“The cooperative model is healing the way we interact and relate to each other… and it allows us to practice law in a healing way.” – Jacqueline Radebaugh
From corporate tax law to co-ops, Jacqueline has been on quite a journey as a lawyer.
Now she’s the best dang coop lawyer around (spoiler alert: she’s ours).
Jacqueline is a managing partner at Jason Weiner, a firm that provides legal and business consulting for mission-driven companies, social impact, and environmental enterprises. Jacqueline assists mission-based, values-forward entrepreneurs and businesses in identifying and addressing their legal needs, from start-up phase through financing rounds, to conversion and exit strategies.
On top of the three things everyone should kind of already be doing before they begin discussions in creating their coop (open books, decision-making practices, and sharing profit), we also cover:
- What makes a coop successful?
- What do extractive practices mean?
- What paperwork do you need to be a coop?
- What is sociocracy?
- Where are the common places people struggle when building their coop?
Enjoy!
Action items from this conversation:
- Think about this quote from Jacqueline: “Cooperative work is about sharing what you normally don’t want to share in a traditional business.” What is something you would struggle sharing in your business? Why?
- How do you make decisions in your organization? Is it clear and obvious to everyone?
- What is your bonus or compensation program? Is it open and understandable to everyone?
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Learn more about where Jacqueline practices law, Jason Wiener |p.c.
Follow Jacqueline on LinkedIn.
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Read the raw transcript:
[00:00:05] Anna: Welcome to Flying the Coop, a podcast about rethinking how business works and who it should work for.
[00:00:12] Janel: We are Janel and Ana, small business owners learning in public as we turn our company Strange Birds, into a worker owned co op. Today we’re interviewing Jacqueline Radebaugh, the best dang co op lawyer around. Jacqueline is a managing partner at Jason Weiner, a firm that provides legal and business consulting for for mission driven companies, social impact and environmental enterprises.
[00:00:35] Anna: I met Jacqueline at a co op law conference about a year ago.
Yeah, where I was, I think, one of the only two non lawyers in the room. My brain completely melted. It was a conference for lawyers, but it was all focused on co op law. I knew that a co op was the direction Strange Birds wanted to head and I didn’t know what, what I didn’t know.
But I did get to meet Jacqueline there and instantly realized she just might be the perfect lawyer for when Strange Birds needed a lawyer to get all of our co op documentation. Ducks in a row. Spoiler alert. She was the perfect lawyer.
So to get into our interview, Jacqueline, how did you originally become interested in co op law?
[00:01:21] Jacqueline: I did corporate tax law for a long time and then I decided that’s really not what I want for my life. I quit law, I go to France, I study sociology because why not start doing a whole different area of law, find myself doing non profit and then meet my spouse, move to the US and have to essentially try to figure out where my skills are at, how I can practice law here again. I reach out to a colleague and mentor in Brazil and, and I mentioned, hey, I’m thinking about doing a tax law again because comfortable.
And she said you can choose from anything and you’re going back to tax law.
And that’s a great question. Well, and I sat with it, I really did. And I thought maybe I’ll stay within nonprofit practice and join the clinic at the University of Texas, where I was at the time.
And started realizing that there are other options that I’m not familiar with. What can I do?
And Janelle Lorsi from the Sustainable Economies Law center came to talk to us and she is kind of, I guess she would hate for me to say that, but she is the guru of law, cooperative law practice and experience. And we all look up to her. She’s the most creative attorney I’ve ever met. And she talked about cooperative with so much passion and wonder. You could just see in her the interest and just the values alignment and everything. And I just started looking into that and got Very interested.
And an opportunity came up right after, right as I was graduating in Texas to work with a non profit legal services organization in Ohio that was exactly hiring for somebody with experience with businesses, non profits and had some interesting cooperatives, but not necessarily knowledge because not a lot of attorneys eight years ago did that type of work. And so it was perfect. It was the most amazing coincidence and just opened a whole world of possibilities for me.
[00:03:38] Anna: It just ticked all the boxes.
[00:03:40] Jacqueline: Right. It’s just. How did you describe a job for me? There’s the only one in the country.
So I was in Austin, Texas. Would have gone anywhere in the country for that job description. Found myself in Dayton, Ohio, where I’ve been having fun since.
[00:03:55] Anna: That’s amazing.
All right, Jacqueline, So as a co op lawyer, how would you define a co op?
[00:04:07] Jacqueline: You know, I try not to be the legalist one, saying that there’s a legal entity type, but it is a legal entity type.
But I like to say that’s really a group of people in business trying to do the thing together and benefit themselves from what they put in and not extract from it to somebody else’s benefit. You don’t need a legal entity type that’s a cooperative. To be a cooperative and operate a cooperative. There is a tax definition for that.
