September 1, 2010

Practicing Law in a Sharing Economy

This article was originally published on Shareable.net, in slightly abridged form.

What do you call a lawyer who helps people share, cooperate, barter, foster local economies, and build sustainable communities? That sounds like the beginning of a lawyer joke, but actually, it's the beginning of new field of law practice. Very soon, every community will need a specialist in this yet-to-be-named area: Community transactional law? Sustainable economies law? Cooperation law? Personally, I tend to call it sharing law.

 

The Evolving Nature of Our Transactions

Contrary to what we see on lawyer TV shows, around half of lawyers primarily work as transactional lawyers, not courtroom litigators. Transactional lawyers advise on, negotiate, and structure the contracts that govern business deals, real estate transfers, loans, mergers, securities, insurance, and so on.

The evolving nature of our transactions has created the need for a new area of law practice. We are entering an age of innovative transactions, collaborative transactions, crowd transactions, micro-transactions, sharing transactions - transactions that the legal field hasn't caught up with, like:

  • Bartering
  • Sharing
  • Cooperatives
  • Buying clubs
  • Community currencies
  • Time banks
  • Microlending
  • Crowdsourcing
  • Crowdfunding
  • Open source
  • Community supported agriculture
  • Fair trade
  • Cohousing
  • Coworking
  • Consensus decision-making
  • Intentional Communities
  • Community Gardens
  • Copyleft

  • Transactions that Put the Lively back into Livelihood

    What will the world look like as these kinds of transactions become more and more common, and what are the legal implications? Let's look at one person's life as an example: 

    Lynne lives in an urban cohousing community and shares ownership of a car with two neighbors. Every day, she fluidly shares, borrows, and lends (rather than owns) many household goods, tools, electronics, and other items. She is a member of a cooperative grocery, through which she receives significant discounts in exchange for putting in a few monthly work hours. She grows vegetables on an empty lot and sometimes sells the veggies to neighbors. She has a successful rooftop landscaping business, which she launched using 20 microloans and investments from friends and family. She often barters, doing odd jobs in exchange for goods and services. She also owns a 5% share of a hot springs retreat center outside of town, which she acquired through sweat equity.

    You might say that Lynne has put the "lively" back in livelihood. With the help of sharing, cooperation, and collaboration, she has managed to craft an affordable, comfortable lifestyle, put her skills to use, do varied and self-directed work, and live/work in a supportive community. She has "financed" property ownership and launched a thriving business off of the traditional financial and banking grid.[i]

    Now, if only Lynne knew how to report all this to the IRS, and how to explain it to her car insurance company, the Health Department, mortgage lenders, the Secretary of State, the Department of Real Estate, the city planning and building departments, the Department of Agriculture, the Department of Labor, the Securities and Exchange Commission, and all of the other regulatory and bureaucratic entities that have a say over what she can and can't do.

    And if only Lynne could feel fully assured that her rights to partial ownership in the cohousing community, retreat center, car, shared goods, and consumer cooperative would be honored by her co-sharers, or, in the event of an unresolveable dispute, honored by a court of law. If only she could find affordable ways to manage the risk of her activities, since her activities don't fit into traditional insurance application check-boxes. If only there weren't so many legal headaches involved in living well and creating more localized, sustainable economies....

     

    Lawyers Are Going to Have a Ball With This

    Trying to unravel the legal issues that arise from Lynne's lifestyle would be like trying to unravel a gigantic, messy, tangled up ball of string. Fortunately, thousands of people go to law school every year because they enjoy solving tangled messes. The emerging generation of lawyers is going to have a ball with this.

    At present, there is not much literature explaining the legal implications of these kinds of transactions. To those of us who have made this our area of practice, many of the legal questions in this new field sit unanswered on our giant to-do lists. One-by-one, client-by-client, we are making headway. As the ground swells with people adopting more sharing and cooperative work and lifestyles, we can look forward to a growing body of law and literature on the subject.

    At the same time, the answers will never be clear cut, and lines we have grown accustomed to will be increasingly blurred. Until we evolve a new set of legal definitions, we'll dance uncertainly around the lines between "income" and "gifts," between "own" and "rent," between "employees" and "volunteers," between "work" and "hobby," between "nonprofit" and "for-profit," between "invest" and "donate," and so on. Our clients may have outside-the-box livelihoods and organizations, but it'll still be the job of lawyers to help them fit into boxes that are traditional enough to comply with the law.

