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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."

    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."   
    October 5, 2009

    This Sustainability Movement is Brought to You by the Letter C

    As writers, we are taught to "always avoid all awkward alliteration" and I find myself constantly worried that the letter "C" appears conspicuously, consecutively, and continuously in my sentences - community, cooperation, connection, common, (c what I mean?)

    But the other day, I had tea with writer Jennifer Fosket who has co-opted the C phenomenon and created "The Ten Cs of Social Sustainability." In her book, Living Green: Communities that Sustain, she and co-author Laura Mamo, both sociologists, look in depth at ecovillages, cohousing, affordable housing communities, and even single-family housing neighborhoods around the country and explore how those communities have made sustainability a way of life.
    livinggreen.jpgThe questions they ask go far deeper than questions about how to recycle, use green energy, etc. They ask: What motivates people to change their lifestyles? What factors affect the choices people make in their homes?  How does the built environment affect the way people live? In what ways do people connect with each other and how does this contribute to the strength of the community? What helps communities to endure through time?

    In many ways, these are the most crucial, yet most challenging questions to explore in building a more sustainable world. The Ten Cs of Sustainability came out of Fosket's and Mamo's observations in the communities they visited, and begin to answer the question of what makes a sustainable community successful.  The Ten Cs are practices and considerations that could apply in any development or community.  They include:
    • Culture
    • Context
    • Citizenship
    • Commitment
    • Collaboration
    • Connectedness
    • Care
    • Contact
    • Commons
    • Continuity
    Anyone who is currently working to build community around living sustainably could benefit from reading Fosket's and Mamo's book. The communities described in each chapter provide inspiring examples, and the Ten C's are a great framework around which to structure discussions about what it means to build community, connect with one another, collaborate in designing the community, and commit to long-term sustainably.
    October 2, 2009

    Shareable Has Launched! Please Spread the News!

    This is a huge boost for the sharing revolution: Shareable.net has launched!  Shareable is a new online magazine, a breeding ground for sharing ideas, and a space to develop our visions for an innovative, sharing, and sustainable world.  Please visit, spread the word, follow Shareable on Facebook, and let Shareable know your feedback!
    shareable.jpg
    I wrote a piece for Shareable entitled The Four Degrees of Sharing, which I see as a sharing manifesto of sorts.  I give examples of the ways people are taking sharing to new levels, creating new organizations around sharing, establishing community-wide sharing programs, and cooperating in new and amazing ways.  Emily Doskow and I will regularly contribute articles and a Q&A column. If you have any sharing questions, please send them to us!

    Shareable is sponsored by non-profit Tides Center.  The publisher, Neal Gorenflo, and editor, Jeremy Adam Smith, are social entrepreneurs and visionaries. They have created an amazing space to grow the sharing revolution!

    September 30, 2009

    Social Sustainability Blog Reviews The Sharing Solution

    Really nice shout-out for The Sharing Solution yesterday on "Social Sustainability: Musings on the Social Side of Sustainability." Thanks Jennifer! And look for a more to come on this blog about Living Green: Communities that Sustain, by Jennifer Fosket and Laura Mamo. 
    August 3, 2009

    Bike-Sharing Comes to San Francisco--Temporarily

    Over the past weekend, shared bicycles were available in San Francisco's beautiful Golden Gate Park. A state-of-the-art pay station spent five hours in the park on Sunday, allowing riders to swipe a credit card or use a prepaid pass to take one of the bikes out for a spin.

    Users loved it, and city employees, including Mayor Gavin Newsom, are enthusiastic, but it was only a one-day thing. Mayor Newsom's plan to start a pilot bike-sharing program in the city by the Bay has been stalled out since he announced it in January, hampered by criticism that it was too small to succeed and by fears of vandalism and theft. 

    Sunday's bikes were part of the "Bixi" system--a blend of the words "bike" and "taxi"--that is currently in use in Montreal. Let's hope it, or some form of bike-sharing, catches on in more cities soon.

