ABA Section of Business Law

Volume 12, Number 1 - September/October 2002

Building neighborhoods
Pro bono works in Texas
    By D'Ann Johnson

As a first-year associate at Vinson & Elkins, Xavier Pena didn't expect to handle many cases on his own. Yet, just two months after he received his law license, he was heading from Houston to the South Texas border to meet with Robert Calvillo, the executive director of his new client, the Community Development Corporation of South Texas (CDCST), a nonprofit organization that builds affordable housing in poor South Texas neighborhoods.

The program that put Pena and CDCST together is Texas Community Building with Lawyer Resources (Texas C-BAR), a statewide transactional pro bono project that provides opportunities for lawyers to work with community-based nonprofits building housing for low income families and pursuing other community development activities.

Texas C-BAR staff make the initial contact with the clients, screen the applications for assistance, then match the clients with volunteer lawyers. Texas C-BAR then provides backup support to the volunteer lawyers to make sure the match is successful. In the case of CDCST, Texas C-BAR referred the nonprofit to Pena, who helped the nonprofit work with local governments to examine a tax increment financing plan that will encourage development in low income neighborhoods.

CDCST is a nonprofit with a small staff and little money to spare for legal advice. Through Texas C-BAR, the nonprofit receives the legal help it needs in a way that allows it to use its resources more effectively. "Our needs on the border are great, but our wallets are small," Calvillo said. "Thanks to the free legal work, we are able to put our limited money directly into projects in the community."

And CDCST is not the only one who benefits from the relationship. As a Texas C-BAR volunteer, Pena not only had the opportunity to develop a professional relationship with a CEO, but also the opportunity to use his legal skills on an issue that really made a difference in people's lives: "In addition to gaining invaluable work experience, working with CDCST has been extremely rewarding. Since I am originally from South Texas, it is especially gratifying to be able to work with an organization that helps a community that I grew up in."

Xavier Pena is one of many lawyers who have donated their time to groups like CDCST. In just two years after kicking off, Texas C-BAR has referred 150 different pro bono matters to more than 32 of the state's largest law firms and corporate legal departments. Vinson & Elkins (V&E) lawyers alone have handled more than 30 pro bono matters, providing more than 750 pro bono hours at an estimated value of $150,000 for the nonprofits.

V&E managers view pro bono work as a key to associate training and retention. The pro bono work helps the firm recruit new lawyers as well. According to Debbie Ramirez, the Texas C-BAR pro bono coordinator at V&E, "Working with clients referred to us by Texas C-BAR provides many opportunities for our transactional lawyers; young lawyers have the opportunity to handle their own clients at an early stage in their careers and more experienced lawyers are able to provide pro bono legal services in their areas of expertise."

Volunteering through Texas C-BAR, lawyers have provided assistance on a broad range of transactional matters, ranging from simple matters such as reviewing contracts to complex matters such as structuring loan transactions. For instance, Frank Oliver, a sole practitioner who practices title law, has used his expertise to deal with one of the thorniest issues confronting nonprofits developing affordable housing: clouded title. Since so many people in low-income neighborhoods die without wills, it takes only two generations for a piece of property to be caught in a stalemate with missing and unknown heirs.

Oliver worked with the Blackland Community Development Corporation in Austin to help the nonprofit clear title to a vacant lot. Bo McArver, a board member with Blackland, knows that this type of help is crucial to his nonprofit. "Without this assistance, we could never have untangled this mess to build homes on these lots. But now, the lots will finally have homes, and three low-income families will have the opportunity to own their first home."

"Texas C-BAR is the best thing since sliced bread" said John Morgan of the Center for Housing Resources. On the evaluation form that he returned to Texas C-BAR, he joked that he would not recommend his lawyer from Vinson & Elkins, Eric Winandy, to other community groups because he wanted to save him exclusively for his organization. The Center has used C-BAR three different times and recognizes that the savings in legal fees has allowed his organization to avoid using its own capital or go into debt. That makes the costs of their projects feasible.

