CCBJ May 2023 Edition

Corporate Counsel Business Journal

MAY 2023

VOLUME 31, NUMBER 5

Renewable Energy Opportunities and Challenges

JON MILLER, DIRECTOR, TAX EQUITY CAPITAL MARKETS FOR NELNET, DIVES DEEP TO DISCUSS IMPACTS OF SHIFTS TOWARDS CLEAN ENERGY AND THE PREVALENCE OF ESGRELATED DIALOGUE.

INSIDE

Mission…Culture… Team – Repeat

The Saga of “Net Spend Anticipation”

Renewable Energy Opportunities and Challenges

AND MORE!

NETWORK

The participants in the CCBJ Network demonstrate, through their many contributions, their unwavering commitment to the advancement and success of corporate law departments. The engagement and support of these “partners of corporate counsel” assure we continue to develop and distribute the news and information this unique and sophisticated audience relies on to meet the evolving legal and business needs of their organizations.

Strategic

Please help us improve and expand our services to corporate counsel by sharing your ideas with our publisher, Kristin Calve, at 844-889-8822 or kcalve@ccbjournal.com

Mission…Culture…Team – Repeat

 Dan Haley has spoken with CCBJ in the past, and he has returned to share his advice for those looking to build, develop, and retain high-impact teams throughout their organizations.

CCBJ: Dan, it’s been a while since we’ve caught up. To start us off, please share some insights about your background and your transition from Sprinklr to Guild?

My career path has been unpredictable and unplanned, meaning each transition I’ve made has been to pursue an unexpected opportunity that presented itself. Coming out of college, I worked in politics for a number of years, and then went back to law school and did the law firm route for about five years before joining the governor’s office in Massachusetts. Then, spent some more time at a big law firm and ended up feeding 10 years of my life to law firms before I was ... I like to say saved, although I’m not trying to throw any shade on the law firm world. It wasn’t for me; I spent more time there than I probably expected to coming out of law school.

I was offered an opportunity to join a client, Athenahealth, to build out a federal affairs program there. I was seated in the legal department thinking my career as a lawyer was over. And it turned out it was really just starting, or it was rebooting. Shortly after I started, I took over responsibility for litigation, then was asked to be acting general counsel when the general counsel went on sabbatical. He left for another opportunity during that period of time, and I ended up general counsel of a publicly-traded company long before I was qualified to be general counsel of a publicly-traded company That experience really gave me a taste for working for a mission-based organization.

Athenahealth exists to save lives by providing information to caregivers when they need it. I had a wonderful career there, moving from being general counsel to chief administrative officer where I had the privilege of overseeing all the people functions of the company, as well as the legal teams.

When the company was taken private by an activist investor, I and many others moved on. I then spent three-and-a-half years at a terrific marketing tech company called Sprinklr. During that time, I had the opportunity to help take Sprinklr public, which was a wonderful learning opportunity.

Then, when Guild reached out, I had the comfort of being able to leave Sprinklr to pursue an extraordinary opportunity with another mission-based organization. Fortunately, my succession plan worked perfectly, and my successor was ready to take the reins. I probably would’ve lost him if I hadn’t gotten out of his way. It was a win-winwin for everyone.

In serving as general counsel and corporate secretary, how have you perceived your role as leader, influencer, and supporter of the success of your company?

I try not to use cliches if I can help it, but sometimes they seem unavoidable. One that applies here is I think of myself as an executive first and a lawyer distant-second. As part of being an executive, I am co-responsible with my peers for setting the direction of the company and helping contribute to strategic decisions. And I work to achieve that by leveraging my legal-based experience—not just legal learning, my subject-matter knowledge—but also what I have observed and experienced.

