Nonprofits Don’t Know How to Work with Lawyers, Actually

As a former executive director now serving as a lawyer for tax-exempt organizations, I’m going to just say it: Nonprofits often don’t know how to work with lawyers. They sometimes don’t realize that the practice of law is licensed at the state level. Or maybe they believe a personal injury attorney is an expert in real estate transactions for 501c3s. My favorite: Lawyers are only for when you need someone to speak in the tongues of Latin because you’ve hit exorcism-level mode in your nonprofit hellscape.

I’ll take one for my profession: Lawyers don’t often know the relational side of their work. We’re not trained for it in most law schools. We fear vulnerability in asking potential clients if they know how to collaborate with an attorney, or how we can best support them. We also might gloss over how convoluted nonprofit cultures can be if we’ve never worked for one (not me, I see you, with your equity language and internalized -isms.) I dream of a world where lawyers are nonprofits partners proactively.

However, I often hear these misconceptions about the role of lawyers when I talk to nonprofit executives:

“I don’t have a budget for a lawyer/Attorneys for nonprofits should be free because I’m creating good in the world.”

Hey, nonprofit scarcity mindset, we’ve got a wakeup call these days. Legal services should be something in your annual budget, even if you do not max out that line annually. Is your fractional CFO free? Is your insurance free? While there are many resources for pro bono support for nonprofits, they, too, are limited in how much they can develop an ongoing relationship with you. I know the nonprofit scarcity anxiety. I’ve stared down draft budgets and wondered how I could make things work. I’d always want to prioritize staff over outside vendors. I understand why you don’t want to spend money on things.

Here’s something I’ve reflected on as a small business owner, too. I’ve managed nonprofits of $6M+ annual budgets. Will my small business ever have that budget? No. Do I pay attorneys when needed? Yes. Having a commitment to the public good is fantastic. We all want to rally for nonprofits. We need you! Many nonprofits establish general counsel relationships proactively. Imagine your future: “Who’s your lawyer?” “Oh, she has a cool blog and I hardly call her, but when I do, I know she will be there for me . . . ” I believe nonprofits can live their values by investing in vendors, such as attorneys, that are also mission-focused and rooted in their communities. 

 “I’m stuck with this attorney. I inherited some guy named Bob who bills us . . . a lot.”

I’ve been there. I took over an executive director role occupied for decades by someone else and suddenly, I had an attorney named “Bob” at a large international firm. I googled him before our first meeting and saw that his claim to fame was defending inhumane warehouse conditions. My predecessor, not an attorney, had hired the attorney because of firm name recognition. While I found my initial chats with Bob to be fine, I had hives when I got the bill for $1000+/hour. What distinguishes me from Bob is that my face will probably always show how I’m feeling about a situation and that should come at some client discount. Well, that’s not the only thing that distinguishes me. Know that just because you inherited an attorney and were given a keychain with a rubber duck decoration and 29 keys that don’t actually unlock your filing cabinet, you have choices. By choices, I mean, beyond quitting this whole nonprofit thing.

“My board member is my attorney, so I’m set!”

I love this situation and let me tell you why. My background is in employment discrimination and civil rights. I wish that I could get a sponsor every time an executive director whispers to me that their work life is miserable, but they can’t do anything about it because their board chair is also the organization’s attorney. Hello, conflict of interest! Executive Directors, lean in, you get to choose your attorney. Also, come in closer– Please don’t recruit board members who are attorneys just to get free legal advice. Your board members have fiduciary responsibilities to the organization and they can experience conflicts between acting as your free lawyer and serving the organization’s best governance interests. Suggest your board member chat with the Bar ethics line about potential hypos that will keep you all up until the end of one of your many asynchronous fiscal years. Besides, most times someone tells me this situation, their board member attorney has no experience with the law of nonprofits. Let’s stop thinking that nonprofit= somehow less professional or complex. If you’re planning on getting a divorce from your board chair, by all means get that free family lawyer. Yes, we are lawyers and yes, we can specialize.

