The Need for Small Business Pro-Bono
(Originally published in the NY Law Journal, in my role as Chairman of the New York State Bar Association Corporate Counsel Section see below for further copyright information).
“The business of America is business” - Calvin Coolidge
The U.S. GDP is now close to an awe inspiring $18T,[1] and “small businesses” (generally defined as 500 or fewer employees) contributed around 46% of that total.[2] As of 2013, there were 28 million of them (compared to about 20,000 “large” businesses), accounting for 54% of all annual sales,[3] 33.6% of known export value ($471B out of $930B), 48% of private sector employees (57M out of 118M employees) and 41.2% of private payroll.[4] And yet, 80% (23M) of these tiny economic engines of growth, are armies of one, with no employees at all.[5]
However, for all their ferocious and tenacious “can-do” optimism, only about half of them make it to the five year mark.[6] While many reasons account for potential failure,[7] one not often addressed is a lack of access to reliable legal assistance. There are many legal errors budding entrepreneurs can make from not securing a copyright on valuable IP, to not creating a shareholder’s agreement.[8] Unfortunately, many of these modest “mom & pop” operations cannot afford qualified legal counsel, which often can cost upwards of $300-500/hour in places like New York City. Lawyers might regard these fees as simply a deductible cost of doing business, but for someone just starting out, those fees simply are prohibitive.
Most talk of pro bono relief seems to focus around pressing personal concerns such as debt relief, government benefits, immigration, and landlord tenant; even NYSBA’s own website for pro bono services seems to have no category for “business,” “contracts,” or “intellectual property,” for instance.[9] While it is laudatory there is so much interest in providing compassionate assistance for those with dire individual needs, consideration also should be given to nurturing fledgling enterprises that will propel economic prosperity, not only to the owners of these businesses, but also to their future employees, suppliers, and contractors.
Fortunately, there are more and more resources for small businesses, including commercial, nonprofit, and government websites with free or low cost legal guides, sample contracts, or directories of those able to offer free legal advice.[10] There are even some bar associations (such as Washington D.C.) that provide pro bono legal services to small companies.[11]
The Corporation Counsel Section currently is examining how it can best help its members engage in pro bono services, including those directed at small and start-up businesses. New York always has been a leader in “the business of America,” and if NYSBA can do its part, and assist small businesses get off the ground with pro bono legal assistance, we can be a vibrant force and powerful tool of economic recovery and growth - who knows, we might even have a part in creating the next Microsoft, Google or Amazon!
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[1] http://www.bea.gov/national/index.htm#gdp (current dollar and real GDP excel spreadsheet).
[2] https://www.sba.gov/content/small-business-gdp-update-2002-2010 (see full report.
[3] https://www.sba.gov/advocacy/frequently-asked-questions-about-small-business.
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] http://boss.blogs.nytimes.com/2011/01/05/top-10-reasons-small-businesses-fail/?_r=0
[8] http://www.forbes.com/sites/aileron/2014/07/02/top-10-legal-mistakes-small-businesses-make/#2ed8026615ce.
[9] https://www.probono.net/ny/nysba_oppsguide/.
[10] https://smallbiztrends.com/2015/02/low-cost-free-legal-advice-for-business.html.
[11] https://www.dcbar.org/for-the-public/help-for-small-businesses/.
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Reprinted with permission from the January 23, 2017 edition of the New York Law Journal © 2017 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.