There is a so many different ways of approaching it. But for me, it is this group of people that are benefiting from their own input into the collaboration they have.
[00:04:50] Anna: Can you give some examples of what extractive practices look like in non co op settings? So it really sinks into people’s mind what that means.
[00:05:00] Jacqueline: So if we, the three of us work together at Strange Birds and I put money in and the two of you do the work and when it’s time to make a distribution of profits or kind of surplus that you have at the end of the year, I get money because I put money in and you get some money because you put labor in. I’m extracting without doing the thing. I’m just, I’m getting more money because I have more because I already have money as opposed to. I labored for this.
[00:05:33] Anna: I, I think my path to learning about co ops was rather similar to yours where someone like dropped the word in somewhere in a conversation and I went, ooh.
Janelle has the benefit of living in Barcelona where co ops are everywhere.
[00:05:48] Janel: I think that there’s more of a collectivist attitude here in general because of a lot of just cultural factors.
The idea that we should be building and working within a system that supports the people within it is Not a radical idea here. And it is in the US in certain circles. And so the idea of co ops hasn’t taken as much hold.
[00:06:10] Jacqueline: Yeah. And even folks that come to the cooperative practice that are really certain that they want to see change is just so ingrained that we do this thing, we make money and we need other people’s money to make money to develop what we’re doing.
And we can be collective later by doing charitable giving and pro bono work and contributing to the community as opposed to, why don’t we just spread the thing the way it makes sense? Right.
[00:06:40] Anna: What are the things a company needs to have to operate as a cooperative?
[00:06:47] Jacqueline: I really love folks that come to me, like some I know maybe in the room with like, here’s what we do, we practice it this way, we make decisions this way, here’s how we share our resources. And then being able to put that on paper, it’s just so much more fun, interesting, more likely to be sustainable and really work.
So the paperwork is really what you need for another legal entity. You need by laws and operate in membership agreement. If you’re any type of corporation and if you’re an llc, you need a membership agreement and an operating agreement. That’s kind of the internal documents and then you file with the state articles of organization. So those are not terribly different from what you need in terms of, I guess, form for what you need to operate as a cooperative. In terms of content. You also. Some of this is just.
It’s different.
Right. We’re talking about how we make decisions together more in detail as opposed to we have a board and the board decides like this.
There are a lot of talks around tax. Tax is super important and super annoying and gets in the way sometimes because it takes a while to understand.
I don’t see success necessarily or to put a set of paperwork together when you’re not really into already the practices of cooperative. You’re already not opening your books, you’re already having that mindset of this is my business and this is how I operate. And now you’re a second person coming in and here’s how you’re. You need to adapt to it.
[00:08:32] Janel: I just love that. I hadn’t really considered, I just hadn’t thought about it before that.
To just like echo back what I think you’ve just said is that the most successful co ops start from like this kind of philosophical base. And like. And well, we are de facto operating like this because this is what matches us. This is the way in which we want to be a Co op. And then from there then they talk with somebody like you and establish this legal basis for, okay, we’re gonna write down the decision making process such that it works for us. And with you, maybe they’ll work out like some nitty gritty details that hadn’t come to light yet. But mostly it’s a reflection of things that they’ve already established as resonant with them rather than, I’m gonna follow the co op playbook and that means I gotta do A, B, C and D, right?
[00:09:17] Jacqueline: Yeah, yeah. And it can be super overwhelming when folks don’t know how you’re making decisions. Now I’m giving you all these choices and you’re like, how do I even pick from this? And it’s just so complicated. Versus I already have a really good sense, I can help you refine that.
And then there is even the folks that come with the heart in the right place.
They are attracted to the values of cooperative, the practices of cooperative, but have not done it and are very, have in their minds very ingrained, the typical way of doing business. And then it really feels like fitting a square peg in a round hole when they’re like, okay, but what about my seed round and my, I don’t know, like, why do we need a seed round right now? Or what does that mean in your situation? Because you’re bringing investors to take money out or to support your mission. And how does that look different from, from a traditional business?
[00:10:25] Anna: So you mentioned a couple things of operating as a co op. So kind of the activities that maybe you should already be trying to start practicing before you go hog wild and get an operating agreement.
I heard open books, decision making practices.
What are some other things that people could start if they want to experiment with co op? Like maybe start considering, yeah, I think.
[00:10:51] Jacqueline: Those are the big ones.
