Morrison & Foerster is a committed participant in the social enterprise and impact investing space – a position we have championed for more than 20 years. Our team across our corporate, finance, tax, patent, and licensing practices is passionate about solving the world’s biggest problems through creative business models and mission-focused investments. We have long recognized that impact investing and social entrepreneurship have unique legal challenges, as investors, companies, and organizations determine how to embed social and environmental missions into governing documents, investments, and business strategies.
Our practice supports:
We are widely recognized for our work in this sector. Practice group co-chair and partner Susan Mac Cormac was honored by the Financial Times in 2015 as the Most Innovative North American Lawyer for her work championing legal innovation for social enterprises and impact investors and was named by California Lawyer as Attorney of the Year in 2012 (for creating a new corporate form, now the Social Purpose Corporation) and in 2016 (for impact investing and sale of Imprint Capital to Goldman Sachs). The Financial Times recognized MoFo again in its 2016 North America Innovative Lawyers Report as joint winner with firm client NPX Advisors for structuring the world’s first Impact Security, and we were recognized once again in 2018 for our work with The Carbon Endowment to reduce carbon dioxide emissions while supporting communities adversely affected by the clean energy transition.
Our experience includes:
Our impact team believes that the corporate form has the power to effect change. Our lawyers work with clients to blend social and environmental missions into traditional corporate forms, particularly corporations, through use of protective provisions, information rights, and shareholders agreements, and into LLCs through negotiated language ensuring mission focus and reporting. We also advise on the formation of and conversion to new legal forms, such as the Social Purpose Corporation (California), the Public Benefit Corporation (Delaware), and other forms of benefit corporations that allow companies to pursue social and environmental purposes in addition to promoting shareholder profitability.
Many impact-focused clients have relied on our team to create sophisticated “hybrid” or “tandem” structures with nonprofit and for-profit entities that are closely tied through equity ownership, funding, or contract. We have helped clients scale their missions through creative structuring, such as establishing a joint venture between a for-profit and nonprofit, structuring a fund using both for-profit and nonprofit entities, establishing a nonprofit subsidiary of a for-profit, and many other iterations.
We also specialize in representing “impact” investors, from those that focus on impact first but expect to generate returns in the long term to those that prioritize returns but want to ensure positive social or environmental impact and/or mitigate negative impacts. We counsel clients in structuring debt, equity, and program-related investments to incorporate mission and measure, verify, and report on ESG factors in a way that is commensurate with financial reporting. Our team also provides guidance to private equity, venture capital, and hedge fund investors who consider ESG issues in mainstream investments.
Our impact fund team represents a spectrum of investors – from family offices to foundations to private equity and hedge funds – on developing the most effective structures to aggregate and deploy capital. We advise on mechanisms for investment funds to focus on ESG factors, tailoring our recommendations based on the social and environmental missions of the firm and its investor base. We also help structure collaborations between fund sponsors and impact-focused organizations for the provision of technical and advisory experience in connection with investment decisions and portfolio oversight.
Our team helps clients identify the most material ESG issues for each company and provides complex counseling on ESG matters in the private and public sector, including fiduciary issues, corporate governance and reporting, shareholder activism, human rights and supply chain, and ESG risk analysis, due diligence, and strategy. We help design effective strategies to reduce legal exposure and reputation risk, as well as identify opportunities for differentiation.
As mainstream companies enter the impact space through a merger or acquisition, our team helps to protect the social and/or environmental mission following an M&A transaction. We advise on the use of a new corporate form (such as the PBC or SPC) for the subsidiary post-acquisition, composition of an impact committee at the parent company to advise on impact-related activities, tying impact to earn-out and options for management, and the metrics, measurements, and reporting of impact performance.
Social enterprise and nonprofit clients include:
Impact investing clients include:
Committed to furthering sustainability, MoFo also proudly serves as a lead founding firm of the Lawyers for a Sustainable Economy, a first-of-its-kind initiative to advance sustainability around the world. Through the program, we have committed to providing free legal services worth at least $2 million by 2020 to entrepreneurs and community-based nonprofits taking on key sustainability challenges.
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