Alec Karakatsanis and Phil Telfeyan have an inside view of how the U.S. legal system works from their posts as a public defender in Washington and a trial attorney in the Justice Department’s civil rights division, respectively.

The 2008 Harvard law graduates have been troubled by some of what they’ve seen, particularly when the quest for profits influences outcomes in the criminal justice system. So the two friends are starting a nonprofit civil rights law firm, called Equal Justice Under Law.

They plan to open for business later this year with financial backing from Harvard Law’s Public Service Venture Fund, a new program intended to help the school’s graduates found publically-minded startups.

Karakatsanis and Telfeyan are the inaugural recipients of the project’s seed grants, along with 2007 Harvard graduate David Wertime, co-founder of the China-focused website Tea Leaf Nation.

While many law schools offer stipends or grants for students and graduates to do public interest work, Harvard is the first to offer support for entrepreneurial-minded graduates who want to create their own public service-oriented projects.

The law school announced the fund in 2010, offering $1 million each year to graduate-backed start-ups and to send Harvard graduates to work in existing nonprofit organizations or government agencies.

Seed-grant recipients will receive $80,000 per year, with the expectation that the funding would be renewed for a second year. Harvard also plans to offer support services including assistance in securing nonprofit status, help with intellectual property and contractual issues, and social media mentoring.

“It’s an exciting feeling to have a project that is entirely something that Alec and I have created,” Telfeyan said. “We’ve been talking about this for years, and the venture fund definitely gave us a stepping stone to make it a reality.”

The selection process for the seed grants was rigorous, said Alexa Shabecoff, Harvard’s assistant dean for public service and director of the school’s Bernard Koteen Office of Public Interest Advising, which is directing the venture fund.

The selection committee looked for projects with the potential to make a significant difference without duplicating existing services; that appeared sustainable beyond the two-year grant period; and, most importantly, applicants who demonstrated creativity and passion.

“We’re really interested in people,” Shabecoff said. “What Harvard generates is great people, and we hope that we send our graduates with additional skills and ways of approaching problems.”

The effort is getting underway as traditional public-interest law groups are seeing their budgets squeezed and it is harder than ever for lawyers to secure money to start new projects, Shabecoff noted.

Of the inaugural projects, Equal Justice Under Law will focus exclusively on cases challenging what its founders see as problems within the criminal justice system that stem from profit-seeking—the proliferation of private prisons, for example, or police seizures of private property without due process.

Tea Leaf Nation is already 1 1/2 years old, but grant recipient Wertime said he hopes the monetary shot in the arm will help the site expand its reach. Wertime founded the project with two fellow Harvard law graduates in 2011 in hopes of bridging the gap between China and the West by providing in-depth coverage of China for both experts and casual observers.

The site’s writers keep close tab on Chinese social media to capture the sentiments of Chinese citizens and aim to demystifying life in China for readers outside the country. The site runs articles from writers inside China and from outside observers.

Wertime himself has spent time in China, both as a Peace Corp volunteer and as an associate at law firms in Hong Kong and Beijing. He left his job at Milbank, Tweed, Hadley & McCloy to pursue Tea Leaf Nation full time.

“It will be nice to have some salary,” Wertime said of the seed grant. “This has been a labor of love. It’s fantastic to receive this recognition and support.”

His legal background has proven useful in running the site, even though law is not its focus, Wertime said. The law school decided not to limit eligible projects to those doing traditional public-interest law, Shabacoff said. It also declined to set a cutoff for eligibility based on the applicant’s year of graduation.

Organizers were unsure of how much interest there would be in the seed grants, but they expect the number of applications to grow as word gets out. They plan to select a new crop of gradate entrepreneurs annually.

“This is really a marriage of helping our students and harnessing their creativity at a time when the economy really needs it,” Shabecoff said. “It’s been really exciting to see.”

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