And then finding a, even a bonus program or some variation that takes in consideration the kind of the input. Those are the three things it’s sharing the profit, participating in governance and decision making and then being able to share the things that you don’t want to share in a traditional business. Right. It’s just how was the decision made? Kind of the sauce, right? Like who, who’s the powers that be that decided that this is the project or this is like the direction we’re going, the business goes well, we’re doing this together. So kind of getting to that place where everything is the doing together or everything that you think that an owner would do, you’re doing like you’re doing with your colleagues. And, and it’s spreading that through all the layers. It doesn’t mean that you involve everybody in all decisions. That’s kind of silly. It’s just finding who has domains and authority over things, kind of over the topics.
Sociocracy. Adopting like some variation of sociocracy is always a good way, I find, because everything you can have, you need to have in a cooperative, you’d have through that model. So kind of finding something that is open and collective.
[00:12:08] Anna: I’m betting 99% of folks listening to this don’t, maybe don’t know what sociocracy means.
What is it?
[00:12:18] Jacqueline: I’m going to butcher it.
[00:12:20] Anna: You’re going to do great.
[00:12:21] Jacqueline: It’s a decision making model that takes consensus and consent into consideration. So it operates with circles that overlap so they have their specific domains and they have links. It looks like making decisions in round, we talk through what are, what, what would be everything that gets in the way of making this decision. Can we address them now so they don’t become a problem? Or are we comfortable with this is safe to try type of decision?
[00:12:50] Anna: Is it fair to say for folks who are like, ooh, new word, gonna Google it.
Is it kind of like separating? If you’re in a bigger co op, you have more people than 10, let’s say I’m just throwing a random number out. It’s almost like subcommittees.
Yeah.
[00:13:10] Janel: That’s part of.
[00:13:13] Jacqueline: Is a way that a group might adopt it to break it down. But it is, I think it’s a way of reaching consensus. That might be a better way of putting what sociocracy is. It’s a model of getting to can we live with this decision? Have we all participated in making it and sociocracy specifically? They do have committees that they call circles that kind of. Each one of them have a specific set of authority. So I can make decisions up to this. And then after that there’s maybe a bigger circle that we are all participating in where we adopt this kind of round set of decision making. You all have a Quaker’s decision making, right. It’s not different than anything. You don’t have committees or do you?
[00:13:58] Anna: Well, there’s only two. So it’s a committee of us.
Yeah, we do the Quaker consensus model, which.
So both Janelle and I, we met at Earlham College, which is Quaker, and we learned about Quaker consensus making there and really fell in love with it.
So because strange birds, is our goal is not to become hundreds of people, hundreds of members in this co op. Maybe five, maybe 10.
We didn’t want to have a voting model because it would be a shitty thing to be the third person out of that said, no. So we want to do the. The Quaker decision model, which is, there is no voting. It is. We all come to an agreement, which is hard sometimes. I was in an acapella group in college, and we did Quaker consensus decision making for, like, who would sing the solo. It would sometime take us, like, two hours, but by the end, we were all like, yeah, that person’s gonna sing that solo. I’m gonna crush it. All right.
[00:15:01] Janel: I remember we worked with. For a long time. We were coming up with our agreement with you, Jacqueline, upon this specific point, it’s not that everyone has to be enthusiastically, hell, yes, this is the exact right path. We all want to go down this, like. But that you have to not have a serious objection that’s based off of your principles. I think it’s a principled objection. Right. That’s what we called it. So it’s not just about, like, well, I don’t. I don’t want that shade of blue for our logo because I don’t like it. But rather, I have a serious principled objection that this direction for our visual identity is going to be terrible for market. Whatever it is. Like, I’m. I have a worry that’s based off of something. And so it’s. It’s about coming to something that you can all agree is not going to run counter to what you believe, rather than necessarily, everyone has to be enthusiastic about it. I think people get that wrong about consensus because we’re all very different people. We’re gonna feel differently about things, but the way that we run it.
I can think of various decisions where we’ve. We’ve both given margin to going forward with something that we weren’t 100% enthusiastic. Yes. But we thought, okay, okay, let’s give this a go. And we. We wrote this into our agreement, and that was something that was so cool to work with you on, Jacqueline, to have, like, how do you put that kind of nuance into words?
[00:16:28] Jacqueline: Right. And then there are groups that really do want everybody to feel really good about it. And that might be a place where I’m stepping in and saying, hey, I’ve seen all these ways in which this becomes a problem. So can you get to a place here where feeling comfortable with the discomfort of the decision is okay, or getting to a place where it’s not just personal? You don’t have people to actually like and love this. They need to be okay with the potential outcome of this.
[00:16:58] Anna: Can you talk through why that’s a hard path to go down, wanting everyone to be super happy with every decision?
[00:17:07] Jacqueline: Because we’re all humans and you want to have two human beings that agree fully on something.
