Hamilton Herald Masthead


Front Page - Friday, June 29, 2018

Small businesses get a helping hand for their uphill climb

Program gives legal help to startups on shoestring budget

Rock climber Savannah Manning has tamed cliffs that towered above her like giant beasts daring her to scale their heights. The 24-year-old Chattanooga resident not only lives and breathes her passion locally but has humbled some of the most challenging rock faces in the U.S., including those that hem the rugged mountains of Tuolumne Meadows near Yosemite National Park.

But when Manning tried to start a rock climbing business, she could barely get it off the ground.

Her idea was not the problem. After seeing teams of females climbing together at Tuolumne last August, Manning realized there’s a lack of women in Chattanooga partnering up on trips that require a high degree of skill.

She returned home wanting to help women climbers tackle tougher objectives. With thousands of vertical rock faces draped along a stretch of Appalachian Mountain Range and the Cumberland Plateau, the Chattanooga area has become a mecca for rock climbers, potentially giving Manning a steady flow of clients.

When Manning later ran into the founders of She Moves Mountains, an Oregon company that offers rock climbing clinics for women, at the Women’s Climbing Festival in Chattanooga, she told them about her experience in Tuolumne and her desire to help women climbers of all skills levels broaden their abilities.

“The idea is to empower women to pursue their own goals in climbing or whatever else with confidence and know-how,” she says.

After countless phone calls and a trip to Oregon, Manning and the founders of She Moves Mountains decided to open a Chattanooga-area location.

“The purpose of this business is not to exclude men but to give opportunities to women who otherwise would not have them,” she says.

Manning’s enthusiasm and determination were in ample supply. But there was a catch: Since Manning wanted to partner with a company in another state but remain a separate LLC, she faced several legal hurdles – and she didn’t have the knowledge she required to leap over them.

“I attempted to plug information into templates I had pulled off the internet but I was lost,” she says. “I was laying a shaky legal foundation that eventually would have caused a severe headache.”

Well-heeled startups can solve these issues with money and an attorney. But not Manning, who’s currently surviving on $300 a week.

“I attempted to set up a consultation with a small business lawyer, and the fee for one hour was $250,” she says. “I can barely afford to create my company much less pay that fee per hour to set up a contract with the other branch.”

Enter Legal Aid of East Tennessee, an unexpected source of help. Known for providing civil legal assistance to low income people, the firm’s mission statement actually declares that its purpose lies in “strengthening communities and changing lives through quality legal services.”

In other words, LAET does not have to limit itself to advocating for indigent people in sticky situations. Any legal service that empowers the community falls under the broader scope of the firm’s calling – even transactional work.

We Mean Business, a program launched at LAET in 2017, offers just that to certain underserved groups – namely women, minorities and veterans who are trying to start or develop a business but can’t afford to pay an attorney to create the legal underpinnings.

“These are people who are trying to enable themselves economically but are finding you need money to make money,” says Whitney Standifer, the business attorney at LAET who provides the services. “Part of that is being able to afford the proper advisors. We Mean Business takes down one of those hurdles.”

Standifer is a different kind of animal at LAET, which is staffed with lawyers who often spend their days in court advocating for clients. But her work as the firm’s only transactional attorney is as essential to LAET and the populations it serves as the lawyer who fights to stop a landlord from unlawfully booting a single mother out of her apartment.

“Part of the conversation about how We Mean Business fits into Legal Aid had to do with our mission, which is helping impoverished clients who end up in terrible situations,” she says. “We want to stop those things from happening by creating opportunities for people.”

Due to the complexity of the legal foundation that supports most businesses, an attorney is a necessary component of any commercial endeavor, Standifer says. But people who are not blessed with enough startup capital to cover the cost of a lawyer often try to navigate the legal minefield on their own. The results can be disastrous.

“You’re looking at a lot of liability if you’re not properly formed,” Standifer says. “If something goes wrong, your personal assets could be on the line.”

When Manning tried to press forward on her own by plugging information into the templates she had downloaded, she quickly realized she was alone in the dark without a light.

“Savannah was trying to use branding that’s not trademarked or copyrighted and create a separate LLC,” Standifer says. “That’s difficult to do. She needed an attorney.”

When Manning learned about WMB and met with Standifer for the first time, she was moved to tears.

“The amount of research Whitney had done and the amount of the information she provided without much prompting blew me away,” Manning says. “She made me realize how wrong I had been in trying to do everything myself. At some point, I would have run into a brick wall.”

Manning thought she was going to get an hour of Standifer’s time. The meeting lasted three hours.

“Whitney listened to every detail that crossed my mind and asked all the right questions,” Manning says.

As Standifer discussed what needed to be done to get Manning’s business off on the right foot, Manning’s eyes were opened to how much she had overlooked.

While Manning could have become overwhelmed, Standifer assured her that her load was actually going to become lighter because of one simple fact: she now had a business attorney.

“When I sit down with someone and start going through things, their eyes always widen when they hear how much needs to be done,” Standifer says. “But that’s always followed by a sense of relief. Those things are off their plate and on mine. They get to focus on their business.”

While WMB does not cover the fees required to establish a business (Manning still had to pay the fee to set up an LLC in Tennessee), Standifer’s work is free.

What’s more, there are no limits to the services Standifer provides. If a qualifying business needs an attorney to do something, she handles it.

“I do their formation, write their contracts, compose their operating agreements, review their contracts from other sources and look at their leases,” Standifer says. “It’s a lot of work, which is why needing an attorney can be cost prohibitive to your success.”

