Small business social responsibility. What does it mean?
Elizabeth and I have been exploring this question for a few years!
Before joining EPW Small Business Law in 2014, I had a gig assessing the corporate social responsibility (CSR) of hundreds of big businesses. My colleagues and I analyzed the human and environmental impact of large global corporations. And provided insight to investors concerned with qualitative, “people and planet” assessments.
With big business, there is no shortage of factors to consider: carbon emissions, supply chain, philanthropy, etc.
Many of the same concerns apply to small business as well. BUT there is little comparison, by most measures, between a business with less than 5 employees and one that has over 50,000. Or even between 5 employees and 50 employees.
Therefore, the question becomes: what does small business social responsibility mean to us at EPW?
Here are three ways that we are exploring this question:
Small Business Social Responsibility: Our Values
Elizabeth has long maintained that if someone is seeking an “attack dog” lawyer, she is not the right lawyer to work with.
She doesn’t do litigation. She is focused on helping clients to build a business on sound legal foundations that prevent contentious dynamics.
Elizabeth left the big law firm world because she knew that wasn’t the life she wanted. Here is her story!
With the idea of a collaborative vs. competitive approach in business relationships, here are the values that we practice every day:
We use the law and our influence for good.
We help business owners feel calm and capable.
We operate from a framework of partnership.
We are creating a company founded on respect, flexibility, and the inherent value of every individual.
We only work with clients who align with our values, and will not take any action that is out of our integrity.
Small Business Social Responsibility: Our Causes
Because of the strict ethical rules for attorneys in California, we cannot have affiliates. Or even give a small gift card as a thank-you for referrals.
We decided that the best way to thank our community is by supporting organizations that are meaningful to each of us. In recent years we have given a portion of profits to charitable organizations.
For Elizabeth, causes include the microlending organization Kiva, which she has participated in since 2006! Additionally, she supported a racial and social justice advocacy group, Advancement Project.
Facing our changing planet, my focus is rapidly dwindling biodiversity and I chose to support Orangutan Outreach.
Small Business Social Responsibility: Exploring B Corporation Certification
Note: we originally took the B Impact Assessment some time ago. The descriptions of the assessment below may not be up-to-date.
We invested time exploring the possibility of getting B Corporation Certification by chipping away at The B Impact Assessment. The assessment is divided into five categories: Community, Customers, Environment, Governance, and Workers.
“Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.”
Most importantly, Elizabeth and I learned from the assessment process. It was useful to dig into aspects of our operations that we had not considered before and we appreciate the model.
But we discovered that the certification is not a good fit for us for three reasons:
- EPW Small Business Law is a service-based legal business, without the supply chain of any physical products.
- Small business is defined as having under 500 employees. With under 5 employees, it may be more accurate to say that we are a “tiny business.”
- As a licensed practice, the ethical requirements of a law firm does not allow for full transparency or open governance.
The way the assessment works, you don’t get negative points for missing criteria. But missing out on points means that you will have a hard time reaching the minimum threshold.
We obtained 62 points with ease but would have had to make some creative jumps to obtain the required 80 points. We got to a point where we felt like we were stretching to wear something that didn’t fit.
Here are examples, from each of the categories, of why B Corporation Certification wasn’t right for our tiny, legal, service-based business:
There is a high-point question regarding “Independent Contractor Practices.” We were not eligible for any points because we were not engaging independent contractors at that time. As a result, no points unless we put theoretical practices in place just for the certification.
Note: It doesn’t mean that we would never engage an independent contractor for a specific, results-based project. There are important legal aspects to engaging independent contractors vs. employees.
Regarding a question about providing transparent pricing for all customers: one client cannot know what another client’s price is on custom packages because that would violate attorney-client privilege.
Consequently, no points. Or partial-points-ish? Most of our services have transparent flat-rates but we must maintain privacy for each client.
Since we each work from home, many of the detailed environmental impact criteria were irrelevant.
Simply put: our environmental impact is EXTREMELY low. In the nearly five years I have worked at EPW, I have printed maybe 10 sheets of paper total and driven 5 miles related to work. I usually don’t need the lights on while working, with the Colorado sun streaming through my window. Solar panels, hybrid vehicle, recycling, composting, low-water xeriscape – check!
But questions like this were too big for us: “What % of Scopes 1 and 2 Greenhouse Gas emissions has been saved due to efficiency improvements implemented by your company?” Hence, no points on that one.
There were a number of questions regarding a Board of Directors.
Since our legal structure (professional corporation) does not allow for/require a Board of Directors besides the licensed-attorney shareholders of the corporation, these questions were not applicable to us. And we couldn’t get any points.
When Elizabeth’s health care policy cost went up by 33% (!) she switched from a company-paid policy to the California Exchange. For that reason, we couldn’t get points on the question of a health care plan offered by the company.
There are many more examples, but you get the idea.
And there are bigger, open questions to consider. Would the certification prove to be purely symbolic? Or would it help us to attract new clients who would not have considered us before?
Furthermore, even if we did stretch to get to 80 points, the $500 annual certification fee would add an extra item to our small business budget.
In conclusion, many criteria are not one-size-fits-all. B Corporation does have different questions for different sized businesses, but there was not a good fit for us. We will continue to explore and experiment with small business social responsibility as the world changes and businesses– big, small, AND tiny!– evolve.
What does small business social responsibility mean to you and your business?
Our #1 Cause is helping inspired entrepreneurs to get their idea off the ground or to protect their existing business!
Is one of our small business legal services right for you?