Somehow, I evolved from a young, unqualified general counsel into a greybeard, literally, who has quite an experience set at high-growth companies, navigating the various business and legal challenges that arise. I’m leveraging that perspective with the intent to further business objectives, be an enabler myself, and build a team of collaborative business enablers. The most important role of any executive is to build a strong team with a strong culture that is aligned to the culture and mission of the organization. A leader must create a team that works first and foremost to make doing business easier and more pleasant for our stakeholders.

Human resources and talent management often fall into the suite of responsibilities for corporate legal executives. What is your advice to others looking to build, develop, and retain high-impact teams throughout their organizations?

That is right in the sweet spot of my career and my experience. Athenahealth offered me the opportunity to expand the scope of my role from overseeing the legal and compliance functions to the tremendous privilege of running all of the people organizations. That included HR, talent acquisition, learning and development. It was a wonderful experience to have relatively early in my career because it goes directly to what I think you’re getting at.

As I said before, every executive’s core responsibility is to build a great team. That’s true in any organization of any significant scale. In order to do that, you really need to be consciously focused on your team at all times—on their individual and collective ambitions, as well as the culture that exists between and among team members.

Leaders should be focused on building organizations of people who are mutually supportive, who have fun at work, who approach their day with a smile, and their stakeholders and their challenges with a smile.

I personally believe, even in the legal context, where often you think of a lawyer as serious, hard-nosed, maybe even cynical, that it is a superpower for a lawyer to be open, optimistic, cheerful. I try to impress that on my teams. It’s been a characteristic of the teams I’ve developed, now at two companies, and what I’m hoping to contribute to now at Guild.

Guild offers ta perfect alignment between my own philosophy and the mission of the company. The company exists to create opportunity for skilling, learning, and career growth among the nation’s workforce—largely people who haven’t traditionally had access to these opportunities. In essence, the company exists to continuously lift people up, and that is what I aim to do with the teams that I’m privileged to work with. I can look at my teams and say, “We are doing, on our team, what Guild exists to do in the broader world. Let’s make sure we’re walking the walk amongst ourselves.”

I evolved from a young unqualified general counsel into a greybeard, literally, who has quite an experience set at high-growth companies, navigating the various business and legal challenges that arise.

What is your advice to other C-level executives and directors looking to empower their fellow executives with both grit and empathy?

I believe grit follows empathy, and maybe that’s counterintuitive, but grit without empathy can be a negative force. It’s hard to bring people along if all you’ve got is grit. It’s hard to inspire people who don’t believe you care about them. It’s hard to build the trust necessary. One of my favorite clichés in people management is, “Hire people who are smarter than you are.” There’s a whole raft of clichés that capture the sentiment. “If you’re the smartest person in the room, find a different room.” “Hire people who are capable of taking your job and want to do so someday. And then when they’re ready, get out of their way.”

It’s difficult to build the trust necessary to do that if you’re focused entirely on the grit and individual ambition, without the empathy component. It’s important to think

about your coworkers’ ambitions and needs as well as your own, to be mutually supportive and empathetic, particularly in difficult contexts like high stakes negotiations or litigation. You need to remember that everyone you’re dealing with is a human being who’s dealing with something. And you don’t know what those things are, but if somebody’s coming across as less than their best self, there’s probably an explanation for that. So not just powering through that but reminding yourself that the way you interact with people matters in terms of the outcomes that you’re able to achieve both individually and collectively.

Dan, you are a two-time cancer survivor and a two-time Ironman triathlete. How does your personal experience influence your particular leadership style?

I’ve been asked this question before, and I’m going to tailor my answer a little bit to the rest of our conversation. I think

it takes a measure of grit to get through a cancer diagnosis, to state the obvious. I remember driving my grandmother to the Dana-Farber Cancer Institute in Boston for her own cancer treatments. We would walk into the waiting room and she would target people who looked sad or scared and sit down next to them and chat them up. She would always say something along the lines of, “Chin up. Attitude matters.” Then we’d walk out and she would tell me, “That one’s going to make it,” or, “That one isn’t,” because your mental state matters so much to your physical state.

