Stanford Law School’s Small Business and Entrepreneurship Law Project

New pro bono effort led by Stanford Law students helps small business founders navigate complex and costly legal system

America’s small businesses have faced seismic hurdles during the pandemic. First they were hit with COVID-19 restrictions, followed by a bureaucratic labyrinth for government funding meant to keep them and their employees afloat—relief that proved too little, too late for an estimated 200,000 forced to close permanently.

“The pandemic introduced new challenges for small businesses and entrepreneurs, who needed our help more than ever before,” says Tyler McClure, JD ’22. At the start of the coronavirus pandemic, she volunteered to help small businesses and nonprofits apply for CARES Act loans. That experience was the spark for McClure to start the Small Business and Entrepreneurship Law Project this year, along with Justin Garfinkle, Guillaume Julian, and David Liou, all JD ’22. “I realized other Stanford Law students were also interested in volunteering with small businesses and entrepreneurs, and was fortunate to find a group who were interested in starting the project with me.”

McClure recognized that small business owners often face limited resources—even in the best of times. And legal fees can be prohibitive. Through the new pro bono project, Stanford Law students are helping under-resourced and underrepresented businesses and entrepreneurs to navigate complex legal questions—COVID-19-related and beyond.

Stanford Law School’s Small Business and Entrepreneurship Law Project
Stanford Law students Tyler McClure, Guillaume Julian, David Liou, and Justin Garfinkle

In its inaugural year, the project is also focused on diversity through a partnership with Start Small Think Big (SSTB), a nonprofit supporting under-resourced entrepreneurs who are people of color, women, members of other disadvantaged groups and/or low-income with business revenues under $1M. SLS volunteers, 20 students over the academic year, have been working alongside SSTB attorneys to draft contracts for small businesses and lead boot camps to help clients prepare for common negotiation scenarios.

The clients vary considerably—from a mother-daughter duo with an online pretzel business who hope to open a brick-and-mortar store to help revive their hometown’s commercial area, to a woman in New York with a plan to own rental units marketed toward low-income individuals. “She wants to get rid of predatory renting tactics and develop alternative plans for tenants who fall behind on their rent. Her situation reflects many of the clients we see in the negotiation bootcamps, who are looking to improve their skills and build confidence for their future negotiations,” explains Guillaume Julian, JD ’22.

“In our contract-drafting bootcamp, we are working closely with an enthusiastic entrepreneur who is opening a digital marketing business. She is using her years of corporate experience to help minority- and women-owned businesses reach new markets. She is so passionate about her work, and her enthusiasm has rubbed off on our whole team,” says Julian. “Above all, it’s so humbling to work with entrepreneurs who have terrific business ideas and who are designing their companies to give back to their communities.”

Many of the business owners are new to entrepreneurship and express concern that their lack of experience will be used against them as they negotiate contracts or develop relationships to get their businesses off the ground. And the cost of legal services is an ever-present barrier. “Many cannot afford the kinds of legal services that would help mitigate the risks that new businesses face. Our goal, as best we can, is to give them the tools necessary to feel confident and prepared in their decision-making,” says Justin Garfinkle, JD ’22.

Stanford Law School’s Small Business and Entrepreneurship Law Project 1
Stanford Law students Tyler McClure, Guillaume Julian, Justin Garfinkle, and David Liou

Among the most frequently posed questions is how to understand and limit the legal liability their business may face. “As an entrepreneur, it can be challenging to set the bounds of your relationship with initial clients. You are torn between wanting to go above and beyond while juggling all the responsibilities of starting a business,” Julian explains. “With a solid contract, our client will be empowered to deliver great work for her client while avoiding the scope-creep that is far too common in her field.”

Of course, COVID-19 has brought unprecedented challenges. The most obvious is uncertainty.

“One client was looking to get a lease for a retail store but was concerned about timing: Commercial real estate was at historic lows, but with impending lockdown restrictions, they could find themselves in a position of paying rent for an empty store that shoppers could not go to,” says Julian. “While there isn’t always a legal solution to these questions, we have often found that just listening to their concerns can help alleviate some of the stress associated with these decisions.”

“The recent downturn has shed light on the gross disparity in access to legal and financial advice available to small businesses and, in particular, those owned by women, minorities, and immigrants that face discrimination, structural barriers and limited knowledge of the resources essential to survival,” says David Liou, JD ’22. “Stanford Law has one of the country’s preeminent pro bono law programs, and the Levin Center was immediately supportive in our efforts to build a project focused directly on supporting the small businesses that form the economic lifeblood of our communities.”

But the pandemic has also offered unexpected business opportunities. “What was most striking to me was how many of the clients we worked with have started their business as a result of COVID,” says Julian. “Many were moved by the racial justice protests over the summer to empower themselves and their communities through entrepreneurship.”

McClure and the other founders of the project expect it to continue next year and beyond.

“As our communities emerge from COVID, small businesses run by under-resourced entrepreneurs will continue to need legal and business support for new challenges that arise,” says Julian. “We want to be there to help them, and look forward to continuing to expand the types of programs that we are able to offer.”