American law firms such as Sonnenschein Nath & Rosenthal LLP have a long and storied history of providing free pro bono legal assistance to those most in need. Whether the issue is the death penalty or domestic violence or freedom of speech, law firm partners and associates historically have dedicated thousands of hours to pro bono work.
In 2008, Sonnenschein lawyers provided more than 50,000 pro bono hours to indigent individuals and nonprofits serving the poor. But there is a legal crisis for which law firms generally have been unable to provide anywhere near their traditional level of pro bono assistance: mortgage foreclosures. With the limited exception of programs developed by the New York Federal Reserve, conflict-of-interest rules have prevented law firm lawyers from representing homeowners who face foreclosure by the banks that are the firms' clients. As a result, law firms generally have been kept to the sidelines of the mortgage foreclosure legal crisis.
Recently, however, Sonnenschein has developed a pro bono project that permits its lawyers to provide meaningful pro bono assistance to address the mortgage foreclosure crisis. In early 2009, Congress enacted the Neighborhood Stabilization Program for communities suffering from foreclosures and abandonment. As has become all too common over the past few years, abandoned foreclosed homes represent a real and present threat to the continuing viability of neighborhoods. The intent of the program was to distribute substantial federal dollars to hard-hit areas of the country. The program envisioned a web of local municipality and non-profit entities collaborating to maintain or repair abandoned homes for repurchase. Before this important work could begin, however, the necessary legal infrastructure needed to be created. Finally, here was a conflict-free opportunity to help. And Sonnenschein lawyers immediately got involved.
First, in Chicago, Sonnenschein's real estate practice group leader, Jana Cohen Barbe, was retained by Cara/Cleanslate, a leading Chicago nonprofit that assists motivated individuals affected by homelessness and poverty to achieve real, lasting success. Barbe and a transactional associate, Alex Amezcua, drafted the necessary documents to create a joint venture with Mercy Portfolio Services, which had been selected by the city of Chicago to administer $55 million in Neighborhood Stabilization funds. The program infrastructure now has been created, and the project is up and running. In fact, Sonnenschein pro bono client Cara/Cleanslate has so impressed the community in Chicago with its ability to repair abandoned homes that it now has been retained by several large national banks to maintain homes on which the banks have foreclosed in high-risk Chicago neighborhoods.
Building on Sonnenschein's Chicago experience, the firm reached out to Legal Aid of Western Missouri, which was informally helping to structure the Kansas City Neighborhood Stabilization Program, with $8 million of federal funds. Sonnenschein was retained by the Kansas City branch of Habitat for Humanity, one of the nonprofits selected to maintain and repair abandoned foreclosed homes in Kansas City. As with the Chicago project, Sonnenschein's efforts were led by senior firm lawyers, including the head of the Kansas City office's real estate practice, John Snyder, and James Neeld, a real estate partner who ultimately led on the project. On behalf of Habitat, Sonnenschein negotiated the terms of Habitat's participation in the program and prepared agreements with lenders.
Sonnenschein's efforts in the negotiation were especially important because of Habitat's insistence on maintaining control over who ultimately would purchase the repaired homes. The group insists that prospective homeowners have to participate themselves in the creation of the home in order to truly become successful homeowners. Sonnenschein was able to successfully advocate for Habitat, and the project now is up and running.
Sonnenschein's pro bono assistance to these nonprofit clients working to stabilize communities hard-hit by foreclosure and abandonment represents just the latest example of a long history of meaningful pro bono work at the firm. Yet Sonnenschein's work on the Neighborhood Stabilization Program is particularly satisfying to its lawyers because the retentions came about as a result of Sonnenschein not being satisfied with staying on the sidelines of a legal crisis.
Benjamin C. Weinberg is Sonnenschein's pro bono partner.
Before joining the firm, he served as chief of the Illinois attorney general's Public Interest Division.