     

    A Collaborative World Calls for Collaborative Lawyers

    The growth of "community transactional law" or "sharing law" has implications not just for what lawyers practice, but how they practice - how they interact with clients, deliver services, determine fees, work with conflicts of interest, and so on. Working in this field will require not only the skills of legal analysis, but also the skills of open-mindedness, clear communication, collaboration, and an understanding of the role that human needs and emotions play in collaborative transactions.

    Collaboration between lawyer, client, and community is key. A lawyer brings legal knowledge, while a client brings practical knowledge, and the community provides the forum for the transactions. To the extent information is shared in all directions, thoughtful and innovative transactions will emerge. Lawyers typically don't freely share sample documents because charging for documents is a primary way that lawyers make money. Lawyers in this new field will need to develop new revenue models that encourage sharing of information. The free flow of information will ensure better informed clients, better quality documents, and communities that are empowered with an understanding of what is possible.

    Lawyers can also use sharing to make legal services more affordable, and therefore accessible, to clients. A lawyer sharing office space can keep overhead and fees far lower than a law firm built to look like the Emerald City. A lawyer open to receiving payment in time dollars or working in exchange for a bag of organic artichokes will make legal services accessible to a broader range of clients.

     

    Documents That Are Alive [And Even Make Sense]

    A large component of lawyers' work is drafting documents, like contracts and agreements about how organizations will function. In a world where people form babysitting co-ops, community gardens, open source creative projects, and other decentralized, participatory, fluid, and adaptable group projects, documents clearly describing these arrangements will be indispensible. That is, if people can understand them. In a typical lawyer-client transaction, the lawyer might prepare a document that the client looks at, often reluctantly and quickly. The document is then put into a file cabinet, never to be seen again (unless someone sues someone, in which case everyone hires more lawyers to interpret the appallingly long and confusing paragraphs).

    Documents should be living tools for a sharing organization. A readable governing document will: 1) help the group come to a well-thought-out plan, 2) serve as a handy reference for participants and encourage consistency in operations, 3) enable new people to join and get up to speed with the program, 4) promote group harmony by ensuring that everyone is on the same page, and 5) support other, similar programs, by making it easy for others to model a new program using the first one's governing document.

     

    Lawyers Become Facilitators

    In a more sharing world, attorneys might more frequently represent groups of people, rather than just individuals and business entities. In these situations, an attorney might simultaneously play a role as a lawyer and a facilitator.

    This deviates, to some extent, from traditional models of practice. For example, if three unrelated people decide to purchase a house together, and approach an attorney to draft their shared ownership agreement, the attorney might insist that each party will need his or her own attorney. Simultaneously representing multiple parties to the same transaction can put an attorney at risk of violating ethical rules, because the parties' interests could come into conflict with each other. Furthermore, joint representation means that each individual client will not have his or her own zealous advocate. (In case you wondered, "zealous," is a word right out of lawyers' rules of professional conduct.)

    Zeal, however, may not be the most important thing clients are looking for in a sharing lawyer. Perhaps they want one attorney who can learn about everyone's needs, help explain the benefits and risks for each person, mediate any conflicts that do arise, explain the legal framework, and then guide the group in developing a plan that works for everyone. Often, facilitating the growth of an open and trusting relationship among parties will be far more important than lobbying for favorable contract terms for a single party.

    At the same time, when the stakes are high, giving attention to individual interests will be essential. To this end, sharing law has much to learn from "Collaborative Law," which has been applied primarily to divorce cases, and sometimes to the preparation of prenuptial agreements. In the collaborative model, each party is represented by an attorney, and thus has an advocate helping to assert that party's interests. Typically, however, the attorneys are also trained mediators, and the parties come to the negotiating table in an open and cooperative spirit. In the same way that the collaborative approach has been used in negotiating prenuptial agreements, it could be applied also to co-ownership agreements, partnership agreements, and other situations where parties must balance concern for their own interests with the desire to come together and collaborate.

     

    Lawyers Can Also Create More Square Holes

    Trying to legally categorize cutting edge transactions will sometimes be like trying to fit a square peg in a round hole. As such, lawyers working in this field will be in a good position to call for more square holes in our legal system. In other words, innovation and policy reform will also play a key role in the work of community transactional lawyers.

    In the course of their work, sharing lawyers will recognize how a state law or local zoning ordinance could be improved to encourage sharing, to incentivize urban agriculture, or to enable new forms of co-ownership. Lawyers can also be proactive architects of new kinds of organizations, new legal structures for sharing, and mechanisms for protecting the commons. In this same vein, for example, Creative Commons has already created a new licensing structure for the sharing of ideas and creative works.

