When help is hard to find
Hooking up nonprofits with pro bono legal aid
By Allen R. Bromberger
Chicago shoe salesman Duane Johnson decides to harvest all the barely worn, expensive footwear his upscale clients routinely toss away and distribute them to people who need shoes. He quits his job and forms "Saving Soles," which
grows exponentially as he gives away thousands of pairs in the United States and abroad.
At the same time Johnson becomes the cause's leading foot soldier, Saving Soles must become a bona fide nonprofit with 501(c) (3) status, a board, by-laws and an up-to-code personnel policy. Its Web site and brochures raise intellectual property
concerns. Expansion of services requires more space at a cheap price, which means hardball negotiations. But beyond his ideals, passion and drive, Johnson is a neophyte, trying to simultaneously learn and run an increasingly complicated nonprofit business.
A Los Angeles community development nonprofit wants to convert a residential building into transitional housing for victims of domestic violence. One 25-year tenant balks at the relocation benefits offered for the move and threatens to smear the
nonprofit and disclose the location and future use of the building. Direct negotiations between the development group and the tenant collapse in a miasma of mutual mistrust and escalating ill will.
The Northern California Community Loan Fund is an alternative lender to nonprofit direct service providers in the 42 counties of San Francisco and the Bay Area. The fund's mission to make capital available to aid self-help organizations
in low-income and minority communities demands "deals so unusual, there's nothing standard about the documents," said Mary Rogier, president. "As a nonprofit ourselves, we don't have the money to pay for lawyers."
And that's the crux of it: How can nonprofits, providers of vital services, gain access to legal expertise when cash is tight, a chronic condition? Fortunately, managers at the community development group (insisting on anonymity to protect
the nonprofit and shield the shelter), Saving Soles and the Loan Fund were savvy enough to know they needed the talents of top-notch business lawyers. The key was finding the right skills and getting them gratis.
In each case, what could have been a long, frustrating and, perhaps, futile search turned into a brilliant success because there was a go-between who ably matched the qualified nonprofit with an enthusiastic commercial lawyer in private
practice who had the expertise required.
Indeed, the "intermediary" is rapidly becoming a critical component of the refined pro bono machinery that tries to shore up the heavily burdened nonprofit sector. Encouraged by the efficacy of their role, these facilitators
are part of a nationwide network that is stimulating the evolution of organized and professional intermediaries — trading information, developing operational models, providing a constant stream of how-to help. The ultimate goal: Ensure
that legitimate nonprofits get quality legal assistance regardless of ability to pay.
"There are business lawyers who want to use their existing skills and, historically, we haven't adequately tapped those skills," said Tanya Neiman, associate general counsel at the San Francisco Bar Association and director of
its Volunteer Legal Services Program (VSLP). "For years, our program was especially famous for training and turning commercial practitioners into those who can take nonbusiness cases for individuals. Now we give business lawyers work
in their own fields. It's such an obvious thing to do for both the community and the lawyers. These attorneys are hungry for meaningful work, for ways in which to serve their community. They're good people who want to make a difference."
To mine the Bay Area's rich vein of commercial legal talent, the San Francisco Bar VLSP created a new unit called the Community Organization Representation Project with the apt acronym, CORP. A member of the national network of intermediaries,
CORP is working to refine the matching process. On the front end, it ensures that the nonprofit is legitimate and viable. "We want to make certain this is a nonprofit that can really benefit from the high level legal assistance
these firms provide," Neiman said.
On the back end, CORP and VLSP collect a range of legal talent in a volunteer reservoir. Then, Neiman concluded, we put the right two together. "Law firms and the individual lawyers can trust that when a case comes through us,
their time will be well used and it'll be worthwhile."
Impelled by ample empirical evidence of positive outcomes, the intermediary system is being replicated across the country. From San Francisco and Los Angeles, to Chicago and Detroit, to New York and Washington, intermediaries
cultivate a dual client base. First, it's the business lawyers and law firms interested, or potentially interested, in pro bono. To attract them, intermediaries have got to find compelling cases.