At that time, I could not imagine I was going to deal with cancer not once, but twice. During those times, her voice always came back to me and the notion that your mental state matters to your physical state. Circling back to your earlier question, what my grandmother was showing in those situations was a tremendous amount of empathy in furtherance of providing a little secondhand grit to people. The obvious connection between that and the Ironman is I came out of my second cancer diagnosis and my oncologist told me, “Cancer is not going to kill you because we’re going to watch you for the rest of your life and if it comes back, we’re going to see it and we’re going to kill it. But you’ve been irradiated so many times over the course of the decade through treatment, that you’re at a materially higher risk for heart disease and lung disease. The way to even out those odds is to get yourself into really good cardiovascular condition and stay there.”

I began doing endurance events and on a whim—which is a silly thing to say but is true—signed up with a friend for a full Ironman. I’d never done a triathlon. I know it’s not literally true that you can do anything you set your mind to, but I do think it is literally true that most people can do a lot more than they think they can. I never would’ve

thought I was capable of an Ironman until I learned that I was. The combination of those two things—the memory of how my grandmother handled her own cancer diagnosis, her treatment, and her empathy, along with how completing two Ironman triathlons has convinced me that you can think you’re exhausted and you still have more—have shaped my leadership style.

The mental lift of achieving extraordinary things is worth the effort. I don’t reference those things often, explicitly, but I do think to your question, how does it inform my leadership style? I try to consciously be empathetic and always conscious of the fact that people deal with more than any of us ever know. And second, I try to instill in my teams this notion that hard things are worth doing and with sustained effort, particularly together, we can often achieve a lot more than we’d expect.

Any final thoughts to share?

I would like to punctuate what I said about the alignment of Guild’s mission to unlock opportunity for the workforce with what jazzes me about being an executive and a people manager.

To go back to my answer to the first question on my path to Guild, it’s also my answer to the “Why Guild?” question for me. I was happy at Sprinklr. I loved my team there. I loved my colleagues there. I could have been very happy just staying at Sprinklr. But I couldn’t pass up the opportunity at Guild, to be a part of a B Corporation that is literally living the maxim, “Do well by doing good.” I don’t like when people use the word “literally” and they don’t mean literally. I mean literally Guild does not do well as a business unless it does good in the world. That is how we make money.

I just love that. It gets me so energized. And I love that in making the move to Guild, I was able to lift the careers of the people very tangibly at Sprinklr who I had brought there, and who down the line of succession, seamlessly moved into better roles and the next steps of their careers. 

The mental lift of achieving extraordinary things is worth the effort put in.

Front

The Saga of “Net Spend Anticipation”

In its recent State of the Corporate Law Department report, Thomson Reuters Institute dove into a metric they call Net Spend Anticipation. According to William Josten, Senior Manager, Enterprise Content – Legal, there is reason to question whether GCs and other corporate law department leaders should celebrate an anticipated increase in legal spending.

Given that NSA is a newish metric – the ideas are not new, but the nomenclature has only recently been standardized, Josten takes pains to dissect the metric. “During interviews with GCs,” he explains, “we ask them whether, within the next 12 months, they expect their legal spending to increase, decrease, or stay the same. The actual NSA metric is then calculated by subtracting the anticipated decrease percentage from the anticipated increase percentage.”

But TRI groped for a formal name. Their first stab, net spend optimism, seemed appropriate as the metric generally tends to show legal spend increasing over time. “However,” Justen writes, “as we heard feedback from many general counsel, much of it fell along the lines of ‘I may be anticipating an increase, that doesn’t necessarily mean I’m optimistic about it.’

