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The power of Krispy Kreme donuts: a new model for corporate social responsibility?



Recently, the BPP Pro Bono Unit, which is extremely active and successful at BPP in delivering on legal pro bono schemes in the community, sent out the following brief message:

“Krispy Kreme doughnuts are being sold to raise money for Liberty tomorrow (Thursday) between 12 and 2pm in the foyer of BPP Holborn – enjoy!”

Needless to say the event proved to be very popular indeed! Interestingly, Emine Saner has recently written an article on how Britain has fallen in love with Krispy Kreme doughnuts. Her article from yesterday is here.

This week, the North Carolina-based chain announced it would be doubling the number of its outlets in the UK to 100 over the next five years, on the back of growing sales, with revenue up 12.6% and serving 5 million customers. The next will open in Leeds next month. There is no doubt that Krispy Kreme take their fundraising activities extremely serious in the UK. In the light of withdrawal of public funding for many walks of life, including legal services, this is especially important.

Their UK website gives a very inspiring description of their activities,

Need a more interesting way to raise money for your charity?

Whether you are a charity looking to raise money at a specific event or an individual looking for a different way to hit that sponsorship target, Krispy Kreme’s fundraising scheme is here to help.

From early on in our history, Krispy Kreme has supported charities and played an active role in the local community. We know that it is increasingly difficult to simply ask people to make a donation, which is why our scheme allows you to sell them something they’ll love, our doughnuts, whilst you make a profit for your charity!

Link here: http://www.krispykreme.co.uk/fundraising/raise-dough/

From a business point of view, here in the UK, they are stocked in Harrods and Selfridges as well as  there is also a less glamorous retail side. There are kiosks in motorway service stations, and in Enfield. In the UK, all stores are company-owned, but in the US, most are franchises). By the end of the 90s, the company had gone national, and in 2000 it was floated on the stock exchange. Over the next couple of years, the company expanded rapidly, including internationally. They spent little or no money on advertising, relying instead on word of mouth and giveaways.

Emile Saneer gives a very interesting of the marketing strategy, in relation to the strategic operation of Krispy Kreme. MBA students at BPP are currently studying in detail strategy and organizational behaviour. Saneer provides (in an article in the Guardian lifestyle section) that,

playing its part in the drive to get Americans to the polling booths during the 2008 presidential elections, Krispy Kreme outlets rewarded those who had cast their ballot with a free doughnut. To celebrate Barack Obama’s victory, the chain offered punters a free coffee with its very own piece of coffee art – an image of Obama in the foam – rebranding the drink “The United States of Americano”.”

 

This arguably extends further the concept of ‘corporate social responsibility’, seeing greater involvement between private companies in the private sector and charities in the third sector. For example, “Advice for Good” (4th June 2011) provides that,

“In this article in the Vancouver Sun we discuss an emerging type of partnership between charities and companies: affiliate marketing.  This mutually beneficial arrangement provides charities with access to funding and businesses with new customers and promotional opportunities.  It is a creative way for charities to get private sector funding and it goes beyond the typical corporate social responsibility (CSR) and community investment support. There are an ever increasing number of charity-corporate affiliate marketing partnerships, with companies including Ben and Jerry’s and Krispy Kreme getting on board.  With high demand among charities for corporate charitable contributions, affiliate marketing is a creative way for fundraisers to redefine corporate partnerships.”

 

Will opposites attract?



Lawyers in training often become bewildered as to how parts of their course ultimately gel together. This possibly contributes to their uncertainty in choosing which part of the law to specialise in. For example, how on earth does constitutional law, including the rule of law and human rights, relate to the different specialisms of law, such as immigration or housing? And what have they got to do with the big powerhouse corporate law firms, if anything?

A surprising fusion of these ingredients could hold the key to solving a different problem that has been vexing English and Welsh law for several decades, at least. That is, the issue of what to do about the provision of legal aid.

A community law centre, where the lawyer might examine a sensitive landlord-tenant dispute, may seem ‘worlds-apart’ from the work of a corporate lawyer, who may be advising on a multi-billion-pound, headline-grabbing deal. However, it is possible that these circles might mix more in future, due to the current circumstances.

Access to the law: back to the basic constitutional law

One of the very first things that law students focus on in their constitutional law courses is the ‘rule of law’. Indeed, the rule of law underpins the work of both ‘divisions’ of lawyers: the barristers and the solicitors.

In 1977, the influential political theorist Joseph Raz identified several principles that may be associated with the ‘rule of law’ in some (but not all) societies. Some of Raz’s principles include the fact that the courts should be accessible, i.e. no man should be denied justice, and that the principles of natural justice should be observed, particularly those concerning the right to a fair hearing.

And what of the actual reality of today, in England and Wales?

“The Government strongly believes that access to justice is a hallmark of a civilised society. The proposals set out in this consultation paper [on the reform of legal aid] represent a radical, wide-ranging and ambitious programme of reform which aims to ensure that legal aid is targeted to those who need it most, for the most serious cases in which legal advice or representation is justified.”

‘A brief history of legal aid’

Legal aid in England and Wales was originally established by the Legal Aid and Advice Act 1949, with the aim of providing equality of access and the right to representation before the law. The scope of legal matters covered in 1949 was very tightly drawn.