Heather Way is the chief matchmaker behind Texas C-BAR. As a Skadden Fellow at Legal Aid of Central Texas, she served as general counsel to several Austin-based nonprofits building and renovating affordable housing. Aware of the new initiatives on transactional pro bono being advanced by the ABA and others, Way pursued the idea of giving the concept a shot in Texas, with the help of a grant from the Texas Bar Foundation.

"I knew that transactional lawyers wanted to help the poor, but there were limited opportunities in existing pro bono programs for real estate, tax and corporate lawyers to volunteer their specialized legal skills," Way said. For many transactional lawyers, volunteering outside their expertise proves emotionally unsatisfactory. But working with nonprofits results in a completely different reaction. Pro bono has moved out of the courtroom and into the neighborhoods.

"The lawyers love it and the nonprofit clients love it," Way says. "We send evaluation forms to both our lawyers and the clients at the close of the matter. The evaluations are overwhelmingly positive." The lawyers are rewarded with the knowledge that their work made a difference — a long-term difference in the lives of the poor.

And they can literally see the lasting effect of their work. A lawyer who drafts the legal documents for the development of a home can later drive by that same new house and see children playing in the yard. Over several years, a lawyer can see an entire neighborhood transformed by the work of the nonprofit. "It makes you feel good knowing that because of your legal training, you could make such an important contribution in the lives of so many families," Way says.

In-house corporate counsel are also lining up to work with nonprofits. Conoco Corp., for example, is a participant in Texas C-BAR's community counsel partnership initiative. As a community counsel partner, lawyers with an in-house law department serve as general counsel for a nonprofit. Law firm lawyers are also expressing an interest in partnering with in-house law departments to jointly represent a pro bono client. This teamwork gives an extra boost to the fee-paying relationship and makes good business sense for the law firms.

Even with the economic downturn, there has been no shortage of volunteers for C-BAR. "Pro bono time has not been a casualty of the downturn," Way says. "In fact, so many lawyers have signed up to volunteer that our staff works hard to develop relationships with new clients to meet the lawyers' demand."

Lawyers have donated hundreds of hours of time through Texas C-BAR with visible results in low-income communities:

• Rudy Mata, a lawyer with an El Paso law firm, Delgado, Acosta, Braden & Jones, P.C., prepared real estate documents so that a small nonprofit in a rural community outside El Paso could close on a USDA loan. The loan allowed the nonprofit to sell an adobe solar passive house to a low-income family.
• Roger Bartlett, an Austin sole practitioner, helped a nonprofit by drafting a ground lease and neighborhood association rules for a new subdivision in a rural community outside Austin.
• Shari Heino drafted liability waivers for volunteers and applicants for a nonprofit's home repair program, the "Helping Hearts and Hands Project." Heino reported back to C-BAR that "it was great to find pro bono work in the areas in which I have expertise — nonprofit and transactional law." The nonprofit was also positive about the experience. "Our volunteer lawyer was prompt, courteous and spent a lot of time making sure we understood why things had to be done a certain way," the executive director said.
• Morgan Ryder, with Hughes & Luce, LLP, represented a nonprofit client during negotiations with the city of Dallas for a loan to build affordable housing. With the help of Ryder, the nonprofit has now been able to move forward with the construction of six homes for sale to low-income families. "It is great to have the opportunity to do pro bono work in your particular field of law. The clients are doing very interesting things and it's a great feeling to be able to get involved in that," Ryder says about her experience.
• Philip Svahn of Brobeck Phleger & Harrison, LLP, drafted articles of incorporation and bylaws for a startup community development financial institution. Svahn and a coworker at his firm efficiently solved the client's legal needs, enabling the client to provide low-interest loans to hundreds of low-income families.
• Katherine Parsons, a lawyer with Bracewell & Patterson, LLP, helped the Crossroads Housing Development Corporation, a young organization in rural West Texas that did not have funds to hire a lawyer. Parsons put together a comprehensive owner-financing package with forms and instructions for the nonprofit "Fresh Start Program."