SHO R T TA K E S

Big Law’s Targeted Rightsizing

In this piece from Bloomberg Law, reporter Roy Strom examines a report that shows that billing rates plunged to historic lows despite rising firm headcount and declining demand. The result? Firms are under pressure to downsize, which has fed layoffs at Cooley, Gunderson and Goodwin. According to Kent Zimmerman, a partner with the Zeughauser Group, some firms will shed lawyers even as they add talent. “Targeted right-sizing will continue to pick up with a focus on lawyers who underperform expectations for years,” Zimmermann says. “Simultaneously, firms will continue to invest in teams of lawyers who are highly productive in doing the work and bringing it in at rates that drive increased profitability.”

Source: Bloomberg Law

The In-House Future Is Now

Andy Cooke, GC of TravelPerk, has been trying generative AI to upgrade his department’s internal chatbot’s responses to questions from employees about privacy, company policies, and more. Chatbots may seem smart, he says, but they are kind of dimwitted, just leveraging very large decision trees. Nevertheless, this tide will continue to rise. “We expect generative AI will substantially disrupt legal services,” Cooke says. “GPT-3.5 has demonstrated its ability to answer questions on demand with a 70%+ degree of accuracy; GPT-4 takes this accuracy up to the 90%+ level. That means lots of possible applications.

Source: Crafty Counsel

Memo to GCs: Try Lit Finance

Burford Capital, the world’s largest provider of specialized legal finance, beseeches outside counsel to buck the conventional wisdom that litigation finance is just not right. “Among the key findings from a Burford survey is that GCs are eager to see law departments transcend ‘typecasting’ as cost centers.” Additionally, GCs expect outside counsel to advise them on opportunities to add value – one of the most important factors in individual GC success. Litigation finance can help.

Source: Thomson Reuters Practical Law

Qs at the Intersection of AI and Bill Review

Wolters Kluwer is fretting about the gush of optimism at the intersection of AI and legal bill review. “With the market getting more cluttered,” WK writes, “it is important for legal technology buyers to understand the factors that separate the best from the rest. These includes: How many members of their team have direct experience in legal operations? Do bill review team members have experience as paralegals or attorneys? Do they have specialized training in using AI in bill review? How long have their team members used AI in this context? Are they recognized as leaders by outside analysts?

Source: Wolters Kluwer ELM Solutions

Case Filings Fall

The Institute for the Advancement of the American Legal System at the University of Denver (IAALS) released a new report, The Past and Future of State Court Civil Filings, concluding that significant work is needed to improve access to justice. “Historically, it’s been accepted that state court case filings climb over time in step with population growth, which has informed court planning for buildings, staff, judges, and other resources,” says IAALS CEO Brittany Kauffman. “Courts need a better understanding of what types of cases are being brought before them—and in what numbers.”

Source: LawSites

In-house Career Killers

In this piece from Sterling Miller, being an in-house lawyer is harder today than ever. One wrong move could mean a ticket to unemployment. Among the must-avoid behaviors: Dress like a mess. Even if your company has a casual dress policy, pay heed to your duds. Being an a*#$^%e! “Sometimes this strategy works at big law firms, but it rarely works in-house. Not taking admin duties seriously. “Corporations run on information and processes. Take both seriously. If you’re asked for your input on evaluating staff or paralegals or other attorneys, don’t half-ass it.”

Source: eDiscovery Team

Briefly

Thomson Reuters brings forward vision to redefine the future of professionals with content-driven AI technology

Lighthouse Launches New Managed Review Practice

McGuireWoods Advises Summit Park in Sale of Parkline to Trachte LLC

Weil Advises Providence Equity Partners and Heron UK Bidco on the Recommended Cash Offer for Hyve Group Plc

Clifford Chance advises Informa on acquisition of Winsight

Vertica by OpenText and Anritsu Sign New Deal for Next-Gen Architecture and 5G Network Capabilities

Simon Amies Expands Life Sciences Practice at Cooley in London

Nicole Giantonio joins Epiq as Chief Marketing Officer for Legal Solutions

Mitratech Announces Partnership with Leading CLM Provider, Agiloft

Onit Bolsters Portfolio of Legal Workflow Solutions

Weil Advises TPG in its $2.7B Acquisition of Angelo Gordon

Clifford Chance advises Alter Domus on its strategic acquisition of Solvas

Thomson Reuters introduces Cloud Audit Suite, the UK’s first fully cloud-based end-to-end audit software

Dayan Rosen Boosts Debt Finance, Private Equity Capabilities With McGuireWoods

Required Reading

Too busy to read it all? Try these books, blogs, webcasts, websites and other info resources curated by CCBJ especially for corporate counsel and legal ops professionals.

