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New Law: How investment in culture and people fosters innovation, collaboration and client service

Originally published on September 5, 2018 on Medium.

How does a law firm, known largely as a stagnant institution, nurture a culture of trust, openness, entrepreneurship, resilience and collaboration? Read on to learn how we are liberating ourselves — from the clock and the obligations of client matters — to focus on the meaningful and necessary work of building a durable culture, adding value to clients, and propagating positive social and environmental impact. Much of what we are practicing, as described below, is experimental and still evolving. This is our best effort to practice what we preach.

I had never given much thought to what it takes to assemble a top-flight team of values-aligned, talented, dedicated and compatible people although I’ve been fortunate and privileged to have both served on and helped assemble such teams. Our current team, assembled over the course of 1.5 years, is the most awesome (in every respect) amalgamation of backgrounds, passion, talent, and dedication that I have ever thought possible. To be honest, that this team has come together at all feels as much happenstance as serendipity. I know now, however, that there are carefully nurtured and delicate dynamics at play.

Our whole team recently came together in Boulder, Colorado for a 2-day retreat. We put up out-of-office memos, we turned off the phone and we informed clients and strategic partners that we would be inaccessible. For folks who still largely inhabit a world where “time is money,” this kind of planned down-time is relatively rare. Throughout our time together, we discovered we are rare in many respects.

I. Open Book Collaboration

Over the last year, I have been slowly opening up the books of the firm to our team. I started with a 2017 year-in-review. I went over our high-level financial performance, key metrics and qualitative aspects of our practices and performance. This was an opportunity to tell the arcing story of the firm’s history, the ebb and flow of various campaigns and big projects, and to use the financials as a canvas for telling the richer story. I was struck by the level of engagement and the curiosity of the team. For some, it was the first time they were ever exposed to financial statements at all, let alone those that affect their own employer.

I followed up this year-in-review with a set of 2018 projections. The most exhilarating part was when I…drumroll please…unveiled our “Moonshot.” By this point, three members of our team had only been with the firm for less than two months. How cool! To start a brand new job and to have a front-row seat to an organization’s launch point for the moon. To be clear, we were not a start-up at this point. This presentation took place around the 4-year anniversary of the firm. For most of that time, the firm had been just me and one or two part-time contract attorneys. I gave this presentation to six people. From one to six team members in less than one year. That’s a lot of growth!

Like most moonshot goals, we set ambitious goals for the next 4–5 years. I confessed not having a clear picture of what strategy or tactics we would employ to reach the moon. I only knew that the moonshot had to be inspiring, credible and imaginative. To my surprise, it was…for all six of us. That was one of the first real signs I had that we had the right people.

II. Collaborative Goal-setting, visioning and strategic planning

I more or less set the 2018 goals and strategy by fiat. The team was too nascent and without historical context to engage in collective planning. Plus, we were planning for a merger with the law practice of Linda Phillips. Thus, there were too many “unknown unknowns” to go through a strategic planning process for the 2018 fiscal year in early 2018.

So, with early 2018 strategy and goals presentation as a backdrop, we hit the ground running at the 2018 firm retreat. I gave a summary review of the 2018 year-to-date. I refreshed everyone’s memory of our 2020 moonshot and I presented a model for what the launch path would look like to achieve it. This gave the context everyone needed to fully and meaningfully contribute to a strategic plan.

We spent the better part of two days engaged in the profundity of firm culture, client screening, business development, vision and values and strategic planning. Some of us confessed our predisposition for “passion and purpose fatigue.” Some revealed a rejuvenated motivation to tackle big, thorny social and environmental issues, including climate change, economic inequality and social justice. Ultimately, we bonded over our shared sense of purpose and our commitment to our core values.

I have been deeply impressed and touched by the occasions and experiences that remind me of the timeliness of our core values. I developed those as a solo practitioner and entrepreneur, back in 2014, long before I knew 4 of my 5 fellow team members. We explicitly revisit and discuss these core values every week on our team huddle.

We re-committed to the moonshot goal. The energy of the retreat hardened our commitment to our team and to our purpose. To get there, we knew the challenge would be strategic planning in an environment where we, not unlike most businesses, are not fully in control of the key inputs. We divided up the pillars of our core business — Internal Relationships, Business Development, Client Service, Internal Systems (tech), Internal Systems (processes), and Inclusivity and Diversity — and assigned each component to one team member. We follow the Todoist model of accountability — every task must have a direct responsible individual if it is to be done.

For each strategic plan component, we are following a standard 1-page format that involves:

· A vision statement.

· 3–4 high level elements of the component plan.

· 3–4 high level goals per element.

· 3–4 key performance indicators for each goal.

Each strategic plan component can include tactical detail in endnotes or subsequent pages.

Over the next 5–6 weeks, we will rotate presenting on drafts of each of our plans, providing feedback, iterating and ultimately consenting to the final assemblage of the plan.

