GermanySocial entrepreneurship

A German legal counsel initiative helps people to do what they love

Focus on what matters

Estimated reading time: 3 minutes, 30 seconds.

I am a true believer that doing what you love should matter the most and sets you up for success. Today, I went out for breakfast with a friend and she told me about her desire to support social projects sustainably. Somehow however she didn’t start yet committing to it. She explained that there are so many other topics and she already actively donates and joins social projects initiated by her company. Mostly what holds us back is our picture of us what we can and cannot do.

I am a true believer of that. Most of the roadblocks are in our mind. However, some real blockers stop us us from succeeding with social businesses… I have to admit. One of them is setting up a legal entity that we need to receive financial support most likely as an initial investment to get the social business started. Furthermore, we need a legal form so we are not liable ourselves for damages that happen during our social business activity.

Just get started

In 2017, a team of law students finally was eager to go from idea to action. One of them is Andy who just finished his law degree in 2019. “I just wanted to help social businesses to get started and learn something myself on the way.” Together with his team, he set up the initiative Start Right with support of the law firm Latham & Watkins. What I didn’t understand from the beginning is that they give real legal counsel. Even though they are students they can set up legally binding documents and empower social businesses to start working to solve real-world problems. All of that is possible because a new law in 2006 which allows law students to advise non-profit organizations with support from a law firm.

Andi and Max are part of Start Right a legal counsel for non-profits by law students.
Max and Andy are members of Start Right helping non-profits to get started.

How does it work?

As a team of over 40 students, they work on 10 projects with 2 to 3 students support one case. The support from law firms comes in the person of an associate that supports the team and supervises their work. Again I felt this is some marketing activity but that motion was straight away rejected, “they actually help us and guide us through our case with regular calls and a final review session”.

Setting up the legal framework can take weeks and months. Simple things such as giving free postcards to homeless people can turn out to be highly complex from a legal point of view. Can I give away things for free as part of my social business? Also, the question whether an organization is for-profit or non-profit has a crucial impact on success since a non-profit does not have to pay taxes in Germany which can be a huge relief building up a running social business. Funnily enough, as the international community expects, Germans are highly bureaucratic and base their decisions on facts. Having someone by your side who is experienced communicating with public entities can be a game-changer.

Legal advice is no consultancy

What can be tricky when supporting starting social businesses is the fact that they do not only need legal advice. Usually, early-stage initiatives have questions that go far beyond that. Do I want to do a for-profit business? Who is in charge of our initiative? What is the purpose of the social business? As a lawyer consulting early-stage organizations you require some sort of business understanding but your adice is purely legal . “We are not consultants, working with early stage organizations. However, we see a lot of necessity for consulting services around the creation of a business plan with a compelling vision. That is something we can’t help with.” However, helping to set up the legal foundation for a social business requires understanding of their intention. The line is thin.

Blurred lines between legal council and consultancy services made Start Right think how they can involve other organizations that can deliver on business plan support and further consultancy services. They work very closely with successful student consultancies that in reverse involve them when legal advice is required.

Focus is key

Also in my last article, I focused on an organization that supports social businesses to stay focused on what they are truly good at. That should be the priority for all of us in business, in private and everywhere. If we can focus on our strengths we can shine and be able to make others shine. There is quite some support to help us with the things we don’t understand we just have to find that support. Start Right is a professional and caring group of people that want you to be successful. Take advantage of that.

Finally, a big thank you to the commitment of the 3 major law firms Bird & Bird, Hengeler Mueller and Latham & Watkins for their continuous support of Start Right and the non-profits that benefit.

Start Right can only support social businesses in countries where German law is applicable.

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