COLUMN: Unfiltered

Bloomberg Law columnist Vivia Chen can get a bit snarky, but when her snark barks, it can be a treat to read. Recently, she laid into her favorite target, Big Law, for the shabby treatment of their young talent as they dished out pink slips. “What’s startling is not that layoffs persist in Big Law,” Chen writes, “but the way some firms are discarding their talent like yesterday’s iPhones.” What really raised Chin’s ire were comments from firms such as Kirkland & Ellis, sugarcoating layoffs as routine “performancebased decisions” arising from attorney reviews “just like we do every year for all attorneys at all levels.” Twisting the shiv, Chen turns to a former K&E partner. “Big Law was eager to throw bodies at the burgeoning economy not long ago,” Steven Harper told Chen. “They were good enough to do the work once upon a time, but when the economy changed, they’re not.”

BLOG: My Shingle

Carolyn Elefant’s blog targets solos and smallfirm practitioners. That does not, however, mean she has nothing to benefit Big Law. This piece is a good example. Using the plummeting stock of Chegg, which provides study aids to high school and college students, she asks a question on every timekeeper’s mind: Will AI kill the billable hour? “When a tool like Casetext Co-Counsel can summarize the 50 cases cited in an opposing brief in 10 minutes rather than the 10 hours it might have taken an attorney, how do you bill for that?” she asks. “When a lawyer can push a button to generate discovery requests that respond to a complaint that an associate supplements with two hours of review, rather than the two days the project might have taken, how do you bill for that? And if in-house counsel can use AIpowered tools, how much use will they continue to have for large outside firms?

REPORT: AALL State of the Profession

This is the third time AALL has conducted its exhaustive survey of U.S. law librarians, which digs into the work of librarians in law firms and corporate legal departments, academia, and government. You can find info about all aspects of law libraries and librarians, including budgets, staffing, skills, workplaces and much more. Bob Ambrogi, legal tech superstar whose LawSites blog is an indispensable resource, points to the finding related to legal tech, particularly the “instrumental role law librarians play in innovation and technology adoption within their organizations.” Asked whether the library is involved in purchase decisions for technology and research products, fully 95% respond with a resounding YES! “As might be expected,” Ambrogi writes, “100% of firm/corporate librarians are responsible for overseeing research databases. Some 36% oversee their organizations’ knowledge management systems. Forty percent say they oversee other technology.”

Contributors

Thanks to the law firms, technology companies, alternative legal service providers, management consultants and other supporters of corporate law departments who share their insights and expertise through the CCBJ network. Your participation is appreciated.

Akin Gump Advises Pharmakon Advisors in its $275 Million Debt Facility with Reata Pharmaceuticals

Barnes & Thornburg Expands To Nashville, Bolstering National Healthcare And Capital Markets Practices

Top Environmental Enforcement Lawyer

Adam Sowatzka Joins McGuireWoods

Dan Haley is General Counsel and Corporate Secretary at Guild. He has decades of public and private company legal experience, and a track record for developing legal functions. Prior to Guild, he was General Counsel and Corporate Secretary at Sprinklr, following nearly seven years at athenahealth where he held various legal leadership roles, including General Counsel and Chief Legal and Administrative Officer. Dan holds a B.A. from Middlebury College and a J.D. from Harvard Law School. Reach him at dan.haley@guild.com

