Karen Harned: Executive Director, NFIB Legal Foundation, Washington, DC
By Regan Morris
Small businesses comprise the economic engine of the United States. As executive director of the National Federation of Independent Business' Legal Foundation, attorney Karen Harned helps the country's entrepreneurs understand the law, cut through legal red tape, and stay out of court.
The NFIB Legal Foundation calls itself "the voice of small business in the nation's courts." The foundation is a nonprofit organization affiliated with the NFIB, a trade association.
Harned, who is based in Washington, DC, spoke with LawCrossing in Burbank, CA, during a brief lecture tour of the West Coast, where she met small-business owners and helped them learn "how to stay out of court."
There are so many regulatory hurdles for small businesses now, and the situation is only getting worse, Harned said. Harned's job is to educate and litigate on behalf of small business. The foundation is not a legal-defense fund, and litigating is done by outside counsel.
"We represent small-business owners collectively—the small business market—so we'll go in on a brief and say, 'This issue impacts all small-business owners,'" she said. "We always try to let the judge know what the collective small-business perspective is on an issue."
Harned says a big part of her job is trying to get the message out that mandates and too many regulations destroy small businesses. Lawmakers and regulators, she says, quite often miss the big picture. What's one more form that should only take an hour or two to fill in? But the forms keep adding up; and businesses are drowning in a sea of state, local, and federal red tape, she says.
The daughter of a corporate attorney, Harned grew up in Oklahoma and said she knew she wanted to be an attorney since she was in high school. Politics was also a strong draw; and during college, Harned interned for State Senator Don Nickles, eventually becoming his assistant press secretary.
Nickles, who went on to occupy a seat in the U.S. Senate from 1981-2005, was a small businessman fed up with the red tape in Washington, DC. Harned was heavily influenced by his passion for helping small business and made it her own personal cause.
After graduating from The George Washington University Law School in 1995, Harned worked as an associate at Olsson, Frank, and Weeda, P.C., where she specialized in food and drug law. During her time at the firm, she represented several small businesses and their trade associations before Congress and federal agencies.
"I was always aware of small business before, but it was when I got to D.C. and heard Senator Nickles talk and just saw what was going on with the regulations and talking to constituents [that I realized] it's such a broad problem," Harned said. "It really impacted me and made me want to be part of the solution, not the problem."
Harned says she got "Potomac fever" when she arrived in Washington, DC, and urged attorneys interested in small-business law and policy to move where the laws are made. But, she added, there are opportunities for attorneys everywhere to help small businesses understand and comply with the laws. By getting to know small-business owners through communities or trade associations like the NFIB, there's no shortage of potential clients.
The NFIB has 600,000 members nationwide. During Harned's lecture in California, many small-business owners complained that they were faced with insurmountable insurance bills and the threat of frivolous lawsuits. The NFIB says national surveys show health insurance, business insurance, and workers' compensation insurance are the top-three problems small-business owners complain about. Across the nation, entrepreneurs say they either can't afford or access various kinds of insurance.
Frivolous lawsuits are another problem for entrepreneurs, and Harned advised businesses to find an attorney they like and trust now, before they need one, and document everything so that a business has a paper trail and evidence if a disgruntled employee or unhappy customer files a frivolous lawsuit.
Harned says some attorneys target small businesses because they know the entrepreneurs are likely to settle for fear of racking up large legal bills and losing time from their business.
Although the Legal Foundation does not dispense legal advice to individual businesses, it is growing and may do so in the future, Harned said. For now, it compiles legal tips in educational booklets for NFIB members who might need advice.
The Legal Foundation has had many recent victories, but Harned says the red tape for businesses is only getting worse. The Legal Foundation says there are more than 75,000 pages of federal regulations that cost Americans in excess of $840 billion. The Legal Foundation tries to keep track of all the rules and alert its members about laws important to small businesses.
"I feel like I kind of have the best of all the worlds, because I really feel like I get to do charitable work, we are a charity, and I get paid for it. And it's a constituency I believe in and I really feel is vital to the nation," Harned said. "Because that is who is employing most of the people across the country—small business. And they're coming up with the new ideas and the new services; and, again, anything I can do to ease their burden is just very rewarding personally."
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