    July 5, 2009

    Sharing Revolution v. Big Grey Cloud

    With all the excitement around the release of The Sharing Solution, I have been daydreaming lately about the sharing revolution. The sharing revolution. Hmm... that seems to merit capital letters: THE SHARING REVOLUTION!

    That's better.

    We are on the brink of something exciting, something with the power to transform our world. I love to imagine the near future, when people everywhere share cars with their neighbors, start local tool-lending libraries and childcare cooperatives, do regular mealsharing with friends, and form casual cohousing arrangements in every neighborhood. What's more, the value of all of these things is somehow greater than the sum of their parts, and the potential of it all makes me gasp.

    First of all, I've seen all those tiny green sprouts popping up all over the place. They are everywhere: sprouts of hope, new technologies, new attitudes, social justice, green collar jobs, and community building. They are sprouts of community gardens, solar panels, bicycle lanes, buy-local initiatives, recycling programs, fair trade, microlending programs, restored creeks, and so many other beautiful things.

    Okay, granted, there's a huge grey cloud making it hard to see these little sprouts. It's true that the economy, the environment, war, unemployment, evictions, foreclosures, homelessness, contamination, water shortages, businesses closing, and the disappearance of fish in the sea, to name a few, make for one very large grey cloud (VERY LARGE GREY CLOUD).

    But the sprouts are most definitely there. What I'm wondering is: When are these sprouts going to grow enough to overtake the grey cloud? Seems to me that if they grow just enough, they'll create fertile ground for more growth, and more, and more! But for now, their growth is frustratingly slow. Too slow?

    I could think of ways to speed them up, but many ways require change mostly beyond my control. There are top-down changes, like getting the government to put money into green-collar job creation, instead of, say, prisons. But I'm not holding my breath -- and I'm not expecting our government to catalyze the growth of the sustainability movement (though I truly appreciate that our President is on the right track).

    What about all those millions of people with wonderful ideas, great intentions, and the will to change the world? The grassroots! Couldn't they (I mean, we) get this new green revolution going? Unfortunately, with the way things are going, I'm worried that we won't. So many of us are overworked, burnt out, struggling to make ends meet, and worried a lot about our own survival right now. It's not easy contending with a large grey cloud.

    But I only say all this to emphasize the importance of the missing ingredient: Sharing! Or, perhaps I should say: SHARING! Sharing has the most potential to add momentum to the changes already taking place, getting us to the tipping point where a sustainable and socially just world is truly possible. Sharing is not just the fertilizer that helps those green sprouts grow bigger. Sharing is more like a catalyst -- one small ingredient that you can add to the mix that makes everything just explode.

    The power of sharing is unique in a handful of ways:

