Orrick Develops New Role in Bet on Hot Field of Impact Finance
ALM Media
Updated
Each day news articles abound that aim to explain why millennials are seen as a different breed. They're marrying and having kids later, they're not buying houses or diamonds and they're really into avocado toast. As it turns out, they are also a driving force in impact finance.
"Millennials want to make investments and use their money in a way that does some good in the world," explained Perry Teicher of Orrick, Herrington & Sutcliffe.
And law firms are happy to help that cause.
Perry Teicher.
Teicher, based in Orrick's New York office, was named earlier this month as impact finance attorney, helping to lead the firm's impact finance and investment group. While other law firms are also focused on advising in this growing area, Teicher said he believes his is the first role of its kind. Teicher, who graduated from the University of Michigan Law School with a law and business degree in 2015, initially joined Orrick as an impact finance fellow. His new position will make him the only attorney focusing full-time on that area in the firm.
Impact finance, he says, is making investments while keeping environmental and social impact in mind along with financial results. Simply put, impact finance is the idea that having a positive effect on the world around you is just as important as reaping financial benefits.
Being one of the first attorneys with a role specifically dedicated to the quickly growing field excites Teicher.
"You go to law school, you become an attorney to help those in need and deal with complex problems," he said. "This is that nexus of trying to create something positive in the world and solve complex problems."
Teicher's new role doesn't mean he won't be billing hours. Some of the work is done pro bono, but not all of it. The clients Teicher works with aren't only nonprofits, either.
"We're not treating this as a pro bono initiative, but as an initiative of the firm within our corporate group," Teicher said.
"We're working with clients that range from a number of private equity funds that have been increasingly involved in the space to private organizations and nonprofits thinking about their endowment and aligning their investment with their goals," Teicher said. He also noted that Orrick is using its impact finance group to work with early-stage entrepreneurs and tech companies that are aligning intentional impact with their business strategy.
Aaron Bourke, private funds associate at Reed Smith and co-founder of both the Impact Investing Legal Working Group (IILWG) and Reed Smith's social impact finance group, sees Teicher's new title as a win for the sector.
"It signals the potential sustainability [of impact finance] as a legal practice within Big Law," he said. "It's encouraging in terms of the general direction that Big Law is going."
Bourke's legal working group is evidence of the collaboration among firms in this burgeoning area. The association is a group of lawyers who are interested in impact investing, spending some of their free time discussing with one another trends in the field. They hold conferences and webinars to help educate each other on new developments. The group is international and well represented by Am Law 200 firms, including Patterson Belknap Webb & Tyler; Morgan, Lewis & Bockius; Morrison & Foerster; Goodwin Procter; DLA Piper; Cooley; Venable; Paul, Weiss, Rifkind, Wharton & Garrison; and Shearman & Sterling.
Orrick and Reed Smith aren't the only ones formalizing practices in the space. Drinker Biddle & Reath has an impact investing, sustainability and benefit corporations team; Hogan Lovells has a social enterprise and finance practice; Goodwin Procter launched an impact and responsible investing practice; and Morrison Foerster has its own social enterprise and impact investing practice.
At the association level, Global Impact Investing Network (GIIN), the U.S. Impact Investing Alliance, and Bourke's IILWG all gather attorneys interested in this area of work. Each year, conferences and meetings grow larger, Bourke said.
This space, also known as environmental, social and governance (ESG) investing or socially responsible investing (SRI), is growing rapidly.
According to US SIF Foundation's 2016 "Report on U.S. Sustainable, Responsible and Impact Investing Trends," one of every five dollars under professional management is invested according to socially responsible investing strategies. A press release from Orrick, announcing Teicher's new position, also noted the growth in the industry.
"According to the Global Impact Investing Network's 2017 Annual Impact Investor Survey, over $22 billion was invested in nearly 8,000 impact transactions in 2016," the firm said. "There was a reported 15 percent increase in the amount of investments from 2015 to 2016, and the market is expected to grow another 17 percent through the end of 2017."
Bourke has seen that growth first hand, noting that in the past three years his working group has grown from a small pack of attorneys discussing positive impact in business and law to an organized group of around 100 lawyers.
"I see it only going in one direction; there's a lot of momentum in it," he says. "There's more and more acknowledgment that there's value in finding a middle ground between traditional business and philanthropy."
Perhaps millennials are worth their salt, after all.