Second, it's the groups that build affordable housing, provide child care, health care, engage in local economic development or job creation that have expanding and intricate legal needs, whether they know it or not. In essence,
intermediaries reach for these complex enterprises operating in highly regulated industries with the accompanying freight of legal compliance.
While the last decade may have been flush with charitable giving, community-based nonprofits dedicate the bulk of their funds — as they should — to their programs, not maintaining their own underlying framework.
Now, cash is tighter. The federal government continues to disengage from providing direct help to the nation's poor and disadvantaged. State and municipal governments, caught in a contracting or stagnant economy, are scaling back support.
Perpetually pinched nonprofits, under greater pressure to do more with less, cannot afford the luxury of legal mistakes and missteps. The country's nonprofit infrastructure must be constantly reinforced so that local groups can step
in and deliver necessary social services, rekindle community business, generate jobs, revive schools and whole neighborhoods.
Intermediaries, like the San Francisco Bar VLSP's business law arm, CORP, "reach out to nonprofits and try to educate them on their legal needs they might not be aware of," said Haydee Alfonso, CORP's supervising lawyer.
From the lawyers' perspective, the intermediaries make it easy to donate their time and skills. They screen each nonprofit client to determine its mission and economic eligibility (inability to pay for legal services).
Go-betweens analyze the legal issues, collect relevant data and documents, and work up the case before placing it with a lawyer with the appropriate expertise and interest.
"We get it to the point where it's easy to pass over to an attorney," Alfonso said. "And we will always be there to back up the attorney. We bring the parties together to discuss the parameters of the relationship.
One of the things lawyers tell us over and over again is that without the screening and matching that we do, they wouldn't be doing pro bono work. They tell us they don't have the time to go out on their own and find
nonprofits and scrutinize them the way we do."
Alfonso calculated that for the 72 nonprofits CORP assisted in 2001, volunteer lawyers donated a total value in services of $891,000. Given CORP's budget, that means for every $100 spent administering the
project, $458 in legal services were provided to the nonprofit community.
For the Northern California Community Loan Fund, pro bono legal help makes it possible to stay in business. "The dollar value of the pro bono services we receive from the firms (CORP) connected us to
is high in our last audit we reported $55,000 in in-kind legal services," said NCCLF president Mary Rogier. "I think that is an underestimate. It would be very difficult for us to raise that amount
on top of the grants and contributions we already need to cover our operating expenses."
There's more, Rogier said. "The pro bono work allows us to keep our interest rate and fees to (our) borrowers low. . . . As a financial intermediary, we're not as easy to understand or as visible or
tangible as a direct service organization. Yet we offer the types of services for which the pro bono work from a large firm is highly leveraged, having an impact on many more organizations, often those that serve the poorest of the poor."
CORP paved the way to the most prestigious and best law firms in the city, reported Rogier, who added that NCCLF always knocked on the doors of the big firms with varying degrees of success. What
CORP and Alfonso did, said Rogier, was regularize, codify and broker clear arrangements. "CORP connected us with Morrison & Foerster, which has an efficient pro bono program. That automatically tripled our capacity."
The relationship proved wonderfully symbiotic for Morrison & Foerster, a prominent San Francisco firm. According to Kathi Pugh, the firm's pro bono manager, "The challenge was to find good pro bono projects that
the attorneys want to do. We wanted to get high-level work that would be challenging. We were looking for projects that used a lot of different practice groups — we have real estate, technology, corporate finance
and transaction groups. For our own selfish purposes, we want to get good pro bono work to build legal skills."
In Los Angeles, Daniel Grunfeld, president and CEO of Public Counsel Law Center, another network member, noted, "Especially when times are tough, the roles nonprofits play or fail to play is crucial. In dealing with
legal issues, especially those of established nonprofits, when you get beyond incorporation and setting up 501 (c) (3) status, you're getting into areas where nobody but lawyers can do the work, both by business practice standards and the law."
For example, Grunfeld said Public Counsel is assisting community-based health clinics that tend to people at the very lowest rank of health — the quasi-homeless, homeless or very impoverished. These clinics
are enmeshed in a regulatory labyrinth that includes the convoluted Health Insurance Portability and Accountability Act. All of it demands highly specialized knowledge.