    • Sharing, unlike recycling, is naturally contagious. Sharing opens up a pattern of generosity and mutual caring that breeds on itself. A lot of other things we do to change the world aren't quite so viral. One person reducing his or her waste, for example, may or may not inspire a neighbor to do so. But offering to let your neighbor use your basketball hoop or eat strawberries from your patch opens up the flood gates of generosity.
    • Sharing is self-serving, so we'll want to do it. Sharing helps us meet our needs more efficiently and cheaply, and sharing our snow blower with a neighbor might mean that she will let us use her hot tub. (Yessss!) Sharing builds community, which makes us happier people, and cooperation has been shown to release endorphins. So there's no need to force anyone to share -- people will naturally start doing it to enjoy the benefits.
    • Sharing reverses the drain on our time, energy, and resources. For those of us who are spread way too thin, sharing saves resources, money, time, and energy, thereby freeing us up to garden, compost, recycle, hang our laundry, ride our bicycle, volunteer, advocate for social and environmental justice, and do things to help ourselves and the planet. We'll all get a little more rest, the support of a community of sharers, and the strength we need to get all the sprouts growing. In short, sharing gives the grassroots the time, energy, and resources we need to grow a better world.
    • Sharing connects all of our isolated world-changing acts and boosts their potential. As I noted, the sprouts are everywhere -- people planting urban food gardens, composting their food waste, and installing solar panels. But many of these are things we do in isolation -- and when we can find the time and energy. Sharing adds the element of community, which boosts the potential and the impact of everything we do -- neighbors can get together to jointly purchase or bargain for solar power, or they can start a neighborhood compost project. It's more efficient, and each additional person who joins the effort compounds the benefit to the earth and to the others in the group. Much of what we do to save the world can be done better if we organize and cooperate, and it can be much more fun that way, too!
    • We don't have to wait for someone else to hurry up and do anything. We don't have to wait until our government starts a new program or provides needed funding. We don't need to change the laws. We don't have to wait until a scientist invents a solution. We don't even need to form a nonprofit or fundraise to get started. We just start sharing. Today.
    • Every single one of us can share. I've been known to say things like: "I can't afford to make a donation;" "I don't have time to volunteer more;" and "I don't know how to install solar panels." It's all true. But it's hard to say, "I can't afford to share," or "I don't have time to share," or "I don't know how to share." Sharing is something that everyone can do. Even a curmudgeon, even a poor person, even a busy person. I think the hardest part is getting started, then ironing out the details, understanding everyone's expectations, and figuring out the logistics. But my friend Emily Doskow and I just wrote a book to help everyone through that part. So otherwise, there's nothing stopping any of us from sharing.
    • Sharing is a clean and easy way to get rid of the big grey cloud. Somehow or another, we need to get rid of that cloud. Otherwise our future looks like, well, a big grey cloud. There are all kinds of approaches to this -- some folks reform the system, lobbying, advocating, and making changes bit-by-bit. This is an important thing to do, but it's way too slow. Others propose bringing down the system in one fell swoop, which usually involves an uprising, or a full-blown violent revolution. I can only imagine that this would be messy. Very messy. The system has very large weapons, and even if we do succeed in taking out the system, we will then be faced with the task of rebuilding something on top of a big mess. Fortunately, we really don't need to remove the system before we can start replacing it. Even while the grey cloud is still hanging out, we can start sharing, nourishing our local economies, going organic, and creating rewarding green-collar job opportunities. The spouts of our new system will simply overtake the cloud with time.

    First, there's the "grow or die" economy -- where companies must compete in order to survive, grow in order to compete, and create increasing demand for their products in order to grow. And the best way for a company to sell a lot of a product is to create a culture of "self-reliance" and "convenience," convincing all people that they should have one of their OWN. This culture of "self-reliance" is so ingrained in us that it would feel awkward asking the guy in the neighboring apartment unit if he would like to share a vacuum cleaner. Vacuum manufacturers would want us to believe that we should each have a vacuum, or even two.

    Second, there's the fact that, until recently, we could maintain this lifestyle without actually seeing the impact of it. Now we have seen how perpetual growth is eating away at the planet's natural resources, melting the icecaps, and undermining a stable economy. Now the images of factory farms and third world sweatshops have made their way into our minds, and we are all searching for a more compassionate and sustainable way.

    In the meantime, we have gotten out of practice with sharing. Sharing and cooperation are arguably as old as civilization itself. But today, much of the sharing and cooperation we do are managed by the government or businesses via incredibly complex systems of global cooperation. As consumers, we mostly just experience the end-products, such as electricity, water, manufactured goods, and food. So while we benefit greatly from cooperation, we have lost the ability to do it directly and face-to-face. In this sense, we are a vulnerable culture. We are blinded to the harms that our consumption inflicts on the world, and we are not prepared to meet our needs if or when the complex system crumbles.

    So we might as well roll up our sleeves now, gather our friends, family, and neighbors, and get creative. Solar power cooperatives, neighborhood rainwater catchment installations, a cooperatively owned water purification system, community supported agriculture, neighborhood fruit tree harvests... The possibilities are endless and they will completely transform our world. That's why it's a sharing revolution. Not a trend, not a movement, but a REVOLUTION. Goodbye grey cloud. Sharing is here to save the planet.