[00:17:13] Anna: Yeah, I think that’s why the co op model is so interesting, because it’s. It acknowledges that we’re.
[00:17:18] Jacqueline: Yeah, that’s right. Yeah, yeah. As soon as you set a cop model, it’s just like. Yeah, it acknowledges it. It acknowledges this is a human interaction and not like just a transactional relationship that we seem to be expected to have in a traditional business. You give me this, you get money for it.
[00:17:36] Anna: It’s just making me think about how our world right now functions so much in black and white. If you’re not with me f off forever, I never want to see you again. Right. And you have to be with me in this very specific way.
Versus, hey, we don’t agree on 100% of everything, but wow, the more we talk, we agree on 90% of things.
That’s pretty lit. Okay. We’re in the same path together. And I think that it makes me think of sometimes this model as kind of like a bomb.
Like, everybody calm down. Like, let’s practice some like, active listening and like, good conversation skills that I feel like we’re losing a little bit as a society. Okay, philosophical mini rant over.
[00:18:26] Janel: But no, but I think you’re really, you’re getting at something here. Like how. How do we build legal structures and business structures that allow for us to be messy humans within them? Right.
How do we celebrate the value of nuance?
And when we have to create things that are stable beneath it, when we have to create things that are tax compliant beneath it, it’s tricky but worthwhile, I think, particularly now.
[00:18:57] Jacqueline: Yeah, I think that’s really a appeal of the cooperative model that is healing.
The way we interact, the way we do business, the way we make decisions that should impact how we relate to each other. If we, if we can do this every day together and talk through things, we should be able to carry that also into our daily lives. That can allow us to live in community without fully agreeing on everything or being on the same page about every single thing.
[00:19:29] Anna: So that’s the human case for why co op model is great. Do you, do you want to speak at all about the business case? Like, the money side of like, why a co op is a good decision.
[00:19:41] Jacqueline: So cooperatives have a way better track record of not going into bankruptcy at surviving the foreclosure crisis for shared ownership models. So the cooperatives I’ve seen that have been successful can. Can get really large. So it’s not a small business thing that we need to make all those decisions together. They, they can get large while giving benefits to employees, while having people have a good set of retirement savings, which you do a lot in aesops. The rate for Aesop retirement savings is a lot higher than a traditional business. So people tend to stay longer in those businesses as well, and they feel ownership. And whenever you have people engaged and feeling like they own this place and they own what they’re doing, the outcome of business services, the goods, it’s good, it’s better.
[00:20:39] Anna: It’s almost like because it’s putting humans first and businesses are made with humans, it’s better overall. Interesting.
[00:20:49] Jacqueline: Who would have thought?
[00:20:52] Anna: I mean, part of our goal of this podcast is like, to convince people to like, maybe there’s a different way of doing business, so which can be anything.
[00:21:01] Janel: And it’s important to be conscious of the way in which those structures allow us to move or not to move. I think about this a lot on a community level, on an urban design level, on a chosen family level. And why wouldn’t I want the same at my place of work? You know, I was within big corporate and doing pretty well within like this predefined structure that somebody else made because they want to hit X and Y. KPIs, right?
But this is stepping out into the big void. I say this a lot because it feels that way. And suddenly we are the ones who are defining success for ourselves. And it feels like a co op model because it is by its very nature built around the needs of the people within it.
That is the most aligned with that desire that I have to live in a way that’s like cohesive with that.
[00:21:55] Jacqueline: For my firm as well. The way we’re not a cooperative. We do make a lot of our decisions together. I guess the way this practice has also impacted us is we can also practice law in a healing way. So it’s not just about the structures that we’re doing that help heal how we do business by practicing law in a healing way as well. So with boundaries, not just another attorney telling you what to do with your business. I’m somebody that is a thought partner helping you develop this set of relationships and adopt structures that are healthy. And boundaries are some of those. And that we also adopt those for ourselves.
[00:22:41] Anna: This is why when we wanted to hire a lawyer, I was like, janelle, I think we should just hire this person, Jacqueline. And she was like, okay, easy.
[00:22:49] Jacqueline: Yes.
[00:22:50] Anna: Easy.
[00:22:50] Janel: Yes.
[00:22:51] Jacqueline: It’s such a pleasure. You have Brazilian colors on your nails.
[00:22:55] Janel: Oh, shoot. I didn’t even realize. I don’t grab the green, but I’ve got the.
[00:22:58] Jacqueline: Isn’t it green? It looks green for me. Or green and yellow.
[00:23:07] Janel: Flying the Coop is brought to you by Strange Birds, a strategic messaging co op for businesses who care loudly.
From websites to onboarding flows, launches to long term strategy, find us at Strangebirds Land.
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