CWRU law interns expand financial access for Cleveland worker-owners

Under a traditional cooperative model, worker-owners receive a living wage and a small portion of the company’s profits each year, with a larger share paid out at retirement. This arrangement works well for the company to retain savings to help in the case of a downward trend in business and also ensures that workers have a sum of money saved for their retirement. But for some, the funds have the potential to help them in the moment when faced with large financial burdens, such as sending their child to college or buying a new car.

Cleveland-based Evergreen Cooperatives wanted to help hundreds of employees within its network of worker-owned cooperatives reach those goals through a groundbreaking shift to its model that could make a significant short-term impact without jeopardizing its core mission of individual wealth-building over the long-term.

A client of Case Western Reserve University School of Law’s Community Development Clinic since 2008, Evergreen came to CWRU with questions. Was it legal under cooperative law to give employees early access to the profits they’d earned? And if so, how could they do it?

A third-year law student was tasked with investigating the option—and ultimately building out the structure to bring it to life.

That student—now a graduate—was Nate Dehmlow.

While he had mentorship and guidance from the School of Law faculty, including the CDC’s supervising attorney Professor Matthew Rossman, Dehmlow took near full ownership of the project, leading a team of peers. This immersive experience included drafting a comprehensive memo on the laws governing cooperatives and the early redemption model Evergreen Cooperatives was proposing, creating a holistic plan to implement the model and presenting the work for formal approval to the board.

“Here at the law school, we really do emphasize cultivation of practical lawyering skills throughout our curriculum. It is not an unusual experience for me to encounter somebody in their final year of law school who I think is already acting like a lawyer, writing like a lawyer, thinking like a lawyer, and in Nate's case, that certainly was true.” – Matt Rossman

By working with clients directly, Dehmlow and his teammates honed their legal skills in a real-world setting under the mentorship of seasoned law faculty. 

“I could speak at great length about the good practice tips I learned from working under Matt [Rossman]’s mentorship and guidance this year,” Dehmlow said. “There is a reason the [Community Development Clinic] has the strong relationships it does with its clients despite a new class of interns changing in and out every year, and that’s because Matt gives us the trust and confidence to tackle big projects, while ensuring we pay close attention to the little things that are crucial to providing valuable legal counsel.”

Even with approval from Evergreen Cooperatives’ board, Dehmlow still had work to do. He drafted an updated template of governance documents for each of the member cooperatives and presented the plan to the first of the cooperatives to adopt them to its board, answering questions its directors had about this new direction.

“So you could just imagine, for a third-year law student, to be in the front row for all this, was just this amazing experience,” Rossman said. “I was really impressed at how instinctually he knew to go about doing what I think is really the work of a seasoned lawyer rather than a brand new one.”

While Community Development Clinic clients do not pay fees for services, it was imperative that Dehmlow create documents and processes that would not overcomplicate matters, making it challenging for the organization to implement them. 

By providing such pro bono services, clients are able to redirect funds to other aspects of their operations.

“For 15+ years, Evergreen has been the beneficiary of this high-quality legal representation from the clinic—at no cost,” said John McMicken, CEO of Evergreen Cooperative Corporation. “So while providing legal services that continually make us better and stronger as an organization, these cost-savings literally increase the amount of profits being shared with our employee-owners. Doesn’t get any better than that!”

The experience also was rewarding for interns. 

“I’m proud that the work we did together by the end of the school year helped us make some significant advancements in improving quality of life for the cooperative worker-owners, which is really at the heart of everything Evergreen is about,” Dehmlow said. 

Dehmlow has since graduated and is now preparing for the bar exam. The Community Development Clinic will continue to build off his efforts. As each of the cooperatives in Evergreen’s portfolio become profitable, each will have the opportunity to approve the model for their individual business. Two of the seven businesses have already implemented the model for their worker-owners.