Two days after she opened her hair salon, Sahara Lannon took steps to ensure the new business would be around for years to come.
Lannon and her attorney, Laurie Hauber, went through the
salon’s operating agreement and discussed financial issues, such as the
tax ramifications of adding a partner.
“So much about this document is minimizing
misunderstandings,” Hauber said to her client over stacks of legal
papers last month at the Images of Change salon at 5942 Delmar
Hiring a lawyer can be expensive, but the meter wasn’t
running on this visit. Lannon is one of more than 35 clients who have
received free legal advice through an initiative launched last fall by
Legal Services of Eastern Missouri. The program aims to help low-income
entrepreneurs starting or expanding businesses and for nonprofits that
serve low-income individuals.
The initiative, called the Community Economic Development
program, is one of a few similar programs available through Legal
Services Corp., a Washington-based nonprofit that distributes federal
funding to 135 independent Legal Services programs nationwide.
Ken Harrington, managing director of the Skandalaris
Center for Entrepreneurial Studies at Washington University in St.
Louis, said nothing like Legal Services’ new program exists locally.
“This is a major, major gap that they’re going to fill,” he said.
Legal Services of Eastern Missouri has worked for decades
to provide “survival services,” said Daniel Glazier, the agency’s
executive director and general counsel.
From its office in St. Louis, the staff attorneys and
volunteers provide free legal help in civil cases to those who meet
income and other eligibility guidelines. Its recipients include tenants
fighting illegal evictions, battered spouses seeking orders of
protection and consumers who have been defrauded.
The new program is a way to go beyond basic needs and offer people a way to break out of poverty, Glazier said.
“These folks are going to hire other people in the community, in addition to bettering themselves,” he said.
In the case of Vitendo 4 Africa, a nonprofit based in
Hazelwood that helps immigrants from Africa, lawyers are helping the
nonprofit establish a micro-loan program.
Vitendo 4 Africa’s founder, Geoffrey Soyiantet, said
micro-lending will help immigrants who don’t have credit histories to
buy a car or other equipment to start a business.
The new initiative came to fruition despite the funding
challenges facing Legal Services. Legal Services Corp.’s federal funding
fell 14 percent to $348 million in fiscal 2012. As a result, Legal
Services of Eastern Missouri’s funding from Legal Services dropped 15
percent to $1.9 million in fiscal 2012.
Legal Services of Eastern Missouri had been looking for a
way to fund law advice for entrepreneurs and nonprofits for several
years, but the money couldn’t come at the expense of reducing basic
legal needs, Glazier said.
In 2010, Hauber began working as a volunteer with Legal
Services of Eastern Missouri after moving from Nashville, where she
taught at Vanderbilt Law School for five years.
After talking to local nonprofits about the
inaccessibility of legal services, she decided to create a program
similar to a one she started in Boston in 2001.
Hauber worked on securing funding sources, and by last
fall, the local Legal Services secured grants totaling more than
$130,000 from PNC Bank, U.S. Bank, Bank of America, the St. Louis County
Port Authority Community Reinvestment Fund, St. Louis Development
Corp., the Trio foundation and the Incarnate Word Foundation.
In October, she was hired to lead the new Community Economic Development program.
Hauber practiced corporate law in San Francisco early in
her career, but she says she felt pulled to using legal services as a
means to furthering economic development.
“These are people who don’t have access to capital or
professional networks,” Hauber said. “This is about leveling the playing
Several local law firms and in-house counsel at
Sigma-Aldrich and Emerson have stepped forward to volunteer with the new
effort. The law firms that have participated include Husch Blackwell;
Bryan Cave; Lewis, Rice & Fingersh; Ogletree, Deakins, Nash, Smoak
& Stewart; Greensfelder; Armstrong Teasdale; Gallop, Johnson &
Neuman, Thompson Coburn; and Steinberg & Steinberg.
The new service fills a crucial void in the region, according to the Skandalaris Center’s Harrington.
Washington University and St. Louis University’s law
schools have clinics for students to provide free legal help for
nonprofits and entrepreneurs under the direction of attorneys, but
they’re limited by what they can do, Harrington said.
For example, they can’t file incorporation documents for businesses, which is overlooked by some entrepreneurs getting started.
“It’s a relatively inexpensive thing, but if you don’t do it ... it can be devastating.”
Harrington said many small startups don’t anticipate
disputes between family members or business partners and overlook
completing legal documents that can avoid problems when disputes arise.
“Without that legal foundation established, the probability of failure goes way up,” he said.
For Lannon, the salon owner, opening Images of Change was
a lifetime dream for the 34-year-old, who cut and colored her friends’
and family members hair since she was a teenager. After working in
customer service, collections and as a stylist at a hair salon for more
than a decade, Lannon always wanted to open her own shop.
“I have three girls, and I wanted to show them you don’t have to work for someone else,” she said.
Last fall, Lannon saw an advertisement by a nonprofit,
the Grace Hill Settlement House, for a 10-week class on starting or
expanding a business through its women’s business center. The classes
are held at Washington University’s west campus in Clayton. During the
class, she found out about Legal Services’ new program.
Lannon, who opened the salon to customers in late
February, is hiring. Images of Salon currently has a staff of two, and
she is seeking to hire several stylists and a nail technician.
Without the legal help, Lannon said she’s doubtful Images of Change would exist.
“I have so many ideas,” she said. “But I have to have the right team. Without the right team, my dreams wouldn’t come true.”