"The intermediaries are the crucial linchpin in the long-term commitment to nonprofits. Intermediaries put together supply and demand," Grunfeld said.
But that's easier said than done. Both sides, the nonprofit and the lawyer, have expectations and needs. They have limits as to what they're willing and not willing to do, of what they can and cannot do.
It required specialized knowledge and a sensitive hand to resolve the landlord-tenant dispute that could have ruptured the LA community development nonprofit's plan for the domestic violence shelter. After a few strategy meetings
with the nonprofit, Public Counsel introduced Haven Morgan-Hubbard, a Perkins Coie LLP associate whose area is commercial civil litigation, and chaperoned several subsequent meetings.
Morgan-Hubbard and Public Counsel determined that this was no common brawl. Beyond real estate, there were also real litigation matters, Morgan-Hubbard said. "I was able to persuade the tenant that even though I'm required to be
a zealous advocate for my client, I'm a third party. I could take a step back and open the lines of communication with the tenant. I talked appraisals and comparable properties and spent many hours on the phone with the
tenant trying to get at the nature of the grievance."
It turned out the tenant felt he was low-balled on the relocation package. He was geared up to retain counsel and file an affirmative lawsuit. If he substantiated a claim that he ran a business from home, the nonprofit was
at risk for many more thousands of dollars than it offered in relocation fees. In his filed notice of appeal, the tenant was asking for double what the nonprofit was willing to pay. Despite the chasm, the case was settled three months later.
"Without pro bono, it would have been very difficult," said Morgan-Hubbard, whose firm gives billable credit for such cases. "I had to have my clients realize there were very real downsides, in dollar amounts
as well as publicizing the intended use of the property. I had to make the tenant feel he was a getting a fair shake. Conserving costs for any nonprofit is of primary importance. My client always had to be sure that whatever
money was paid out would be consistent with their donors and their board."
As for his own sense of satisfaction, Morgan-Hubbard said the psychic benefit was big. "While at first blush it's similar to a commercial dispute, there were women in the community in need of this necessary
resource. That upped the ante. For me, personally, it was very gratifying to be able to resolve this."
Furthermore, the support of Seattle-based Perkins Coie is an incentive for him to stay with the firm.
Intermediaries, in their drive to bind the private legal and nonprofit worlds, are in constant pursuit of new ways to court and serve their dual client constituency. Using Power of Attorney (POA), a national network of legal
matchmakers and go-betweens such as CORP in San Francisco, Public Counsel in LA, Community Legal Resources in Detroit and the Community Economic Development Law Project in Chicago, intermediaries are communicating with each
other, creating guidelines and "industry" standards.
POA, which also makes grants to intermediaries, sponsors semi-annual meetings, provides an Internet connection for continuing contact and idea exchanges, and provides substantive training for intermediaries
to learn to manage themselves. That includes everything from fund raising (because intermediaries are themselves nonprofits) to the mechanics of case referral and tracking systems as well as managing databases.
As a central information bank, POA gathers experiential information enabling members to generate and share flexible operating templates for intermediaries.
One of POA's grantees, Community Legal Resources in Detroit, has worked with 130 nonprofits and done more than $1million in legal work in the last three years. Steven Tobocman, its executive director,
said that before CLR, nonprofits engaged in business revitalization "had nowhere to go for donated legal services. On some deals, they had no lawyers or wound up paying a significant amount of revenue for them."
Using network connections, he consulted with Susan Kaplan, project manager at Chicago's Community Economic Development Law Project, a long-time intermediary.
What Tobocman and his board have created is a system in which everything from "bread and butter" matters — like leases and articles of incorporation — to drafting personnel policies, real estate
purchase agreements and financing gets tended. CLR also finds assistance for nonprofits dealing with their own organizational needs, such as employment policies.
"We've got nonprofits that want to change the character of a neighborhood from blight to thriving. With the clients we've serviced, they were able to get done what they couldn't," Tobocman
said. Like any other chief of a growing business, Tobocman is working the city because, he said, CLR has to be a "known quantity operating within the nonprofit community as well as within the legal community."
