July 15, 2020 – When we think of business law, we often think of business corporations or limited liability corporations and partnerships. But “cooperatives” are lesser known business entities, and there are fewer lawyers to offer advice on cooperative law.

According to attorney Jeff Glazer, that’s especially true in many rural communities, home to various agriculture co-ops of Wisconsin farmers who have banded together to create economies for their products.

“Attorneys in rural communities are just sort of aging out and they're not being replaced by younger attorneys and so that's a macro problem,” said Glazer, assistant clinical professor at the U.W. Law School’s Law and Entrepreneurship Clinic.

Glazer, also a partner Ogden & Glazer + Schaeffer, was recently a panelist on Working with Cooperatives in Wisconsin 2020, presented by State Bar of Wisconsin PINNACLE® and co-produced with the U.W. Law and Entrepreneurship Clinic.

The program (1.5 CLE), which will run as a webcast replay on selected dates in July and August, offers lawyers guidance on the ins-and-outs of cooperative law, including the foundational elements of what makes cooperatives distinct from other entities.

Glazer said the program sprouted after the U.W. Center for Cooperatives reached out to the U.W. Law and Entrepreneurship Clinic for legal help with cooperatives in the state.

“As part of a broader program that we have at the Law and Entrepreneurship Clinic called the Rural Entrepreneurship Project, one of our goals is to increase education on issues that are really important for rural communities,” Glazer said.

“Agricultural cooperatives, worker cooperatives, and broadband/utility cooperatives are super important to our rural communities so the more education we can provide for lawyers in those communities, the better those lawyers can support their communities.”

Cooperatives in Wisconsin

Although many agriculture cooperatives exist in Wisconsin, co-ops are not exclusive to the agriculture industry and can be found in three other major areas.

“Grocery stores are probably the most obvious example. REI, the outdoor equipment retailer is a cooperative and other kinds of retail cooperatives exist,” he said.

Unlike a corporation in which shareholder profits hinge on the value and number of shares held by the shareholder, members of a cooperative participate in the profits of the cooperative to the extent of their participation in the cooperative itself.

“In the example of a retail cooperative like a grocery store, if I'm a member of that grocery store, at the end of the year I get a check representing my proportion of the share of profits of my total use of the cooperative” Glazer said.

“A third major type are worker cooperatives. So this is where workers who are in a particular industry band together to provide their services under a common name,” Glazer said. “For example, here in Madison there's an engineering cooperative which is a bunch of engineers who all work together under the same name.”

As each engineer works on the project, that's their participation in the co-operative. They share in the profits of their worker cooperative to the extent they do work that is brought into the cooperative, Glazer said.

Glazer said utility cooperatives are a fourth major kind of cooperative – gas, electric, and telecommunications cooperatives.

“Broadband is a huge one that's becoming very active right now because rural communities that have community members that are familiar with the cooperative form are looking at the use of cooperatives in helping to take advantage of infrastructure.”

As cooperatives continue to operate and expand, especially in rural communities, Glazer said they will need lawyers to advise them on the business law issues.

“There's basically no lawyers in the state of Wisconsin who really generally understand cooperatives really well, or at least none that the U.W. Center for Cooperatives are aware of,” Glazer said. “If that's you, you should get a hold of them.”