     

    Greasing the Wheels of a More Sharing World

    In small pockets around the country, lawyers are beginning this work. Recently, Oakland-based attorney Jenny Kassan and I co-founded the Sustainable Economies Law Center, an organization that creates a space for this new field to develop, generates tools and resources for the public, and provides learning opportunities for law students.

    With any luck, law schools will start offering classes and clinics focused on these cutting-edge transactions. Soon, a new generation of "sharing lawyers" or "community transactional lawyers" will be able to enjoy rewarding work, interesting clients, and a field of practice that deviates, refreshingly, from the usual big-firm and government career paths.

    Years ago, I read a cynical article complaining that lawyers do nothing more than "grease the wheels of big business." It's unfortunate to the extent that it has been true, but I liked the phrase and I think we should simply roll it in a new direction. Now, our work is to grease the wheels of a more sharing, cooperative, and sustainable society.

     

    This article was written with input from attorneys Jenny Kassan and Emily Doskow.



    [i] Thank you to Morgan Gerard for using - and possibly coining - the phrase "living off the traditional financial services grid."

    September 1, 2010

    Money Soup! Part 1 of 3 of Janelle's legal guide to barter and gift economies

    Read it on Shareable.net: How to Barter Give and Get Stuff: Attorney Janelle Orsi Explains the Legal Nuts and Bolts of a Sharing Economy 

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    August 30, 2010

    Sharing Solution Featured on WalletPop

    An article about sharing with neighbors on the personal finance site WalletPop features Janelle Orsi talking about the many ways to share in your neighborhood, and how to develop good sharing relationships. The article also features stories about neighbors sharing home improvement tasks and even Wi-Fi signals. 
    August 16, 2010

    The Sustainable Economies Law Center Wants to Help You Share

    The Sustainable Economies Law Center was recently featured in the East Bay Express, including an interview by Bernice Yeung with Janelle Orsi.

    The Sustainable Economies Law Center (SELC) facilitates the growth of sustainable, localized, and just economies, through legal research, professional training, resource development, and education about practices such as:

    · Cooperatives
    · Community-supported enterprises
    · Barter
    · Sharing
    · Local currencies
    · Intentional communities, ecovillages, cohousing
    · Affordable housing and limited equity housing
    · Urban agriculture
    · Community-based renewable energy
    · Community land trusts
    · Social enterprise
    · Microlending
    · Local investing
    · Co-op banks/credit unions

    In addition to creating and making available resources to the public, SELC provides training to legal professionals, student interns, and others, empowering them with tools to bring about more sustainable, localized, and just economies.  SELC also convenes special working groups, bringing together experts and practitioners from various fields, for the purpose of investigating, collecting resources for, and developing resources in specialized areas.

    Based in Oakland, California, SELC is a fiscally sponsored project of Community Ventures, a California 501(c)3 nonprofit organization. All SELC projects are currently managed by volunteer attorneys.

    August 8, 2010

    New Book on Collaborative Consumption

    This is great - a new book about the sharing movement will be released in just a few weeks: What's Mine is Yours: The Rise of Collaborative Consumption. Check out their website, including a couple cool videos!

    August 1, 2010

    When the Sharing Hits the Fan

    Read Emily's article on Shareable.net: When the Sharing Hits the Fan

    www_flickr_comphotoslaenulfean.jpg

    May 10, 2010

    Peer-to-Peer Car-Sharing On Its Way

    Car-sharing happens on many levels. Your friend borrows your car for a day; you and your neighbor agree to share equal ownership and use of one car; you and five neighbors and friends share ownership of a pickup truck; you use ZipCar when you need to go the grocery store.

    Soon, you may be able to share your personal vehicle or use vehicles belonging to your neighbors, using technology similar to that used by rental and car-sharing systems. It's called peer-to-peer car-sharing and it's catching on in the United States and abroad. In California, a peer-to-peer car-sharing bill has passed out of committee and is headed to the Assembly floor in May. A new site called RelayRides is launching person-to-person car-sharing in the Baltimore and Boston areas. And in the UK, WhipCar says peer-to-peer rentals area available across the country.
     
    February 3, 2010

    Trend Toward Car-Sharing Expected to Continue

    Research firm Frost & Sullivan just issued a new report that says car-sharing is on the rise and expected to grow exponentially over the next five years. Between 2007 and 2009, the number of drivers using car-sharing networks increased 117% in North America. That number is expected to triple in the next five years, to a total of about 4.4 million individual users.

