Professor Brian Krumm has directed the College of Law’s business clinic for more than five years. In this interview, Professor Krumm explains the role the clinic plays in serving both small businesses and the student attorneys who represent them.
Q: Can you describe what the business clinic is all about?
A: We focus primarily on transactional work with either students or professors who are trying to commercialize their intellectual property that they’ve developed on campus, or people in the community who are starting a small business and need assistance with entity formation, employment contracts, web page disclosure agreements and things of that nature. But basically, the full range of transactional type issues that small businesses would run into during the course of their lifespan.
Q: Whom do you serve?
A: Most if not all of our clients are businesses that don’t have any income right now. We’re not trying to compete with local lawyers. We’re trying to provide a service for the university, for students, and for the Knox County community to assist small businesses in becoming self-sufficient.
Q: How many students work in your clinic?
A; Anywhere from eight to 12 a semester; all 3Ls.
Q; And how many faculty?
A: Two. We just hired Eric Franklin Aramante who started with us this summer and he’s going to work in non-profit. In a separate but related area, we have Barbara Johnson who works with our wills clinic.
Q: Is there a charge for the actual consulting?
A: No. They pay only their filing fees. And each semester we serve between 30 and 45 clients.
Q: What is your role as the director?
A: First of all, I’ve got to find substantive work for my students. I work with the Knoxville Chamber of Commerce, they have a business incubator down there. I generally go to some Shark Tank type competitions and talk to the participants to see where they are. I work with a lot of the departments at UT, especially the Anderson Center for Entrepreneurship and Innovation, very closely because they all send the people who are developing new ideas. The second thing I do is I have classroom time where I go through: how to choose a proper business entity; how to define intellectual property; how to handle the issues you might confront when interviewing clients; how do you file a trademark; how do you file a copyright; that sort of information.
Q: What is your favorite part about working with the clinic and the students?
A: It is good to see how much the students enjoy learning. A good example, we were working with Solex Corp., a group of researchers over at the medical school, and basically, they were developing a radio tracer that binds with amyloid proteins and allows you to get better imaging. Amyloid proteins are associated with Alzheimer’s disease, certain cancers and certain inflammatory diseases. So, you can actually get a better picture as these radio tracers bind with amyloid proteins. Well the students fessed up that they didn’t understand the technology, and the doctors fessed up that they didn’t understand all the legal issues that they were encountering. And you know to have students work with other disciplines and understand the value that they are adding to that process is really remarkable to see.
Q: It sounds like your clients are from all over the place, from sole proprietors to small operations.
A: Yes. With trademarks, we’ve even had international clients. We did a trademark in the United States with an Argentinian software company. But mostly, we look to take on clients that really can’t afford an attorney. Many times, there’s a reason a company or an individual might not have made that first step. If we didn’t help them form their companies, and do all these additional types of services, they might never get off the ground because they can’t afford the $8,000 to $10,000 risk of getting started.
Q: Do you ever represent clients in litigation?
A: Every once in a while, we will do some litigation. It gives students insight into how contracts are drafted and how they can be poorly drafted. One case that we worked on a year ago was for a minority-owned church that had a lease with an option to buy. After 15 years, the option day came up to buy, and they had fully performed. They had made their payments diligently every month. When it came to time to get the warranty deed, they didn’t file a notice that they wanted the option. And so, the owner who realized that he had been charging them simple interest as opposed to compound interest over those 15 years, wanted an additional $35,000 to consummate the agreement. So, we actually did file a Chancery court action, and rather than go to court we went to mediation. And in mediation the matter was settled by the church giving the landlord a $35,000 tax deduction in a settlement agreement.
Q: Can you take us through the process from initial contact with the client through completion of their case?
A: Let’s say somebody contacts me and says ‘I’m a new small business and I need to form a corporation,’ or it’s a trademark. I will email them an intake form. They supply contact information about the business and information such as their business plan and what they want the clinic to do. We’ll start a file, and we’ll interview the client. If it looks like we can do work for them, we have them sign an engagement agreement which defines what we’re going to do and what their responsibilities are as a client. The students interview the clients. They draft a memo outlining what we’re going to do and how much time it will take to get it done. And then we start working on the case. If the case takes longer than just a semester, the students will write a transfer memo explaining what has been done and what needs to be done the following semester so that the next class can pick up the file.
Q: How does this experience prepare students for what they’ll do after they graduate?
A: It’s interesting because some of the law firms that have taken my students say they come in a year or a year and a half ahead of other students. Our graduates have a comfort level with interviewing clients; they have an understanding of what you need to do to form a corporation. They’re not afraid to jump in to draft an agreement that they’ve never done before because they’ve already experienced that fear of failure.
Q: What other successes have you had for clients?
A: About four years ago, our work with I-Care was probably the biggest win we’ve had. Within 18 months we took a company from entity formation all the way through asset sale for $1.75 million. It was a small software company, a collaboration between the UT College of Nursing and the College of Engineering, with a health record management system that they created for use on campus. They realized later that other campuses could use that software. After doing initial beta testing, a larger company bought the software to expand to other universities.
Q: Is there anything else you want people to know about the business clinic?
A: What’s interesting is only about five percent of legal work involves going to trial anymore. But probably about 75 to 80 percent of the work is done in transactions. This sort of work doesn’t make for good television, so people aren’t really aware. But it’s really important. I think we’re really blessed with what we’ve got here, and I just want other people to know how blessed we are.
Story originally published in Tennessee Law, Summer 2017.