We will be experimenting with a few new things:

· We will budget for conferences and events up front and allow team members to self-select which conferences they want to attend, with input from the team.

· We will budget for firm-wide and individual training. Each team member will have a time and monetary budget that they control. The aim is to increase competence and interdisciplinary knowledge and experience.

· We will budget for innovation and technology. Team members will have individual budgets they control for experimental projects and technology, to make the most of each team member’s creativity.

III. People Policies and Work Expectations

We hired our first employee in June of 2018. Despite having long practiced employment law, it is quite different to be an employer than to advise employers. I found myself in the seat that our clients usually occupy. I had to get comfortable with all that hiring employees entails; payroll, fixed costs, workers compensation, leading, supervision, and, most importantly, creating a culture and work atmosphere that enabled the highest contribution from people.

To do this, I resolved certain things:

· First, I would resist the inimical truth that setting compensation is an inherently imperfect science. I made the typical “negotiation” process collaborative, open and transparent. I showed prospective employees all the numbers and the revenue and cost model for the position. Their contribution and commitment is valuable to me and the firm and I want each team member to know that.

· Second, I didn’t want to baby-sit employees. I wanted to only hire people I trust unconditionally. I wanted to set each employee free to do their best work and to be happy. I tell team members that they can work any time, any where and in just about any way that suits them, as long as they get the job done to their highest ability given the circumstances and resources available. One team member chose to work while visiting a friend in Scotland. Another worked remotely from South Africa while visiting family.

· Third, I wanted to practice what we preach. The conventional 2080 work hours/year is…unworkable. It roughly translates into more awake time at a desk than with family. This is not how I choose to live my life, and so it would be hypocritical to impose this on co-workers or employees. Therefore, we set an expectation of a 1600 hours of work/year. Not just billable hours; that’s total time. This translates into approximately 31 work hours per week for 52-weeks, or 33 hours per week for 48-weeks. What employees chose to do with their time outside of the 1600 hours is up to them. We expect our team members to recharge themselves and to take time away. We put in place safeguards against burn-out.

· Fourth, we mean what we said in #3. We have an unlimited vacation policy. As long as employees meet expectations and add value to the firm according to prescribed metrics and quality goals, our team members are in control of their time.

· Fifth, we pay at or above market rates to our employees and contract attorneys. I regularly review market data for firms of our size, practicing in comparable areas of law, and practicing in similar geographic regions. We provide health insurance to all full-time employees, a 401k plan, paid professional development, a remote work stipend, and paid access to a rich technology platform for collaboration.

· Sixth, we create the conditions for innovation and entrepreneurial risk taking. By maintaining flexible and reasonable work expectations, we can afford to enter into creative and alternative fee arrangements with clients. We are experimenting with fixed fee, monthly subscription models, and other non-time-based billing practices. Our aim is to enhance value to clients while creating a fun work environment.

Leaving a Legacy: Creating a Social Enterprise that Outlives Its Founder

More and more, entrepreneurs and investors want more than just a buck:  they want to create a business with a social mission, then preserve that entity’s mission through time. This blog post briefly discusses three ways to keep a business entity on purpose long after the founders have left.

The first way is to borrow a page from much of the rest of the world and use “golden shares.” A golden share is a share with special voting powers greater than the other shares. To illustrate that power:  threatened with a takeover or acquisition that jeopardize the entity’s mission, one golden share could veto the transaction.

While we recognize that golden shares are hardly used in the U.S., we see potential. Our research indicates that the broad, powerful Delaware corporate law (the “gold standard” for U.S. corporations) has the flexibility and breadth to allow golden shares. Case law suggests that golden shares are permissible if they were created for an equity holder at the outset of the transaction.

 

second way to leave a legacy is through a Public Benefit Corporation. The very act of creating a public benefit corporation creates a high level of protection for the entity’s social mission; to delete or amend an entity’s public benefit statement or purpose would require approval of two-thirds of the outstanding stock of the corporation entitled to vote.

 

 

 

A third vehicle for preserving a company’s social mission is through a “perpetual purpose trust.” The Hershey Company, for example, has historically supported kids in financial need. Hershey does this through a purpose trust worth about $12 billion. The mechanism of the Trust’s control is fairly straightforward:  “The Trust owns about 8 percent of the chocolate company’s shares, but because of a dual class stock arrangement it controls about 81 percent of the votes.” This voting power allowed Hershey to reject a $23 billion takeover bid from rival candy maker, Mondelez.

Preservation of an entity’s long-term social agenda is a good thing. Jason Wiener|p.c. has partnered with other thought leaders on this topic (see, for example, Armin Steuernagel and his white paper on steward ownership). Our work-group plans to publish resources for the purpose-driven enterprise; sign up for our email alerts and we’ll let you know when it is available.