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New clinical initiatives at three law schools this spring will advance a pair of strong trends in New York state that see students delivering real-life legal services to clients at differing stages of desperation — women recovering from substance abuse and their children in need of affordable housing, and hard-working retirees slicked out of their life savings by crooked stockbrokers. This year, New York Law School and St. John’s University School of Law joined all the other campuses in the state in establishing securities arbitration clinics, each designed to help small investors reclaim as much as 80 percent of losses due to broker misconduct. The new clinics were seeded with $200,000 grants by Attorney General Eliot Spitzer from monies won in recent years from large global settlements of litigation against the securities industry. Existing clinics were given like grants to continue. Also this year, Professor George Hezel of the University at Buffalo Law School will see two more tangible results of what he calls a “movement” of young lawyers aiding clients at risk of homelessness: � In April, construction is set to begin on the 122-unit Cornerstone Manor Transitional Housing, adjacent to the Buffalo Niagara Medical Campus. Hezel and his students secured $9.3 million in financing for the facility, which will provide on-site medical, counseling and educational programs for women recovering from substance abuse and their children. � In August, a refurbished nurse’s dormitory in Niagara Falls will provide transitional housing to 19 families of women and children, as well as adult job training. The $5.6 million structure will be administered by the YWCA of Niagara and is to be called Caroline’s House, in honor of Caroline Van Schaik, a Niagara Falls lawyer killed in a car accident last year. She helped initiate the project. Hezel’s 16 clinic students act as counsel for the non-profit organizations behind the projects, organizations unable to negotiate the welter of legal work required to support their mission of providing shelter and fresh starts for poor people. “They just don’t have sophisticated counsel to do this kind of development,” said Hezel, who in his 17 years heading the clinic has overseen $150 million of investment in housing and counseling projects. “It requires knowledge of financing streams, tax credit equity, soft debt from state and local government and hard debt from commercial banks. Each one of these entities has a whole host of requirements imposed on the not-for-profit organization. It could swamp them.” The securities arbitration clinics, on the other hand, have received some rather sophisticated help. Or as Professor Aleta G. Estreicher of New York Law School put it, “Eliot Spitzer is our guardian angel.” The clinic, she said, “is something I’d hoped for for many years, and now he’s made it possible for us to serve people who’ve lost relatively small sums to the investment world at large, but devastating to them.” People with $100,000 or less at stake, said Estreicher, cannot obtain lawyers from private firms either because they are typically on fixed incomes or because the low contingency return against the firm’s time makes small investors an unattractive client group. But just like major investors, plaintiffs claiming broker misconduct must go to arbitration, in accordance with rules set in 1987 by the U.S. Supreme Court in Shearson v. McMahon, 482 U.S. 220. Assisting Estreicher as a visiting professor at New York Law’s nine-student clinic is Howard S. Meyers of Meyers & Heim, a securities litigation firm. “This is a wonderful opportunity for me to give back to the students what I’ve learned from government and private practice,” said Meyers, formerly a lawyer for the enforcement division of the U.S. Securities and Exchange Commission. “The students get real-world experience in arbitration before the [National Association of Securities Dealers] or, if necessary, the [New York Stock Exchange].” Professor Lydie N. Pierre-Louis of St. John’s Law was persuaded to leave the Attorney General’s Office — where she worked in the Investor Protection Bureau and there developed what she calls “quite a Rolodex” — to direct her school’s new securities arbitration clinic. In operation since August with eight students, selected from 72 applicants, the clinic has vetted 10 clients. “Most of them are senior citizens who were convinced by slick-talking brokers that their life savings could be doubled or tripled in a year,” said Pierre-Louis. “What happens instead is that in every case the savings are gone within a year.” Not all brokers are crooks, said Pierre-Louis, but the 10 percent who “play on people’s dreams” are frequently difficult to locate after they have fleeced a retiree. Personal greed, she added, is not the motivation the clinic’s clients are attracted to such investments. “They were trying to make some money to leave to their children or their grandchildren,” said Pierre-Louis. ELIGIBILITY CRITERIA Clients at the St. John’s Law clinic, like clients at the other campus programs, must meet certain criteria. Generally, the net worth of prospective clients may not exceed $300,000, excluding a home and primary vehicle, said Pierre-Louis. And because “we’re not trying to take away business from private practitioners,” she said, prospective clients must first be turned down for representation by three private lawyers. While the majority of costs involved in seeking redress from broker misconduct are born by the clinic, clients must absorb initial filing costs as well as consultation costs with arbitrators. In total, such costs may reach about $3,000. But the big-ticket items — expert testimony and damage calculations — are usually born by affiliated campus branches, such as a university’s business school. Today, Pierre-Louis and her counterparts at campuses around the state are slated to gather at Fordham University School of Law for the second annual Securities Arbitration Clinic Roundtable, an all-day forum. “It’s a chance for all of us to get together to discuss what’s working and what’s not,” said Pierre-Louis. “There will be a lot of discussion on funding issues, especially how to keep our clinics going beyond the two or three years we’re budgeted.”

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