Price of legal help for startups? Free
Thanks to the UW Law & Entrepreneurship Clinic, an average of 300 Wisconsin startups each year have access to free legal services that would otherwise burst their burgeoning budgets.
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One of the major roadblocks to success as a first-time business owner — especially if you’re a new entrepreneur embarking on a startup venture — is finding the business expertise and advice that’s necessary to fill in the gaps of your own education and experience.
Entrepreneurs may be experts in their unique product or service, but they’re often novices in accounting and cash flow, PR and marketing, human resources, and the day-to-day legalities of running a business.
Many young startups are often cash poor, too, so finding assistance with any of those services gratis is an uphill climb.
It’s what makes the University of Wisconsin Law & Entrepreneurship Clinic unique, though anyone outside of the startup community may never have heard of it.
The “L&E Clinic” assists an average of 300 startups each year throughout the state of Wisconsin by using second- and third-year law students to provide free legal services. The clinic works across all industries and with a diverse group of startup founders with three goals: to provide a challenging experience to the students, to provide quality legal work for clients, and to provide an economic benefit to the state of Wisconsin.
“The L&E Clinic provides a broad range of transactional legal services for startup businesses, but the bulk of our work is rooted in corporate formation and intellectual property,” explains Jeffrey Glazer, clinical assistant professor, for the clinic. “We help companies with founders, securities and/or fundraising issues, patents, trademarks, website contracts, leases, licenses, and employee agreements — basically anything that a startup business of any kind might need. The only thing we don’t handle is dispute resolution or litigation.”
The top three industries the clinic serves are IT (includes mobile apps and other software and hardware-based businesses, including health care IT), biotech, and food and beverage. About 10–15% of the clinic’s work is with nonprofits.
The clinic was formed in 2009 by Eric Englund and Anne Smith. Englund was asked by Ken Davis, the UW Law School dean at the time, to think about what a business/entrepreneurship clinic might look like, says Glazer. “Eric brought in Anne Smith, who had been general counsel for Promega, and spoke with WARF’s then-managing director, Carl Gulbrandsen, who promised funding for this nascent clinic. It quickly became apparent that the clinic was filling a large gap in private legal services.”
For the past two years, the clinic has served over 300 clients per year, billing over $1 million worth of free legal services per year just in student time, which is estimated at $150 per hour. Since its foundation, the clinic has served well over 1,000 businesses throughout the state.
If not for the L&E Clinic, Glazer states people looking for low-cost legal help would have little choice with only a handful of options. “Essentially, startups could 1) use their own personal network to find a lawyer capable of doing the work; 2) use the Wisconsin Bar’s Lawyer Referral Service; or 3) self-lawyer. Unfortunately, none of these are particularly great options for the large number of companies that clearly need the help.”
Of course, just because the legal services offered by the clinic are free doesn’t mean there’s no cost to the work the student attorneys are doing.
Glazer notes all work at the clinic is provided free of charge to the client, except for filing fees. In turn, the clinic receives “lights-on funding” from the university, although a significant amount of its funding comes from the Wisconsin Alumni Research Foundation (WARF), and a mix of private donors who believe in the clinic’s mission and grant funding from a variety of sources, including the Wisconsin Economic Development Corp. (WEDC).
“Approximately 50% of the work we do is affiliated with the University of Wisconsin, while the other 50% is from clients in cities and towns throughout the state,” notes Glazer. “More specifically, about 40% of our work is with clients here in Dane County, and the remainder is spread throughout the state. For example, last year we served clients in 32 counties.”
Many of the clinic’s current and former clients have been winners and nominees for this year’s Wisconsin Innovation Awards or the Governor’s Business Plan Competition, as well as participants in gener8tor and other national accelerator programs. The L&E Clinic itself was one of 10 Wisconsin Innovation Award winners earlier this month for the work it does on behalf of startup businesses around the state.
Past clients of the clinic include EatStreet, the JJ Watt Foundation, and Mobcraft. One current client is Aha Notes, a new Madison startup. Co-founder Scott Rouse says he’s received help from the L&E Clinic on his young business’ provisional patents, operating agreement, and IP agreements. “The UWLEC has been a huge help and I couldn’t say enough positive things about them, and (co-founder) Anne Smith in particular.”