    My favorite number in all these statistics: every shared vehicle replaces 15 individually owned vehicles. Another cool number: An average ZipCar user can save up to $435 per month by driving shared vehicles.

    The numbers don't lie! Car-sharing is here to stay.
    January 28, 2010

    Renting as Sharing

    An article in the Boston Globe discusses the growth of new websites like Rentalic, which helps bring together owners and people who need their stuff--renters--to reduce consumption and increase sharing. Janelle Orsi and The Sharing Solution get a mention toward the end of the article, but read all the way through--it's a great outline of what's going on in the world of rent-to-share.
    January 6, 2010

    New App for Cab Sharing Could Help Travelers Share and Save

    An article in today's Seattle Times about cab-sharing from Seattle-Tacoma Airport got me wondering why more cities don't facilitate this money-saving and ecologically sound form of transportation. The article features a new application for the iPhone called ridepenguin.com--a free service that would allow travelers at Sea-Tac to enter a destination and connect with other arriving travelers going to a similar destination, so that the travelers could share a cab from the airport. The app was developed by two Seattle residents who would like to expand to other airports.

    Something I thought was cool is that the concept has met with no resistance from the taxi company with exclusive rights to service Sea-Tac, whose representatives said "If people want to be creative and save money and be more green, we're absolutely OK with that."

    The New York City Taxi and Limousine Commission is on board with taxi-sharing, too. In July of last year the "Commissioner's Corner" column addressed the different ways the Taxi and Limousine Commission was supporting taxi-sharing, including pilot programs to develop multi-fare meters, support group riding at reduced rates from taxi stands at points on busy corridors, and place "livery stands" at places like shopping centers.

    In U.S. cities, where taxis usually supplement public transportation systems, cab-sharing is a great way for consumers to save money while, in many cases, generating additional revenue for the cab driver. In other parts of the world, taxis actually are public transportation. When I was in Amman, Jordan last year, we went everywhere by cab--there is no public transportation, and taxis are super cheap and always available. And according to Wikipedia, dozens of other countries use taxis as the main form of transportation, calling the service everything from "multi-hire taxi" to "taxibus."   
    December 28, 2009

    Nanny-Sharing: Finding the Right Fit Can Be Challenging

    An interesting article in a recent Wall Street Journal describes the author's struggle to find an appropriate nanny-sharing setup for her infant daughter. The challenge is twofold: first, finding a family to share with, and then finding just the right nanny to care for your child.

    It's probably best to face the two challenges in the order listed, so that you and the other sharers can hire the nanny together and be sure everyone is fully on board with that crucial choice. There are a lot of issues to negotiate in setting up the sharing arrangement, too--hours, transportation, what the children are to be fed, what types of activities you want them to be engaged in, and how you'll share costs and deal with taxes. All of these questions are resolvable, especially if you talk about them in advance--as with most sharing agreements, communication is key here.

    Sharing child care has a ton of advantages. It saves money for everyone, conserves resources, and provides children with opportunities to socialize with others in a home environment. Challenging as it may be to find the right setup, once you do it's likely to benefit your family in the short and long term. 
    December 23, 2009

    Seattle Times Grapples with the Stickiness of Sharing

    The Seattle Times' Pacific Northwest Magazine just featured a great article about sharing.  Something I love about the article is that writer Carol Ostrom seemed to search far and wide for examples of the most difficult sharing arrangements, and she grappled with some of our biggest fears about sharing. In fact, she interviewed me at great length about my own most challenging sharing experiences, and probed to learn about how they were resolved. As she puts it, most people's biggest fear around sharing relates to "c-c-conflicts." 

    And I'm glad she chose to focus right in on this, because skeptical readers might otherwise roll their eyes an article that extols the virtues of sharing, without addressing the barriers.  This is especially important, because she didn't just write about simple sharing arrangements, such as lawnmower sharing.  She actually gave examples of what we might call EXTREME SHARING, including a moving example of organ sharing (donating a kidney to a stranger).  She even touches on the sharing of lovers among members of a commune (noting, however, that the commune members found that possessiveness and jealousies eventually got in the way of sharing everything). Very interesting stuff!
    December 9, 2009

    The Return of the Holiday Party: How Sharing Makes it Happen

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    Yup, it's that time of year again--holiday time. But it's also recession time, and businesses are spending less--and an easy place to cut costs is to reduce the costs of company events. One of the casualties of the recession has been the traditional company holiday party--but sharing is helping the tradition make a comeback. According to the New York Times, smaller companies can present parties on a budget by sharing the costs of venue and food with other companies. For example, a Philadelphia catering company offers Snow Balls, described as "all-inclusive, shared corporate holiday parties," as the solution to the difficulties of entertaining during the recession. A New Jersey hotel is offering similar options. The benefits extend beyond giving the employees an event to go to--organizers point out that the companies and their employees have the opportunity to network with the other businesses sharing the venue. Certainly, connecting with others is one of our favorite benefits of sharing, at holiday time and throughout the year. 

