Representing B Corps As a Lawyer
My firm, P Miller Legal Services APC, will be rebranding as Impact Advocates later this year, and we hope to obtain our B Corp Certification around then as well. We focus on working with B Corps and other social impact companies that need effective counsel to help them navigate their legal disputes.
Given my firm’s focus, I often speak with other B Corp lawyers that concentrate on similar issues. Recently I spoke with people from Barriston LLP about representing B Corps.
Joanne McPhail, Managing Partner at Barriston LLP (the first law firm in Ontario to be B Corp Certified, and third in Canada) acts for several B Corps as a corporate commercial lawyer. She says working with B Corps is a true pleasure, and requires some out-of-the-box thinking.
“B Corps care about more than just shareholder return, so we have to look at all the angles when giving advice: How will the agreement or transaction impact the company as a whole, including the employees and the customers and the wider community,” McPhail says. “Often these things all align in the decision-making process; however, sometimes transactions can be modified, or one buyer is chosen over another not because of price but because of the overall impact. For instance, I recently saw a seller take the second-highest bid on a share sale, because the buyer would continue on with the staff, retain the culture of the business, and honour its history.”
I often say that we focus on working with B Corps because we want to ensure that our time is spent advocating for those companies whose values we share — that we’re fighting for the people who actually deserve it!
Many law firms focus on putting together commercial agreements or forming public benefit corporation entities. My firm focuses on what happens when a deal falls through and the parties need to enforce their contractual rights. One interesting feature of representing B Corps is that you often find that their commercial counterparties are also social impact entities. This presents some unique challenges as well as potential opportunities.
One challenge is the fact that maximizing your client’s position against another social impact company could end up affecting that company’s ability to achieve its impact, which would potentially harm their beneficiaries. But our role is to act as an advocate for our client and maximize their position. Thankfully, it can often be the case that the best advocacy during a commercial dispute is facilitating a negotiated settlement between the parties where everyone comes to a solution that is reasonable under the circumstances. This way the parties can avoid an acrimonious, and costly, adversarial process like litigation or arbitration.
When the parties are both social entrepreneurs, this can sometimes increase their chance to come to an equitable compromise as they both have some common ideals they share. Although this is not always sufficient to avoid a dispute, sometimes the best option is winning an arbitration and maximizing your position.
With respect to the importance of law firms choosing to become B Corps, Rebecca McFarland, Culture & Operations Manager at Barriston, adds that it’s important to have B Corps in all industries to demonstrate that companies that provide services rather than products can prioritize sustainability and ethical practices.
“B Corp is about being a better business in all aspects, including the impacts you have on staff, clients/customers and your communities,” McFarland says. “By being a law firm that chooses to embark on the B Corp process, or specialize in working with B Corporations, we’re giving people the ability to choose to vote with their dollars, meaning they suddenly have options they may not have had before, to support service companies that share their values. I think it also shows leadership in the social shift of doing business —choosing to weigh more than just profits when making business decisions.”
I couldn’t agree more with this sentiment, which is why I’m looking forward to finalizing my firm’s B Impact Assessment later this year. It’s a challenging process, but it really allows you to lay foundations for the future that engrain impact into your company DNA. For example, the B Impact Assessment encouraged my firm to consider how we would foster impact among our employees, in particular by ensuring that our employees’ impact was measured and rewarded during our annual performance review.
Written by Patrick Miller