Like any business, before Baltimore Bicycle Works could open its doors in 2008, the bike shop needed to establish its legal structure.
But rather than envisioning the shop as a typical corporation or an LLC, its owners pictured a much less traditional organization: They wanted to form a worker cooperative, a democratic enterprise in which each worker is also a part-owner of the business, and all workers have a vote in decisions.
“The worker-owner model allows for everybody to have a say in the work they do,” said Meredith Mitchell, one of the shop’s six worker-owners. “It expects that people will take on leadership roles and provide vision and direction for the organization.”
While estimates put the number of worker co-ops in the U.S. at about 300 to 400, a buzz has been slowly building around the idea — especially with would-be business owners who want social purpose to be an ingrained part of their enterprise, said Parag Khandhar, a clinical teaching fellow in the Community Development Clinic at the University of Baltimore School of Law.
“We feel like what we’re doing here is serving this burgeoning new space where people are thinking about their values, as well as thinking about earning a living,” Khandhar said.
Over the last school year, the clinic helped Baltimore Bicycle Works rewrite its corporate documents to more closely reflect its mission.
Although Baltimore Bicycle Works’ owners initially worked with a law firm to draw up legal documents, Mitchell said, they didn’t feel as if the resulting agreements really fit their purpose.
“They had a hard time wrapping their mind around how our business differs from the traditional business,” Mitchell said. “The students were interested in learning about our business and how we functioned, and really tailoring the work they did to what we needed.”
About a dozen law students work in the clinic each semester, Khandhar said. They help clients set up corporations and nonprofits, perform legal research and, under the direction of the attorneys, advise on legal matters.
Two law students from the clinic worked with Baltimore Bicycle Works over the past school year, helping the worker-owners revamp the organization’s operating agreement, bylaws and other documents to better reflect the owners’ vision of a cooperative work environment.
Forming a worker co-op in Maryland is not always a simple task, especially since they must work within the template of more traditional organizational structures, such as a limited liability corporation or other corporate form.
“You have to be open-minded,” said Douglas Nivens, a recent UB Law graduate who worked with the bike shop during his time in the Community Development Clinic. “It’s very different when the employers are the employees.”
After meeting with clients and learning the ins and outs of a particular business, students in the clinic are able to tackle the task of drawing up a legal plan for a given organization like the bike shop, said Jaime Lee, the clinic’s director.
“Our practice here at the clinic is to train lawyers who listen to the client and their vision for their future and help them achieve that vision,” Lee said. “There aren’t cookie-cutter models out there.”
The satisfaction of fulfilling a client’s vision is a big draw for law students who choose to spend their clinic hours working on community development, rather than litigating, Lee and Khandhar said.
“People think of lawyers often as sort of a destructive force,” Khandhar said. “What I like to say is that we help people build things.”
The clinic also attracts many evening law students who can’t take off work during the day to meet with clients or appear in court, a requirement for other clinic courses. Because the work takes place outside the courtroom, most of it can be done after business hours, said Nivens, a former evening student.
Other students see the clinic as a chance to apply their skills and explore a different area of the law, Lee said.
“We’re creatively problem-solving; we’re helping people take a vision and make it a reality,” she said. “There’s something very optimistic about that.”
At the bike shop, customers may come in and leave with no knowledge of the shop’s unique structure. But others, Mitchell said, come specifically because of its cooperative organization.
“The general thought, ‘Is there a better way to be organizing working people?’ is definitely on the minds of a lot of people, especially after the recession that we’re just now crawling our way out of,” she said.
Part of the clinic’s mission is to support the community by providing resources to local businesses, especially in underserved areas, Khandhar and Lee said, so the altruistic nature of worker co-ops aligns closely with its goals.
“Baltimore is a city full of entrepreneurs and creative people, and they’re really committed to a vision of a social economy that’s better,” Lee said. “Worker cooperatives are definitely a big part of that.”