4 Things to Think About Before Naming an Attorney to a Nonprofit Board
I work with a lot of people who’d like to start a nonprofit, and one of first things I usually have to remind those founders is that a nonprofit startup needs board members. Once I remind them of all the important things the nonprofit board does, it’s up to them to find people that’ll do a good job. Sometimes, those people are attorneys, and sometimes that can cause problems down the road.
But First – What Should you be Looking For in a Potential Nonprofit Board Member?
Most people reach out to potential board members based on some really important criteria. Passion for the mission, professional expertise, having the time and resources and energy to dedicate to the startup, and so on. The board is super important, so you want people that’ll be up to the job.
At the beginning stages, nonprofit governance looks pretty rough. “Hey, we need money, let’s raise some,” or “who can get 10 volunteers to show up at the next rally,” or “we should bring our mobile soup kitchen to the corner of 5th Street next month.” With a new nonprofit, it starts out as pretty low level, day-to-day operations stuff. BUT, as time goes on, the board members will be doing things like:
- Setting policy and ensuring the organization has the resources it needs to carry out its mission (the fancier version of “hey, we need to raise money”)
- Provide direct oversight and direction for its key staff and be responsible for evaluating their performance (instead of recruiting volunteers, now you’re managing the Executive Director)
- Evaluate its own effectiveness as a governing body and as representatives of the community in upholding the public interest served by the organization (instead of worrying about ground-level decisions, you’ll be focused on the 30,000-foot view)
As you can see, serving as a board member isn’t just an easy volunteer gig. You need some smart people who will bring knowledge, grit, and passion to the table to get the startup off the ground.
So, it’s definitely important to find board members that can bring in some valuable insights based on their backgrounds. BUT, this can also get you in some tricky situations if that expertise you’re looking for is in law.
I see nonprofits approaching attorneys about board service ALL the time. That’s awesome, since there are a ton of lawyers out there who are qualified and passionate about different causes. But, there are some things to consider before you fill a board member position with an attorney.
Attorney vs. Nonprofit board member
People tend to perceive lawyers as well off (aka: ready to write out the big donation check) and knowledgeable of all areas of law (aka: ready to dispense free legal advice). So, awesome choice for a board member, right? Turns out, it can get a bit more complicated than that.
Attorneys can serve your nonprofit organization in two ways: (1) as a member of the board, and (2) as an attorney who represents the organization through the board. But when these roles overlap, things can get pretty messy.
Can They Give the Board Legal Advice?
One thing to know about the lawyers: they don’t have expertise in all areas of law. A personal injury attorney likely will not know enough to advise on your nonprofit’s taxes. A criminal attorney probably should not give advice on the employment issue that came up. It’s totally understandable that people turn to the lawyer in the room whenever a legal issue crops up. But, it can get the nonprofit (and the lawyer) into a sticky situation if you rely on advice from a lawyer outside of their expertise.
Lawyers on your board are there to fulfill their passions about your mission, not to represent your organization. Even if the lawyer is knowledgeable and qualified to advise on a legal question, you can avoid issues by seeking outside counsel.
When Board Service and Representation Conflict
If your board relies on legal advice from an attorney/board member, then there’s an attorney-client relationship. Even without formal agreements and paperwork, a court would consider your board member to be an attorney for your organization. This relationship makes things difficult for the attorney/board member work well in either role.
When lawyers represent a corporation – yes even a nonprofit – they represent the entity, not its individual volunteers, staff or directors. If an attorney represents your corporation and serves as a board member, they are not only legal counsel but also one of the duly authorized constituents.
AND, in that case, the attorney is obligated to keep confidentiality. You can see how that can get confusing, messy, and complicated in everyday operations. If they are communicating with with board members, stakeholders, donors, and so on, what is confidential? All of this can make it hard for the lawyer to serve on your board, and it can cause issues for them and for the nonprofit later on.
So, Now What?
Knowing all of this, what do you say to the lawyer interested in board service? Should you still reach out to the attorney you’d like to serve on the board?
Well, the issues I described are not inevitable. Attorneys and board service can be tricky, but my intention isn’t to discourage you from having an attorney passionate about your mission serve on your board. Instead, I just want your senses tuned up to know what things to discuss with new board members (and when a legal issue pops up later on).
It’s important to have a board of directors full of interested, capable people to carry out the mission of a nonprofit startup. And that’s not always easy. For more information you need to know as you start a nonprofit, follow me on Twitter or on Facebook.