How a local attorney became an advocate for the national ‘benefit corporation’ movement


Laura Jordan with the Capital Law Firm is seen at the University Club. (Evy Mages/FOR THE WASHINGTON POST)
December 30, 2012

The D.C. City Council this month approved legislation that brings District-based companies one step closer to being able to become “benefit corporations,” a corporate form that combines the profit-seeking motive of traditional companies with the do-good mission of nonprofits.

Companies that adopt the form typically amend their corporate charter to take on legal responsibility for doing social good, including making decisions that are best for their employees, supply chain and local community, and putting together an annual report outlining steps they’ve taken to make a positive social or environmental impact. The philosophy is gaining traction around the country: D.C. follows 12 states that have passed such legislation, though Congress still has to approve the measure.

Attorney Laura Jordan, who runs the Capital Law Firm in the District, is the region’s go-to lawyer when it comes to benefit corporations. She chaired the D.C. legal working group that studied the legislation, and worked with business groups to get it introduced and passed. In 2010, when Maryland became the first state to pass benefit corporation legislation, Jordan incorporated the first benefit corporation in the nation, pet companion store Big Bad Woof in Hyattsville. A year later, when Virginia passed a similar law, she incorporated the first benefit corporation in that state, Farm Community Consultants. She also represents Pine Benefit Corp. and Alli Sosna Group, two of the dozens of local companies that have adopted benefit corporation status.

Jordan, who’s in her 25th year of practicing law, once worked at large law firms in New York and Washington, representing major corporations such as Mitsubishi and Louis Vuitton, before forming a solo practice. Capital Business chatted with Jordan last week about her work with benefit corporations and whether they have a future in corporate America. Below is an edited transcript:

How did you become interested in benefit corporations?

Casey Willson [head of sustainability and retail at the Small Business Development Center at the University of Maryland in College Park] and I were talking one day in 2009 or early 2010 about some small-business matters, and he mentioned benefit corporations to me. I was immediately intrigued and decided to learn more about them. I became very deeply engaged in the issue. This is something that really fits in my own philosophy and personal beliefs about what I think is important — ways that businesses can really be a part of their community. The other thing that appealed to me is [benefit corporations] allow the power of the free market and entrepreneurial energy to solve social problems. It’s bottom up, it’s not government-mandated. It’s a corporate form that costs the government no money. It’s the perfect free market alternative for people who want to make the choice ... It gives customers, employees, investors and vendors the choice to support a business that not only provides a valuable product or service, but also supports the [social] mission stakeholders want to put their money behind.

How does representing benefit corporations fit into your law practice?

I advise a number of small businesses, start-ups, emerging ventures and early-stage ventures. A number of the founders of these ventures came to me with this question: How can we make money while still doing good? Benefit corporations answered all these questions. Right now, my practice involves primarily corporate law and civil litigation, government contracting, entertainment and sustainability [energy companies and consulting and management firms that focus on sustainability] — the benefit corporation practice falls into that sector.

Most companies that are forming as benefit corporations are local. [For example, Big Bad Woof commits to using regional vendors and partners with Busboys and Poets to host community outreach events on sustainable farming. Maryland catering company Alli Sosna Group, founded by local chef Alli Sosna, funnels a percentage of profits to Sosna’s nonprofit MicroGreens, which teaches local families how to prepare healthy meals on a budget.] Do you see larger companies adopting this form too?

It is something a larger corporation could do. In California, [outdoor apparel retailer] Patagonia formed as a benefit corporation in the early days of California law taking effect this summer. What I see happening with the larger companies is that for those interested in this corporate form, they may carve out a piece of their operations to put under a benefit corporation umbrella. Rather than moving the whole company to a benefit corporation umbrella, they may segregate a piece of their operations or a division into a benefit corporation. We’re in the early stages. Ultimately, we’ll see larger companies moving in this direction.

Catherine Ho covers law and lobbying for Capital Business, which she joined in 2011. She was previously a reporter at the Daily Journal in Los Angeles, covering LA civil courts and labor and employment law.
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