Joel Kellman, a founding board member and a partner at Dykema Gosset, referred to CLR as a "clearing house" and calls the response from area lawyers, including the in-house legal staff at corporations such
as General Motors and Ford, "upbeat."
Is there an economic analysis for lawyers and the firms? Kellman isn't sure it's straightforward. "You develop new housing on X and Y streets. I don't know if you can put a value on that per se.
You can certainly point to new residences, or a new drug store or a program for day care near the local school. Maybe seven houses that were vacant for 25 years and became crack houses have been torn down. I don't know how you measure that."
Then, too, Kellman pointed to the "certain feeling" a community group develops about being on the inside, not relegated to the fringe. "That group says CLR has provided us with a lawyer from a large downtown firm and we feel darn good about that representation and we'll sit down and negotiate and feel part of the process."
CLR also helps start-ups and will try to test the viability of the idea. "But," said Kellman, "we don't have enough attorneys to take everything. There may be some matches that are too difficult to make or screen."
On the flip side, CLR, like other intermediaries, has made matches that turn into something more enduring, with some lawyers even serving as general counsel.
Rather like Andrew Gruber, a third-year associate at Mayer, Brown & Platt in Chicago. During a summer internship at the Public Interest Law Initiative, Gruber caught the case of Duane Johnson. Remember Saving Soles?
Johnson, a high-end shoe salesman, couldn't bear to watch his wealthy clients jettison "gently" or never worn expensive shoes and decided to collect and give them away. Saving Soles Foundation was born in 1997.
"Duane was smart enough to figure out he needed some legal help," Gruber said. He contacted the Community Economic Development Law Project and (project director) Susan Kaplan and through them, found his legal salvation.
Gruber helped Johnson incorporate as a nonprofit, obtain tax- exempt status, draft the by-laws and other organizing documents. "When I was done with my work for the summer I didn't want to leave and never see
Saving Soles again," Gruber said. "I wanted to take them with me. When I came to Mayer Brown & Platt, I got Saving Soles approved as a pro bono client."
With Gruber as point man, Mayer Brown's diverse departments have fielded intellectual property, trademark and real estate matters. The firm assists Saving Soles with general corporate advice, organizational concerns,
personnel and employment matters, guidance on annual meetings and general resolutions. It has also reviewed contracts. "I worry about the legal issues so they can worry about the program," Gruber said. Saving Soles has given away about 100,000 pair of shoes.
Johnson basks in Gruber's dedication. "Gruber and me, we hit it off like grass and dirt together," he said. "What he did for me was show me how to make a nonprofit organization a legal company. He continues to guide and direct me."
Their latest coup? A 20,000-square-foot warehouse that Johnson wanted for the same rent as the old tenant. But a new landlord turned him down cold. "Andrew put me in touch with an attorney, Jill Nace, and she said Duane, we're the lawyers of
Chicago. You're going to get that property.' Forty-eight hours later she told me to just sign the lease."
Susan Kaplan, at the Community Economic Developed Law Project, has been around to join the sea change in business law pro bono participation. In 1985, she said, lawyers working in poverty law didn't have the sophisticated skills to manage
increasingly gordian regulations and the competitive commercial environment of the nonprofit universe. At the same time, there were all these business lawyers who never thought of volunteering. What she and her peers had to figure out was how
to create the union between those lawyers and the community groups. The role of the intermediary was obvious.
Experience counts for something. It's evident in the enthusiastic embrace of the intermediary function in more cities, with more lawyers and nonprofits uniting in a common cause for the common good.
That's welcome news because it comes just when America is depending more on nonprofits for vital and basic services — health care and education to economic and job development. Nonprofit managers, in turn, are increasingly dependent on lawyers to
help them deal with the same challenges that all commercial enterprises face. Business lawyers who answer the call, volunteering their time and talent, are making real, tangible differences in their neighborhoods and cities.
And the satisfaction they derive is something money can't buy.
Bromberger is president of Power of Attorney Inc., a private operating foundation that supports the growth of pro bono programs for business lawyers. His e-mail is abromber@powerofattorney.org.
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