Standifer always congratulates her entrepreneurs on what they have accomplished on their own and then makes sure they understand how wise they were in seeking her help.

“Savannah is bringing an amazing set of skills to her business, but she’s also learning that owning a business requires a whole additional skillset,” she says. “She needs to make sure her business is in compliance with federal and state laws and that she’s shielded herself from liability. She also has to sign up for a smattering of business taxes.

“There’s simply no way for her to know if she’s done everything she needs to do,” Standifer says. “But I went to law school; I was trained to do this.”

In addition to providing a business attorney, WMB requires that entrepreneurs receive business counseling. This is provided through partnerships with local organizations such as LAUNCH Chattanooga and the Small Business Development Center.

Standifer referred Manning to someone at LAUNCH. She was thrilled to have more help. “I’m a bit of a procrastinator and take a lot of convincing to do something, but whatever Whitney recommends to me, I jump right to it,” Manning says. “I believe she always has my best interest in mind.”

Manning is not just grateful for the help she’s received; she feels like she’s dodged a bullet.

“Without this program, the foundation for my business would have consisted of documents and forms that were just plain wrong,” she says. “That would have come back to haunt me and perhaps been the downfall of my company.”

Program’s backstory

Small business owners aren’t the only ones who sometimes need an infusion of cash. While LAET provides free legal services through its staff and the outside attorneys who assist clients on a pro bono basis, it needs money to make this and its various programs happen.

The money for WMB trickled down to LAET from a unique source: the pool of money Bank of America paid as part of a settlement with the Department of Justice in 2014 to resolve federal and state claims against the company.

These claims were related to the bank’s practices concerning Residential Mortgage-Backed Securities, collateralized debt obligations and the underwriting and origination of mortgage loans.

Under the terms of the settlement, the bank agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by its misconduct.

The idea for WMB took shape after Sheri Fox became executive director of LAET in January 2016. While meeting with Chattanooga Mayor Andy Berke and members of his staff about what Legal Aid could do to help the city grow and prosper, James McKissick, head of Multicultural Affairs, told Fox that many small business owners throughout the community needed help with legal issues but could not afford an attorney.

A fan of small businesses, Fox decided to pilot WMB in Chattanooga – a city that hums with entrepreneurial spirit.

She applied for the Bank of America money based on two criteria: helping small business thrive would be good for the local economy, which in turn would prevent foreclosures and help to redevelop the community in the wake of the recent recession.

The Tennessee Bar Foundation, which administers the Bank of America money in the state, granted LAET just over $100,000 each for 2017 and 2018.

Once LAET had the money in hand, Fox asked Standifer, a Chattanooga native and Vermont Law School graduate, if she would like to develop and run the program.

Standifer was working as a financial advisor for Merrill Lynch when Fox offered her the job. She jumped at the opportunity.

“It was the perfect fit. I began my career working in bankruptcy court, where I had a couple clients who had lost everything because they had tried to start a business without the education and resources they needed to do it properly,” Standifer says. “That struck me as tragic. These people were trying to build something only for it to bite them out of the blue.”

Standifer saw WMB as an opportunity for her to marry her legal and financial skills and help cash-strapped business owners succeed rather than end up in misfortune and heartbreak.

She started putting together the program in January 2017 and began accepting clients about six months later.

Standifer currently has ten full-service clients, including six open businesses: 423 St. Francis, a clothing boutique on MLK; Peace Strength Yoga; Dee’Sign Nail Salon in Highway 58; Grand Finale Events & Décor; and Chattanooga Paddleboards.

Most of Standifer’s clients are women, with minority women leading the charge. WMB has one minority male on the books, as well.

However, no veterans have taken advantage of the full-service program and only a few have come to the seminars Standifer teaches, perhaps due to a lack of information in the appropriate circles. Standifer plans to rectify this by reaching out to the local organizations that serve veterans.

In addition, 32 companies have attended a WMB seminar, during which Standifer teaches business basics.

“They don’t leave experts on business law but they know which questions they should be asking,” she says.

Standifer adds that any company or organization can approach her about hosting a seminar.

Standifer wants other law firms and solo practitioners to understand that WMB is not taking money out of their pockets.

To make sure the program isn’t competing with the local bar, Standifer consults with a WMB steering committee made up of local attorneys, including Richard Faulkner, Jr., Ted Raynor and John McGehee from Baker Donelson and J. Nelson Irvine from Chambliss Bahner.

“Our clients are not people who would have come to you,” Standifer explains. “They could not have paid your bill.”

The goal of WMB, however, is to help clients succeed and reach a point where they can graduate from the program and begin paying a business attorney for his or her services.

“Being able to afford your own attorney is a huge milestone for your business,” Standifer says.

Fox says she hopes WMB has a long and fruitful future in Chattanooga, although that will depend on continually securing new funding to keep the program solvent.

Likewise, Standifer is looking forward to many years of giving qualifying women, minority and veteran business owners the knowledge, confidence and help they need to move forward and create something that will benefit themselves, their families and their community.

Manning has a lot of mountain left to climb before she’s at that point. (She’s currently hosting a fundraiser for She Moves Mountains East Coast on Indiegogo.)

But she says she’ll get there. For now, she’s simply enjoying the peace of mind that comes with having a business attorney.

“It’s a relief to be able to say, ‘Let me ask my attorney and I’ll get back to you,’ knowing Whitney will have the answer,” she says. “I’m not alone in the dark anymore. Someone I trust has my back.”