Evan Absher, 3L, and Kate Garman, 2L, were provided a unique experience this year when they were asked by Law & Entrepreneurship Professor, Anthony Luppino, and John Tyler, General Counsel at the Ewing Marion Kauffman Foundation, to co-author an article on “hybrid” business forms that blend aspects of traditional for-profit ventures with characteristics normally associated with non-profit entities.
The topic of the article is social entrepreneurship and the new legal business entities available, with an emphasis on new “hybrid” entities that have a focus on social good. Professor Luppino asked Absher and Garman to be a part of this paper because of the work they had done together working on a piece of legislation that would address “hybrid” entities. Their legislation was ultimately not adopted, but it did help to shape how they look at “hybrid” entities.
Absher and Garman are currently working in the Kansas City mayor’s office as policy interns. It is through this internship that they are able to see policy at work and how it is crafted and implemented. Their research helps to inform some of the policies that are currently being worked on in the mayor’s office. Both Absher and Garman’s passion for policy making and desire to work in public policy once they graduate from law school led them to work on this paper.
With the support of the Law Foundation, Absher and Garman were able to travel to Washington D.C. to present the paper alongside Professor Luppino and Tyler at the George Washington Global Entrepreneurship Research and Policy Conference on Saturday, October 18, 2014.
The Law Foundation played a role in this experience that has now helped to shape their law school careers. Being able to present validates what they are working on and wrote. This article is having an impact on the conversation surrounding “hybrid” entities and it is starting conversations in Kansas City.
Currently there are three main offerings for “hybrid” entities and only one of these offerings creates a fiduciary duty to the social purpose; the others only alleviate the fiduciary duty to shareholders. This causes a problem in that managers don’t have to pursue the social good or shareholder value. Professor Luppino, Tyler, Absher and Garman are addressing this issue with their article.
“What we say is these hybrid entities fall short of delivering on their promise of having companies go above and beyond for the social good. So we proposed a statutory scheme that would create a hybrid entity that creates a fiduciary duty towards a social purpose,” said Absher. “Because the problem with the other ones is that they are basically contracts and when someone breaches a contract the remedies for a breach of contract might not be as adequate as a breach of fiduciary duty.”
Garman feels that these “hybrid” entities can be strengthened to align with the current investment climate.
“Right now the legal community is debating whether or not the specific available legal forms are valuable. We are adding to the conversation by not just evaluating current options, but examining how the legal forms can and should evolve,” said Garman.
Now with millennial and impact investing people are giving money to not only make money but to also impact the social good. It is because of this trend, the conversation around hybrid entities is no longer a ‘yes or no’ discussion regarding what is currently on the table.
As the only students presenting at the conference, they still fit right in with industry professionals and professors who spoke with them on an equal level. In addition to presenting at the conference, they were able to connect with professionals in the field of social entrepreneurship who were interested in their viewpoints.
“I really enjoyed writing and presenting on behalf of the school. It’s a privilege to further UMKC Law and highlight what we are doing . The opportunity to do that on the coast was especially great,” said Garman. “We were the only students to present. Most of the conference speakers were academic scholars with PhD’s, many of whom we networked with and talked about the future of research for social entrepreneurship.”
Experiences like this are important not only to the larger legal and scholarly conversations but these opportunities also help students gain a practical knowledge of what they will work on once they are in the field.
“I think UMKC is in a unique position to really rediscover legal education. I think this experience has reinforced the idea that although the first year is very necessary to reconstruct your brain as a person, and it did, and it does, and it should, you have to really reexamine what are we really doing to prepare [after the first year] and this experience really hit all of those things,” said Absher.
Opportunities like this are what makes UMKC Law unique. Students are able to work with faculty and have the support of alumni to explore their fields of interest in depth and contribute to the legal and scholarly discussion while gaining practical skills and knowledge that will help them in their future career.
The article titled “Producing Better Mileage: Advancing the Design and Usefulness of Hybrid Vehicles for Social Business Ventures,” will be printed in the upcoming issue of Quinnipiac Law Review.
To view the abstract of their article on SSRN visit: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2506247