April 30, 2011

FOCUSING ON PRO BONO: Youth Financial Literacy: What Business Lawyers Can Teach Students

Allyn M. O'Connor

The ABA Business Law Section is pleased to announce its partnership with Junior Achievement to provide financial literacy education in schools across the nation.

On July 21, the nation's new Consumer Financial Protection Bureau will begin writing rules governing the everyday financial products used by consumers everywhere, including overdraft protection lines, private student loans, and payday loans. Consumer advocates and business leaders both expect the result to be the greatest increase in consumer-oriented rulemaking in decades. "But unless we improve financial literacy, what are we accomplishing?" asks Len Bernstein, a partner at Reed Smith LLP in Princeton, New Jersey. Bernstein even compares the never-ending attempts to regulate consumer financial products to the old Billy Preston song "Will It Go Round In Circles."

Bernstein is one of many business lawyers who volunteers his time educating high school students on financial products and personal finances. Bernstein volunteers through Junior Achievement of Delaware Valley, Inc. Junior Achievement of Delaware Valley is a local office of JA Worldwide. JA Worldwide is a non-profit organization dedicated to educating students about workforce readiness, entrepreneurship and financial literacy through experiential, hands-on programs. Volunteers from local communities serve as instructors. The JA curriculum accommodates the learning levels of students from kindergarten through high school and ranges from simple self-awareness exercises to programs on careers, savings, borrowing, and the business world generally.

JA Worldwide has already developed materials for every instruction level. To ensure a successful experience for students and volunteers, JA Worldwide packages each lesson in a kit containing detailed activity plans, workbooks, and additional materials. Many local JA offices even provide on-line teaching instruction videos to prepare volunteers.

Local JA office staff is familiar with area public and private schools, including parochial schools. They connect with schools interested in the type of instruction JA can provide, and match lessons to grade levels. There is no need for a volunteer to contact school administrators or teachers directly. Volunteers simply contact their local Junior Achievement office and ask for an opportunity. Local staff will put the classroom teacher and the volunteer in contact with each other, giving them the opportunity to coordinate a schedule. Volunteer commitments vary depending on the grade level and the nature of the lesson. After a brief orientation session, commitments can be as short as a few hours ("JA in a Day") to one hour a week for a few weeks.

Lauren Campesi is an associate with McGlinchey Stafford PLLC in New Orleans. She first volunteered for Junior Achievement instruction when she was 18 and a college freshman. "The experience was very easy," she says. "Everything was completely planned. The lesson plans come prepackaged. They're easy to read, they're easy to prepare for. All of the materials that you need are there for you. You don't have to worry about finding the school . . . that guesswork is done for you."

Junior Achievement understands the need for financial literacy and has designed a personal finance instruction module aimed at high school students. As Junior Achievement representative Marcus Brooks explains, "JA Personal Finance introduces students to the importance of making wise financial decisions. You ask kids where money comes from [and they respond], 'My mom and dad gave it to me, that's all I know.' In most cases, they don't understand the value of it. This teaches them to plan; it teaches them goal-setting and thoughtful decision-making."

The JA Personal Finance lessons cover budgeting, saving, investment, credit, identity theft, and insurance. Students work in groups to complete exercises that give them experience in these areas. "The [budgeting] lesson explains the purpose of setting goals and making wise financial decisions that meet personal goals," says Brooks. "It opens their eyes to the idea that luxury cars, nice homes, and going out to eat every night takes work, and you are going to have to do some things in order to get to that place. It helps students make the connection between wanting something and working for it."

Students also get experience completing their own personal investment guide and planning their personal financial futures. "You'd be surprised how many kids have no clue how to invest. They don't even understand investments," Brooks says. "They think you make money, you spend money. Here they learn about the things you can invest in: homes, stocks, bonds, savings accounts." They also learn valuable lessons about the use and abuse of credit, considering the benefit of postponing credit purchases, and exploring other options before putting themselves into debt.

Though the focus of the JA Personal Finance is on money, volunteers have the opportunity to teach students other skills necessary for professional success: public speaking, reading comprehension, organization, and cooperative group work.

Kathy McLeroy, a Carlton Fields shareholder, notes that this kind of volunteer opportunity is ideal for business lawyers. Business lawyers "want things that they don't feel overwhelmed with . . . in this case, the materials [cover] an area that we all are somewhat familiar with," says McLeroy.

Mustering firm resources should not be difficult either, according to those who have already volunteered. McLeroy suggests getting summer associates involved in the efforts. "They love that kind of thing," she says. Len Bernstein urges law firms to invite clients, and not just in-house counsel. "There's nothing that says that somebody who has been anointed a lawyer is the only one capable of teaching this material." He points out that clients include bankers and other members of the client organization. Lauren Campesi notes that many large clients already volunteer for Junior Achievement, making a law firm's effort to collaborate even easier.

Some firms may be hesitant to commit billable hours to volunteering for what some consider to be non-legal activities. Kathy McLeroy, who also chairs the Business Law Section's Pro Bono Committee, notes pro bono rules will vary from state to state, but most follow the language of ABA Model Rule 6.1. She suggests looking closely at the state rule. If a state has mandatory pro bono reporting requirements, also look to those rules for guidance, advises McLeroy. "The Florida Bar rule about pro bono service is relatively narrow and the focus is on the poor," says McLeroy, who is based in Tampa. McLeroy suggests seeking out schools with a high level of free breakfast and free lunch participation to be sure volunteers work with low-income students.

Many consumer advocates believe the recent financial crisis arose in part from a lack of consumer sophistication about mortgages and other financial products. While no one can be completely certain how financial illiteracy may have contributed to the crisis, the need for raising financial awareness among young people remains. Studies suggest providing financial education to youth improves their overall economic and financial knowledge.

Len Bernstein can attest to this. The students he instructed through a Junior Achievement program thanked him personally, letting him know how much they learned. "I was really shocked when I learned about the interest rates and how much you wind up paying if you only pay the minimum payment," said one. "I would never have realized that if you had not brought it to our attention." And from another: "One topic I'm particularly thankful you went over was identity theft. I had never thought of the necessity of destroying papers with personal information before putting them in the trash to prevent people from dumpster diving. Thank you for the head's up."

Allyn M. O'Connor

Allyn M. O'Connor is assistant staff counsel with the Business Law Section. She also works on the Section's Business Law Pro Bono Project.