In the current sociopolitical environment, many companies are shying away from publicly talking about and celebrating impact work. Yet for most private companies, the legal risks from maintaining values-driven policies are “remarkably low,” says B Corp law firm founder Jim Black. “The reality is that most private companies are not directly affected by actions at the federal level or state actions meant to undermine ESG and DEI policies,” he says. In this article, Jim shares his perspective on legal risk, telling our stories, and how we can use individual business growth to expand the impact business movement and ultimately reshape the economy.
After careers spent in corporate law firms, in early 2024 B Corp co-founders Jim Black and Julie Ryan launched their impact-focused law firm, Impact GC, to further their personal mission of helping make business a force for good, operating with a triple-bottom-line approach and helping mission-driven clients of all types pursue their important social, environmental and governance aims.
“We had two core commitments in starting Impact GC,” Jim says. “One was that we were committed to being a B Corp ourselves, so we designed the firm around those principles. The second was that we wanted to serve B Corps and other mission-driven businesses, because that is a primary way we have a positive impact.”
Impact GC defines its internal impact in two key ways. The first is in its internal culture, which emphasizes a healthy and sustainable work environment for everyone who joins the firm – “a lot of excellent lawyers want to do great work for clients they care about in a way that supports healthy, sustainable lives,” Jim says. The second is through a focus on serving community – doing “a lot of pro bono work” – and the environment, as a carbon-neutral company and 1% for the Planet member.
The other side of the company’s impact is focused on helping support the success and growth of other mission-driven companies. “I’d always been aware of the debate about what capitalism is meant to do – is it supposed to serve the interests of shareholders only, or is it supposed to have a broader focus on benefiting the community, the world, and workers, as well as capital?” Jim says. “The right answer was always clear to me. I wanted to be part of a movement that’s trying to demonstrate that there’s a better way to do capitalism, and that it’s possible to run a business that’s profitable, ethical, and serves the interests of all stakeholders.”
In the Q&A below, Jim shares why it’s important for impact companies to tell their stories, how companies can address and minimize legal risks around policies such as DEI and ESG, and the tools and methods he recommends to impact companies looking to grow their business.
Why is it important now for impact companies, and all companies, to continue talking about the value of impact-driven business decisions and policies?
As mission-driven organizations, we’re engaged in a collective effort to demonstrate that there’s a better way of doing business. We’re trying to show that you can be profitable and do good in the world—operate ethically, protect the environment. Becoming part of the B Corp movement appealed to me because I see it as a collective attempt to bend the curve of the entire economy—not just to create a small niche that feels good to belong to, but to change how capitalism works in America and globally over time. That’s a long-term project, and it only works if you show people the value of it. You need consumers, commentators, academics, and business owners to see that this is actually a better way of doing business.
It’s important that we continue to make that argument, over and over, using real examples from companies that are succeeding in this space. By consistently telling those stories, we can break through the noise of the current system—a system characterized by crony capitalism, monopolistic behavior, and the exploitation of consumers and their data.
Are there distinct legal threats impact companies need to be aware of in the current environment?
Mission-driven businesses tend to have a few specific legal issues, many of which revolve around crafting and preserving ESG and DEI commitments and policies. The current climate can feel like a minefield of politics and law with respect to those types of programs, so they are concerned about how to navigate that. People in the community are experiencing a lot of fear around potentially making their companies a target. And while there are reasons behind that fear, the reality is that most private companies are not directly affected by actions at the federal level or state actions meant to undermine ESG and DEI policies.
We try to be very clear in defining risks for our clients, so they can reasonably say, ‘Okay, there’s a lot of noise out there, but the actual risk to our business is small, so we’re going to persist with this policy or program because we think it’s important and part of who we are.’ From a legal standpoint, if you’re a private company that doesn’t do government contracting and isn’t an investment fiduciary—meaning you don’t manage money for others—the actual threat to your business from federal actions, executive orders, DOJ pronouncements, or state-level actions is very small. The government’s ability to tell a private business owner how to run their business is quite limited.
Of course, legal risk is separate from reputational or market risk. There may be business partners who say, “We don’t want to do business with Impact GC because we don’t want to be associated with a company that’s so forward about its social or environmental commitments.” That’s fine. We may lose a client. On the other side, there are companies that do want to work with us precisely because of those commitments. So there is a potential commercial risk in taking strong values-driven positions, but that’s simply part of the deal.
What’s one big-picture piece of advice you give business leaders who are considering these kinds of policies and practices in light of potential risk?
Let’s look at DEI hiring practices as an example. DEI policies and hiring practices were originally designed to comply with the federal mandate not to discriminate in hiring—to ensure you’re selecting the best candidate regardless of protected characteristics like race, gender, or sex. Policies that are meant to create a deep and broad pool of candidates are simply good business. Companies should continue to do that.
The key is that everything you’re doing—whether it’s ESG policy or DEI policy—should be rooted in your company’s commercial aims. These aren’t add-ons or separate lenses applied after the fact; they’re core elements of how you run the business because you believe that’s how the business will be most successful. Whether it’s building strong learning and development programs, maintaining robust hiring practices, or seeking out vendors from a broad range of suppliers, including those with diverse ownership, these policies are just good business. Framing these practices as integral to your overall business strategy is both sensible and a very safe way to approach this work.
Why is one of your firm’s primary focuses on helping impact businesses grow?
We want ethical businesses to become a larger and larger part of the economy. We can do that in two ways: 1) by encouraging more companies to change how they do business, and 2) by helping the companies already in the movement grow more quickly and successfully. Growth matters because we want the B Corp model to become the default. It shouldn’t be extraordinary; it should simply be how business is done. We’re a long way from that today, but we’ll get there by both growing the businesses already in this community and bringing new ones into it.
Mission-driven businesses can face challenges in figuring out ways to grow that are consistent with their values, so many companies in this community reach a certain size and then plateau when they hit the capacity of the founding team. There are many ways of growing, whether it’s bringing in outside capital, mergers and acquisitions (M&A), or building a professional management team, that can allow you to grow your business and increase your impact in a way that’s consistent with your values. But those things tend to be scary for a lot of mission-driven business founders, so I spend a lot of time trying to demystify those tools and help people figure out how they can use them to grow their own businesses.
What are some of the ways you advise mission-driven companies to grow?
One is to use traditional tools of capitalism in an impact-conscious way. Today there is also a wide range of innovative financial products designed to reduce risk for the company taking on capital. These products are meant to allow impact-oriented companies to borrow money or take on new capital in a way that doesn’t endanger their business success or their mission.
A lot of the work is helping people understand which parts of the ecosystem they can access, who they should be working with, and what they should be looking for in terms of capital, acquisition targets, or other opportunities that will move their business forward in a way that’s consistent with their mission. An important part of it is understanding how to put together a professional advisory team that will design a growth strategy, such as an acquisition plan, consistent with who you are and what you want to build. That ecosystem is growing, and we see ourselves as part of that growing ecosystem of professional services that can advise mission-driven businesses in a way that understands and shares their values.
