding for Empowerment Zones, which are designated
areas for urban development designed to improve the
quality of life for residents and businesses. Detroit's zone
has more than 101,000 residents and 9,000 businesses.
The formation of the Empowerment Zone, which
spans 18.35 square miles across southwest, central and
near-east sections of Detroit, began when Mayor Dennis
Archer sought federal dollars and community support for
the effort in June 1994.
He secured $1.9 billion in pledges from the top
three auto manufacturers, utilities, banks and others to offer
discount services, in-kind resources or other contributions.
The city received about $100 million in federal grants to
begin creating jobs and restoring the neighborhoods.
"The commitment Detroit's legal and accounting
firms have made to assist with the development of new
business is unprecedented. It reflects the spirit of
involvement and cooperation that is the strength behind
Detroit's resurgence," says Archer, who is a past president
of the Detroit bar and the State Bar of Michigan.
Jenkins agrees. "We're pleased with the program.
There are a lot of cases coming across my desk, so we're
just beginning to see the tip of the iceberg in the volume of
cases, which bodes well for the revitalization of Detroit,"
Jenkins says.
Some businesses may consider moving into the
zone because of special tax credits, explains Haywood.
Four tax incentives are available, including federal tax
credits up to 20 percent of $15,000 in wages for each
qualifying employee who resides and works in the zone. In
addition, increased federal tax deductions for depreciable
property and free technical assistance are available.
The idea for EZLA began in February 1995 when
the bar formed a steering committee to support the zone
initiative, according to Haywood, who is a lawyer and an
accountant.
The consortium, which underwrites EZLA and
Haywood's salary and benefits, was formed last May, and
is based at One Stop Capital Shop, a business resource
center. A kickoff meeting was held in June with the mayor
and 40 lawyers, certified public accountants and
community leaders. Since then, Haywood has made several
presentations about EZLA, such as at a national conference
for minority business development in Baltimore, which
included a White House briefing.
"Depending on the complexity and the level of
service needed, clients are referred to (lawyers and
accountants) who do that type of work," says Haywood.
Services include incorporation papers, setting up
accounts, developing a business plan, product patents,
drafting articles and bylaws, and acquiring real estate. The
discounted rates vary, depending on the firm and the
service.
However, due to antitrust laws, all participating
firms cannot provide a blanket discount, according to
Jenkins. "Also, some firms budget differently for pro bono
and discounted work. They have to evaluate each case in
house," says Jenkins, whose own firm participates in
EZLA.
Also, each firm decides how long the discount will
apply, and when to alter or eliminate it as the fledgling
business begins to sustain itself.
People who have taken advantage of the program
include a woman starting a film production company who
needed help forming the corporation and its board of
directors, and a food co-op seeking assistance with
purchase contracts and employee relations, says Jenkins.
This type of work provides valuable experience to
lawyers, particularly those who may not ordinarily be
exposed to redevelopment projects, says Jenkins. "It's also
good training for our young lawyers," he adds.
The author is the reporter for Bar Leader.
