Playing To Our Strengths: Pro Bono For Business Lawyers At Goodwin Procter

Friday, August 1, 2008 - 01:00

It is not every day that business lawyers can undertake pro bono work in their "sweet spot."Goodwin Procter's Pro Bono Committee seeks to provide pro bono opportunities that appeal to a broad range of lawyers. Historically while there have been many natural opportunities for litigators to engage in pro bono work that is compatible with their practices, only recently have more opportunities arisen for business lawyers to engage in pro bono work that leverages their special expertise. Lawyers working in Goodwin Procter's Business Law department have had the privilege to use their broad-based skills and knowledge to help create economic growth in disadvantaged communities. The business law attorneys enjoy performing pro bono work in their specialty and appreciate the ability to leverage their unique expertise to generate economic opportunity and security to underserved communities on a local and international level.

In 2007, Goodwin Procter helped establish CheckSpring Bank, a community development bank founded in the South Bronx, New York - the first bank founded in the Bronx in over 25 years. This financial institution has made a strong commitment to the community by supporting its founders' vision to start a bank that would improve access to checking, savings and lending products for check cashing customers, and thereby encouraging economic development for low-to-moderate income consumers and business owners.

Goodwin Procter became involved with CheckSpring Bank in 2004, when the founders were preparing to apply for a New York State commercial bank charter and needed the expertise and guidance of a law firm to help them navigate the regulatory process - a firm that would be a strong fit with their nuanced business plan and extremely limited budget.A CheckSpring board member, an in-house regulatory attorney for a financial services firm, introduced the founders to Greg Lyons, chair of Goodwin Procter's Financial Services Group and Banking Practice.Lyons was interested in CheckSpring's community development focus and the regulatory challenges that their business plan posed.

The bank faced numerous challenges, ranging from regulatory hurdles and fundraising difficulties, but with Goodwin Procter's expertise, CheckSpring was able to successfully obtain a charter.Not only did Goodwin Procter shepherd CheckSpring through the prolonged and complicated application processes with the New York State Banking Department, FDIC and FRB, but the firm played a critical role in advising the bank on numerous related matters, included capital offerings, human resources and compensation plans.Goodwin Procter quickly acted like CheckSpring's partner, providing an underlying source of strength that enabled the bank to succeed against seemingly insurmountable odds.

Several Goodwin Procter partners and associates worked with CheckSpring.What started out as a limited engagement rapidly grew into a much larger, more involved and lengthier undertaking.CheckSpring succeeded in obtaining the required approvals to open in early 2006.Under New York State banking law, however, CheckSpring had five months in which to raise $17 million in capital.Though the bank came close to securing the required capital, it was unable to close the full amount and their regulatory approvals expired, setting it back to square one.However, the firm continued its support as CheckSpring resuscitated the project and the regulatory approvals were secured for the second time.Ultimately the bank opened in November 2007.

"Attending CheckSpring Bank's opening celebration in the Bronx is a moment that stands out in my mind," said William E. Stern, Goodwin Procter Financial Services partner."I had been convinced all along that CheckSpring's mission of bringing banking services to a critically underserved neighborhood was a worthy one, but I did not fully understand the bank's importance until hearing from city officials and local business leaders at the bank's opening how grateful they were that CheckSpring's founders were prepared to invest in their community."

When the matter was completed, 65 Goodwin Procter attorneys and paralegals from the firm's Boston, New York and Washington, DC offices had devoted in excess of 2,800 hours of legal services.The CheckSpring team handled virtually all the legal aspects of the bank's formation.

In another instance, Goodwin Procter assisted MicroCredit Enterprises, a nonprofit organization which leverages private capital and guarantees as security for loans to overseas microfinance institutions which, in turn, provide loans to poor entrepreneurs.MicroCredit Enterprises employs this innovative approach to help the poor help themselves.

According to MicroCredit Enterprises, "Because poor entrepreneurs do not have collateral or credit histories, the MicroCredit Enterprises model takes advantage of economic guarantees in the developed world to provide capital to overseas shop owners, farmers, craftspeople, weavers and others to start and expand their small enterprises. Each million dollar guarantee approximates up to 5,000 microcredit business loans, feeding as many as 25,000 people in the developing world. As of February 2008, MicroCredit Enterprises has signed on 35 guarantors securing $35 million.In turn, it has issued 26 loans to microfinance institutions totaling $12.3 million."

When Goodwin Procter became involved with MicroCredit Enterprises, not a single legal document had been formulated.John Ferguson, a Goodwin Procter partner, was the pioneering attorney as well as a trusted advisor, confidante and committed ally.Early in the engagement when MicroCredit Enterprises was negotiating its first breakthrough financing agreement with a major foundation, the workload for the small staff was overwhelming.Ferguson took on the responsibility for negotiating the deal terms, advising MicroCredit Entrerpises' CEO, and crafting and drafting all the necessary legal documents, including the core organizational agreements.Today, MicroCredit Enterprises has facilitated over 58,000 microloans in 13 countries, impacting over 230,000 poor people. The average loan is $542, though some individual loans are as tiny as $37.

"Our relationship with MicroCredit Enterprises began over three years ago when its founder, Jonathan Lewis, came to us with a seemingly simple idea, boundless energy and enthusiasm, and a desire to build a scalable model to help others," recalled Ferguson."Collaborating with Jonathan, we were able to draw on our experience across disciplines - fund formation, corporate and lending transactions and securities - to help build and document a scalable and relatively self-operative model which leverages off the program participants to fund the making of microloans, and to negotiate, document and close the inaugural loan in the program.This afforded Goodwin Procter with the opportunity to apply our transactional skills to a project that continues to yield dividends to date."

"While we naturally take pride in our pro bono work, we recognize that the accomplishments are very much those of our clients and we are honored by our association with them," said Regina M. Pisa, Chairman and Managing Partner of Goodwin Procter."We are indeed grateful for their daily contributions to our firm's spirit and attitude, and we look forward to continuing our efforts to help them (and thus us) make a difference. It is this work - pro bono work - that exemplifies our commitment to giving back to the communities in which we work and live."

By collaborating with organizations like CheckSpring and MicroCredit Enterprises, Goodwin Procter business lawyers have opportunities to perform sophisticated and challenging legal work that provides significant benefits to people in need, while applying the same skills they use in their day to day practice.

William P. Mayer and Thomas J. Mikula are co-chairs of Goodwin Procter's Pro Bono Program. Mr. Mayer is a Financial Services Partner in Goodwin Procter's Boston office. Mr. Mikula is a Litigation Partner in the firm's Washington, DC office.

Please email the authors at wmayer@goodwinprocter.com or tmikula@goodwinprocter.com with questions about this article.