Most businesses are looking for their next source of revenue, and even more so the newest source of revenue. In my work as a social entrepreneur, I’m discovering hot new practice areas all the time. For example, food litigation is one of those areas of practice that I predict will become as big as tobacco litigation in the next 10 years. On the corporate side, I’m surprised more lawyers and firms haven’t been actively promoting a new kind of company that millennials love–the B-Corp.
Before we get into what a B-Corp is, let’s look at important trends impacting our culture. As millennials come of age, they are participating in the economy in terms of spending, working, and innovating.
A recent Lexington Law article pointed out that by 2020, millennials will have $1.4 trillion in purchasing power. It also points out that 81% of millennials expect a brand to make a public commitment to altruistic causes and issues related to citizenship. Taking those trends into account, combined with my many conversations with the younger people in my network, it is becoming increasingly apparent to me that millennials are steering the economy, and the direction they are headed demands social and environmental responsibility from the brands they interact with and the companies they work for. There has also been extensive research on millennial-employment behavior. As the generation gets older and starts settling into leadership roles, money is not enough to attract the average 30-year-old to a permanent spot within a company. Millennials are overwhelmingly purpose-driven and need to see values aligned with the work they are doing. For these reasons, B-Corps present an opportunity to grow your practice.
A recent issue of Fortune magazine captured this paradigm shift perfectly, noting that “The modern world was founded on the assumption that our resources are infinite and inexhaustible.” Turns out that assumption was fatally flawed, and millennials understand this better than us old farts. A B-Corp, as defined by the B-Corp Handbook, by Ryan Honeyman, is a company that recognizes that our resources are not infinite and inexhaustible, that “the race to the top isn’t to be the best in the world but to be the best for the world.” They are different from traditional c-corps that you would be familiar with because they aren’t only about making money. This new breed of company is keen on benefiting society and the environment simultaneously because they realize that you can’t have infinite growth on a finite planet. Companies that serve people, planet and profit are also known as “triple bottom line” companies. As I indicated in the March issue, I’ve been making impact investments for seven years and see more acceptance and appreciation for social entrepreneurs and triple bottom line thinkers than ever before.
These trends are not lost on c-corps, either. A 2012 IFC study found that the Dow Jones Sustainability Index did 36% better over a 5-year period than the traditional Dow Jones Index. Tiffany Jana, CEO of TMI Consulting, noted that as of 2015, her business grew 800% since becoming a certified B-Corp. C-corps are taking note; there is good to be done and money to be made along the way.
State law, while ever-lagging, is catching on as well. According to B-Labs, the third-party non-profit that is responsible for certifying businesses as B-Corps, 34 states currently have enacted legislation that allows a business to prioritize non-traditional stakeholders in their decisions, and 6 more states have laws in progress. A lot of these laws are for statutory “public-benefit corporations,” which are technically different from certified B-Corps, but that is a topic for a future issue. More companies than ever want to be explicitly recognized as benefitting the world and are willing to embed this purpose into their legal DNA.
Your existing clients and brand-new entrepreneurs will need help navigating this new form of doing business.
In summary, here are the top seven reasons we think you should start a B-Corp practice:
- Improve recruitment and retention of top talent
- The trend is your friend: millennials want to buy from and work for companies that value purpose as much as profit
- Reinvigorate the culture at your firm
- Garner new revenue from a market with less competition [blue ocean strategy]
- You’ll be perceived as an innovator and thought leader
- Gain a new approach to existing clients and a novel calling card for prospective clients
- Legacy build: leave a world your grandchildren will want to live in by creating value for the planet and your community
Finding new sources of revenue is a key element that rainmakers can use to grow their practice. By discussing B-Corps with your clients and contacts, you may find that may are already engaging in triple bottom line work or would do so if they had the legal guidance to put the necessary systems in place.
I challenge you to start having conversations with your clients, your colleagues and your network contacts. Here are some questions to get you started: How much revenue are you generating from the work you do with B-Corps? How many of your c-corp clients are socially inclined, and which services could you offer them today if they decided to embed values into their existing legal structure? How is your firm attracting, retaining, and getting the best out of millennial talent that values purpose just as much as dollars? What are you doing to create the world you want to live in? What I’ve noticed about having these conversations is they generate lots of energy and excitement. And opportunity. As always thanks for reading.