However, today legal aid in England and Wales costs the taxpayer £2bn a year – a higher per capita spend than anywhere else in the world. It is argued that the current scheme is available for a too wide a range of issues, including some which should not require any legal expertise to resolve. The provision of legal aid is now governed by the Access to Justice Act 1999 and supplementary legislation.

The possible effect of the proposed legal aid reforms

Many civil cases will no longer be eligible for legal aid, and fees paid in civil and family cases will be cut by 10% across the board, according to Ministry of Justice plans set out in the consultation paper, “Proposals for the Reform of Legal Aid in England and Wales”, released in November 2010.

The UK government has estimated that, under the plans, £350m will be saved from the Ministry of Justice’s budget by 2014/15, if its proposals are implemented in full.

Ken Clarke QC MP, the Secretary for State for Justice and Lord Chancellor, has said in an interview that,

“I believe that the taxpayer should continue to provide legal aid to those who need it most and for serious issues. But the current system can encourage lengthy, acrimonious and sometimes unnecessary court proceedings, at taxpayers’ expense, which may not always ensure the best result for those involved. The proposals I have outlined suggest clear tough choices to ensure access to public funding in those cases that really require it, the protection of the most vulnerable in society and the efficient performance of the justice system.”

Reaction from the solicitors

The cut in legal aid may offend the rule of law. For example, the Law Society Chief Executive, Desmond Hudson, has warned that:

“If the government persists with these proposals, it would represent a sharp break from the long-standing bipartisan consensus that effective access to justice is essential to underpin the rule of law. Legal aid clients are some of the most vulnerable in society and good legal representation where required is essential if they are to obtain justice. The Society will now consider the green paper in detail.”

The effect on the high street – the community law centres

Law Centres’ employ solicitors and case-workers who specialise in debt, discrimination, housing, employment, welfare benefit, community care, mental health law, and immigration and asylum law.  Their initiatives are truly inspirational.

In an open letter dated October 2010, Julie Bishop, Director of the Law Centres Federation, provides a very interesting description of the impact that the financial recession – a possible driver in the need to cut costs in legal aid services – has had on the high street legal services:

“We serve 120,000 clients every year. The recession is hitting our clients hard. Already, the Employment Tribunals Service has recorded an increase from 10,800 to 19,000 in the number of cases related to unfair dismissal over the past year [October 2009-10]. ACAS has recorded a 13% increase in enquiries for conciliation services.  Law Centres have experienced a 30% increase in clients assisted with employment and discrimination cases.”

An example of where the Law Centres have made a substantial impact is in Brent. Brent Community Law Centre stated that the cuts to legal aid will leave two options for those in poverty on Jobseeker’s Allowance: “a move from poverty to extreme poverty, or possession or eviction if they do not pay their rent.”

They cite that a single person living in a one-bed flat paying £180 per week will have to contribute £18 to the rent out of a weekly income of £65.45, leaving £47.45 for all other expenses including fuel. A separate (but linked issue) which compounds vulnerability is the proposed capping of housing benefit. It is estimated that this will cost claimants in Brent an average of £8,817,844 per year. This loss is to be shared among 1,988 claimants. If their rents are not reduced, they will have to pay £4,436 per household out of their own income. Currently, the Brent Law Centre is able to advise on this issue.

Brent Law Centre argues there will inevitably be far more possession cases in the county court because landlords, whether council or private, will bring court action for rent arrears. In addition, they believe that the impact on costs for other departments, such as social services and child protection need to be assessed.

Brent Law Centre, only through the goodwill of an army of unpaid volunteers, is currently able to provide legal advice and assistance for residents of Brent on a range of legal issues including education, employment, housing, immigration, mental health, public law and welfare benefits.

An unlikely solution?

It has not gone unnoticed that one of the effects of losing £350m from the existing £2.1bn budget may be to put corporate law firms under greater pressure to contribute to the provision of legal aid.

High profile pro-bono interventions by the household names in corporate law can become tied to big international events  – such as helping out at the Sierra Leone war crimes tribunal (Weil Gotshal & Manges), or representing wounded soldiers in compensation cases against the Ministry of Defence (Hogan Lovells).

Nonetheless, doing pro bono has become attractive to graduates in an increasingly competitive job market, where law firms are keen to attract the best graduates, and graduates are keen to demonstrate their social awareness.

However, it is true that many newly-qualified graduates do contribute much time for free to the local community, often in very deprived areas, but find the work immensely fulfilling. This is despite the fact that their Managing Associates and Partners will not tolerate any compromises in their professional ‘day job’.

Who knows where this is heading?

The ideal outcome might be for a restructuring of legal aid services, such that the public and lawyers have a clear idea where the money is going to, and which enables fair access to legal services for the public. The crunch question inevitably becomes: “where this money is coming from, if it’s not the taxpayer?

Brent Law Centre is just a single example of where professional lawyers give their skills free-of-charge for the benefit of the community, but it would be tragic to see a situation where lawyers cannot even do this because of the ‘system’.

It might be, even, that the corporate lawyers have a crucial part to play for the benefit of society, in contributing towards the maintenance of legal aid in the high street law.

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