    November 24, 2009

    Chicken and Cow Strike Again

    In the last few days, Shareable.net posted not one, but TWO great articles related to chicken and cow sharing, entitled How to Share a Cow and How to Share a Chicken (or Two). There's just something about chickens and cows that mooooves people to come together, build community, start co-ops, raise animals together, and share food. This won't be the first time I've pointed out that chickens are leading the sharing revolution. They are very organized about it, too, as you can see:
    cow and chicken.jpg
    Actually, this is a sharing art installation by Emily Doskow and Luan Stauss, meant to draw the curiosity of and start conversations with the herds/flocks of passers by at our San Francisco Green Festival booth last weekend.  Oddly, during the course of the weekend, not one, but TWO of the cows disappeared. Now who in their right conscience would steal from a booth about sharing?  (The chickens have been brooding about it ever since.) Whoever you are cow-nappers, just know you got a special cow on your hands and she fully expects to be shared.
    November 23, 2009

    A Big List of Sharing Ideas from Green Fest

    Here's yet another list of sharing ideas!  We collected these ideas on post-it notes from visitors to our booth at the San Francisco Green Festival. We asked people to tell us their ideas for sharing and ways to create more sharing communities. We aren't totally clear on what all the ideas mean, but we figure that no ideas should be left behind. Here's they are:
    • Book swaps
    • Goat sharing for lawn mowing and clearing of brush
    • Sewing collectivestuff.jpg
    • Share a vegetable box
    • Art days
    • Share farm equipment, wood chippers, and snow blowers
    • Sing more
    • Work lunch co-op
    • Have "Soup Night" - a weekly event: invite friends, share poetry and music, and eat soup!
    • Wellness attention
    • Massage cooking
    • Neighborhood home improvement groups
    • Share ideas and eco-ideas
    • Energy raising (neighbors doing energy-saving retrofits for each other)
    • Water raising (neighbors building rain catchment barrels and grey water systems together)
    • Garden raising
    • Frequent potlucks on our street
    • Dance together healthy! (Barefoot Boogie Dance Jam, Berkeley)
    • Gather to can tomatoes
    • Saying "hi!"
    • Chicken feed co-ops
    • Turn loneliness into community; turn consumerism into tool-sharing; turn foreclosure into shared housing
    • Start a neighborhood compost rotation
    • Sing together (you can't have harmony unless you share the song)
    • Share boundaries (land)
    • Share clothes
    • A shared metal workshop (there's on in Mountain View, CA)
    • Corner grocery store
    • Love
    • Neighborhood garden
    • Create/enforce, morals, values & traditions in our youth
    • Be a friendcars.jpg
    • Share artwork
    • Share garden produce
    • Clothes party suare
    • DIY classes
    • Share a household and all of its contents
    • Gather to make butter or soap
    • Shower together to save water
    • Poop together (your guess is as good as ours...maybe something to do with doing a community composting toilet project?)
    • Chicken sharing
    • Acceptance of others: supportive love ("I love you and there ain't a thing you can do about it.")
    • Automatic sharing
    • Of course, LOVE
    • Block parties
    • Jam sessions (make fruit preserves and music together)
    • "Sharing bags" - fill a bag with gifts, give it to someone, and then ask the person to fill it with other things and pass it on.
    • Meal sharing
    • Share a wood workshop (put everyone's tools in one place, use the space for your projects and/or gather to work on projects together). Check out the Sawdust Shop for an example of a community wood working space.
    • Stay soft and open
    • Cohousing
    • Coworking
    • Ecovillages
    • Eliminate zoning. It has done more harm than good.
    • Carpool
    • Not apart from, but a part of...
    • The power of conversation. See World Cafe.
    • Share a dog (I don't want one full-time)
    • Grow and share food locally
    • On Halloween: hand out info and/or non-boxed candy
    • Share office space