“My board members can insist I work with an attorney they know and like and I can’t do much about that.”

Referrals are fantastic, but who is calling the shots here? If you need advice as an executive director and do not like the attorney or feel like one was chosen for you, it’s time to get both a board training and a new set of options. The weirdest version of this scenario which is all too common is when the board member is an attorney or has a financial interest (maybe as a spouse or an attorney in another practice area of the firm) in a particular law firm. If that firm is being paid and your board member is calling the shots, then that board member is creating a conflict for your nonprofit and engaging in some self-dealing. If the attorney is free for your organization, but you don’t have a choice as an executive director and/or worry that whatever you communicate to the attorney will just go to the Board member, you should ask the attorney about the limits of confidentiality in your relationship. 

“I would only hire an attorney when I have an explosive employment law situation.”

Attorneys only litigate, right, or are like overpriced human resources people? No, friend, your attorney should be your proactive partner in establishing and reviewing policies, training your Board about your role and theirs, ensuring your intellectual property rights, making sure your contracts with independent consultants reflect your values, developing a records retention policy, assisting you in navigating the current attacks on nonprofits, and advising you on complying with funding– among a host of other functions. I see myself as a lawyer, advisor, legal educator, and strategist. While I am an attorney who loves employment and labor law, I hope you will have an ongoing and proactive relationship with an attorney so that you don’t get to the point of wondering whether your insurance will cover a lawsuit. 

“An HR specialist is all my nonprofit needs. Alternative: I crowd-source solutions in social media groups and on ChatGPT and save my organization money– which is fiscally responsible.”

Ok, apologies to my family– They hear about this one too much after I’ve been doom-scrolling and landed in a group where people can’t identify a legal question from a flash mob. Many of the questions nonprofits face are legal ones. An HR specialist, no matter what their SHRM training, is not equivalent to a lawyer.

That retired executive director lingering in your Facebook group who tells you something is illegal? That’s just a stranger with time to comment. They can be your emotional support, just as HR specialists can give you templates and provide some training and day-to-day practices. You have not received legal advice if you have put a question to the ether. I don’t care how many people commented with their passionate stories. You paid nothing and got feels. It was a start, but it can’t be the end.

Here’s how I chose to reduce costs for nonprofits I worked with as an executive director, even as a lawyer myself. I saw my organization’s lawyer as giving me peace of mind and coverage. I saw the HR specialist as someone who could help the organization ensure that we were collecting the appropriate paperwork, expediting our payroll systems, getting regular reminders about changes in our state (though, your lawyer can help with this, too), and creating a conduit for outside facilitation if needed. Both lawyers and HR specialists can coach you on difficult conversations. In a future post, I might end that fantasy that either profession can have those conversations for you, but maybe you watched Up in the Air and started to fantasize about that service. 

“My organization’s lawyer is my lawyer. I should ask them if my Board is discriminating against me.”

We can explore this topic further in a future post, but please understand that the lawyer you hire for your organization is not your personal lawyer if you have a conflict with your employer. If you believe you are experiencing employment discrimination or want to negotiate an exit, seek a plaintiff-side employment lawyer in your state. Many states have professional associations for this purpose. For example, in Washington State, I recommend checking out WELA: https://welalaw.org/members/

I’m sure this list could get to fifty items quickly. My best advice is to find a lawyer before you need one for an emergency. However, if you have an emergency, you can always use Justice Studio’s RED line booking service if you’re an organization in WA state or have an issue here: https://www.justice-studio.com/#book

If you have ideas for future posts about how to make the attorney-nonprofit relationship less painful, reach out to me: carrie@justice-studio.com.

My Disclaimer: Justice, Actually is a blog, not a substitute for legal advice. Given that it is written by an attorney, you can safely assume it’s also a form of creative expression and a bit of advertising.