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NOWHERE TO RUN TO, NOWHERE TO HIDE
PRAVEEN KOSURI, Practice Professor of Law and Deputy Dean for Clinical Education
During an average semester, overseeing an entrepreneurship legal clinic requires patience, strategy, and creativity; amidst the COVID-19 pandemic and major racial reckoning of 2020, monitoring students’ work, meeting clients’ rapidly evolving needs, and maintaining personal wellness had never been more challenging. In a deeply thoughtful joint essay, Kosuri and co-author Lynnise E. Pantin, respective directors of the University of Pennsylvania Carey Law School’s Entrepreneurship Legal Clinic (ELC) and Columbia Law School’s Entrepreneurship and Community Development Clinic (ECDC), reflect on their work navigating a year that put disproportionate and extraordinary pressure on the small businesses their clinics serve. “Nowhere to Run to, Nowhere to Hide” was published in a special issue of the Clinical Law Review dedicated to reflections from 2020.
What Happens When the World Stops?
Many Black- and brown-owned businesses were operating at small profit margins even before stay-at-home orders dissolved customers and revenues for indefinite stretches. Some businesses were able to pivot to online sales and carry-out service, but those that necessitated close physical proximity — like hair and nail salons — had no way to adapt.
The pandemic brought a wave of employee layoffs as businesses struggled to survive. Generally, urban areas tended to be more affected by this than rural areas, and the gap between Black and white unemployment spiked.
In mid-April 2020, the first round of the Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus checks arrived. The Act enabled unemployed workers to file for Pandemic Unemployment Assistance (PUA) and provided $300/week payments through the end of July 2020. When many schools across the country opted for a virtual start to the 2020-2021 school year, parents who did not have the option to work remotely faced difficult choices.
Further, the pandemic put both landlords and tenants in a complicated bind. Without customers, businesses did not have revenue to pay their rent. Since many commercial leases tend to encompass long durations and include rent escalation and acceleration clauses, many small business owners were in jeopardy of losing their personal assets over non-payment. Across the country, municipalities, including both Philadelphia and New York, instated emergency eviction moratoriums and other related relief measures.
The CARES Act
The Paycheck Protection Program (PPP) authorized under the CARES Act, provided forgivable loans to businesses that kept employees on their payrolls.
The lending program, administered by Small Business Administration (SBA), began on April 3, 2020 and ran out of funds in a matter of weeks, prompting Congress to authorize an additional $310 billion funds for dispersal. Certain borrowers who were eligible for the First Draw PPP loans were eligible for Second Draw PPP loans, which opened in January of 2021 and effectively ended in May 2021 when the program ran out of funds.
The goal of the forgivable, revenue-replacement PPP loan program was to assist small businesses in meeting their short-term needs and retain workers on their payroll. Data revealed that the majority of PPP loans assisted the “smallest of businesses;” nonetheless, female and minority owners were disproportionately left out of relief efforts. Upon taking office, President Biden instated new rules that would make businesses who employed only themselves eligible for more money — a move meant to assist women and minorities, who were more likely to run one-person businesses. Nonetheless, research showed that PPP loans did not support businesses in locations that were hardest hit by the pandemic, such as New York.
“Initial evidence suggests that PPP assistance failed to meet the immense need of minority-owned small businesses in underserved communities struggled to access the available loans in early stages of the program,” the authors write.
Though there are several possible reasons for these disparities, the bottom line is that small business owners faced disproportionate financial hardship during the pandemic.
The George Floyd Protests and the 2020 Election
After Minneapolis police officer Derek Chauvin killed George Floyd, communities nationwide expressed outrage at the continued pattern of violence perpetrated by white police officers against Black men. In some instances, the outrage manifested into looting and vandalism.
The 52nd Street Corridor in Philadelphia, where 90% of store owners are immigrants or people of color, was one neighborhood in which looting and vandalism took place. Along this and many other corridors that experienced widespread looting, police were not present to protect the businesses, but instead created boundaries to curtail the destruction to certain geographic areas of the city. In New York, Mayor Bill de Blasio instated a citywide curfew throughout the first week of June but ultimately, an estimated 450 businesses across the city were vandalized. In response, de Blasio’s office enacted several small business support programs, including a grant fund specifically for those impacted by looting.
In November 2020, the election of Joe Biden and Kamala Harris signaled optimism to many; still, the ensuing attack on the U.S. Capitol building by a group hoping to prevent the transfer of power brought more violence, vandalism, and uncertainty.
Clinic Impact
Needless to say, COVID-19 and the George Floyd protests had incalculable effect on the students, faculty, curriculum, and clients of both ELC and ECDC.
In March 2020, both law schools quickly migrated to remote teaching. Students’ lives were greatly disrupted; many had to navigate sudden problems concerning housing, internet connection, private workspaces, personal health, family care, and more. Throughout the spring and fall semesters, wellbeing check-ins exposed a myriad of anxieties that stretched far beyond those of a typical clinic student.
Both authors separately recount their experiences through the pandemic, giving a face to the personal struggles that added to the already steep challenge of teaching during an inordinately complicated year; caring for family members, adapting to work-from-home orders, and having difficult conversations about systemic racism represented only a few of the immense burdens faculty carried on top of their duties as clinic directors.
Penn Carey Law and Columbia Law both successfully transferred their seminar curriculums to Zoom and strived to double their efforts to provide clients with the support they needed to stay afloat during evolving pandemic challenges. This involved developing guidance on shutdown order compliance, lease clauses, and insurance, as well as assisting in applications for financial relief programs, such as those rolled out under the CARES Act.
“The longer lasting pedagogical change from the summer of 2020 is the direct result of the George Floyd protests, not COVID-19,” the authors write. “It spurred many institutions and leaders to reexamine long-standing social and structural racism as it exists in every facet of American society. Since much of that systemic racism and inequality is baked into our legal systems and statutes, it is no surprise that law schools would take a closer look at their curricula to see how they can alter their education of tomorrow’s lawyers.”
Transactional clinics are deeply impacted by and intertwined with issues of racial and social justice. In the wake of the George Floyd protests, both law schools incorporated explicit pedagogical conversations about systemic racial and inequality into their curriculums.
Finally, in both clinics, clients displayed ample creativity and resiliency throughout the events of 2020.
“Our clients are the communities we describe,” the authors write. “They have lived through unchartered times and challenges no one ever anticipated. In their actions, we find inspiration.”
