Entrepreneurs face countless legal challenges, including setting up a business organization, obtaining licenses, securing real estate, hiring employees, complying with safety regulations, protecting intellectual property and setting up contracts with key suppliers. Law students at the University of Chicago who work with lower-income entrepreneurs at the IJ Clinic on Entrepreneurship might encounter questions on any or all of these topics.
It would be easy to fill our course that IJ Clinic students take solely with a survey of the legal areas that entrepreneurs most often face. Indeed, that is how all the other clinics in the country prepare students to serve entrepreneurial clients. But we take a different approach—an IJ approach. We aim not just to prepare our students, but to inspire them. We seek to provide perspective on how entrepreneurs fit into the bigger picture of the economy and the legal system.
“We aim not just to prepare our students, but to inspire them. We seek to provide perspective on how entrepreneurs fit into the bigger picture of the economy and the legal system.”
Luckily, we are not alone as we shed light on the questions of entrepreneurs’ place in the world. We have mentors and advisors such as Joseph Schumpeter, Ludwig von Mises and Israel Kirzner.
With the guidance of these economic titans, students realize that entrepreneurs are instrumental in keeping our economy humming. They come to internalize the idea that an entrepreneur’s freedom to pursue new opportunities and new ideas is essential to progress.
For the very first class session, students read that entrepreneurship is premised on the notion that change is normal and indeed healthy. As Schumpeter explained, entrepreneurs replace old products with innovative solutions. As we discuss in class, von Mises emphasized the role of human action in economics: Entrepreneurs do not just react mechanically to the world, but actively notice new opportunities. By pursuing their dreams of new businesses, they create change.
These notions of innovation, creativity and human inspiration are most often left out when people discuss the supply and demand curves of neo-classical economics. With these new ideas, our students appreciate the creativity of entrepreneurs. They realize that entrepreneurs are embarking into the unknown, and that we all benefit from their courage.
We do not stop with a discussion of economics, however. After all, our class is called “Entrepreneurship & The Law,” and we have to reach the legal part eventually! But students view the legal system with a fresh perspective once they have come to understand the unique role entrepreneurs play in effecting change in our world.
When we discuss the licensing requirements that IJ has fought against for so many years, our students better understand how those laws get passed. They see how entrepreneurs are sometimes seen as a threat to the established businesses in an industry—the ones most likely to have power to influence the legislature—because true entrepreneurs are offering products or services in a new and improved way that could knock out the old guard. When our students understand the invaluable role lawyers can play in advocating for entrepreneurs within the system, then we know they are ready to join the IJ Clinic team.
Beth Milnikel directs the IJ Clinic on Entrepreneurship.