Jon Miller is a CFA Charterholder, CFA ESG Investing Certified, and former board member for Solar Energy International. Jon oversees Nelnet’s $500 million solar tax equity portfolio and the company’s tax equity co-investor platform. He has held positions as capital markets advisor, tax equity consultant, investment manager, and debt underwriter. Over his career, Jon has transacted on over $2 billion of solar and wind projects for some of the nation’s largest developers and institutional investors. Reach him at jon.miller@nelnet.net

Angie Zimmern serves as McGuireWoods’ pro bono director, expanding the firm’s commitment to developing and sustaining pro bono programs that have been recognized nationally for innovation and impact. In addition to her leadership roles with the firm, Angie practiced law in the area of business and securities litigation. She had a broad litigation practice, with particular emphasis on financial services and class action litigation, and she advised clients on matters involving business and consumer credit disputes. Reach her at azimmern@mcguirewoods.com

Epiq Expands Support for Global Business Transformation Solutions and Workplace Transformation in Canada

Weil Advises on Financing of Five Arrows’ Acquisition of a Majority Stake in n2y

Thomson Reuters Takes Occupancy of New Downtown Toronto Centre

Richard Starling and William Herrfeldt Bolster McGuireWoods’ Fund Formation Capabilities

Clifford Chance Announces Eight New Counsel Appointments in Asia Pacific

Matthew Smith Expands Global Fund Formation Practice at Cooley in Boston

Weil Advises on the Restructuring of Frigoglass Group

Fund Finance Partner

Corinne Musa Joins Akin Gump in New York

Renewable Energy Opportunities and Challenges

JON MILLER NELNET

 The Inflation and Reduction Act, macroeconomic factors and an ESG debate are just some of the variables affecting sector growth, and Nelnet's Jon Miller dives deep to address said variables.

CCBJ: To start, please tell us about your background and what led you to your role with Nelnet?

I have a background in clean energy finance spanning over 13 years, where I have gained expertise in tax equity and capital markets, particularly in the context of solar projects. I first crossed paths with Nelnet while speaking at a KPMG tax seminar in Omaha, Nebraska. Over the next year or so, we stayed in touch, and when Nelnet decided to launch its own co-investment syndication platform, they approached me to lead it. I jumped at the opportunity, and we've

successfully grown it for the last three years and have had record-breaking years ever since I joined.

Please describe some of the broad-stroke issues that should be top of mind for corporate executives as they relate to the financial or other impacts of shifts towards clean energy and the prevalence of ESG-related dialogue.

For corporations and investors looking to enter the clean energy space, there's a tremendous amount of opportunity. Although solar, wind and clean energy in general have been growing by leaps and bounds for the past 10 years, the clean energy sector only accounts for 22 percent of total US electricity generation. And the Inflation Reduction Act passed in 2022 added more fuel to the fire. That bill alone created new and improved tax credits and incentives at the federal and state levels, and funding through federal government loan programs. In short, the industry is rapidly

maturing. For investors looking at the space, there are primarily three options available.

One could start their own development company, where you go out and originate the solar or wind asset itself. You find the land, get the interconnection agreement, find a buyer for the power, and then a financial partner usually comes in to assist you in financing the construction. Development offers the greatest return, but also comes with the greatest risk.

Another option is providing capital to developers or becoming a long-term asset owner. You’re investing and acquiring other companies’ development projects or operational projects. Your return here is less than pure play development, but the risk is likewise reduced.

The third option is investing in “tax equity,” or the tax credits generated by clean energy projects. The tax credits on solar and wind projects, and on all clean energy technologies nowadays, are a very important piece to getting these projects financed. Most developers and long-term project owners lack sufficient tax liability to take advantage of the amount of credits produced by their projects, and so they turn to corporate tax-payers to monetize the credits for them. For a tax equity investor, in exchange for their investment, they receive tax credits, cash, and depreciation benefits from the ownership of the project.

The risk-return profile on tax equity is tremendous, as you can often receive above average returns with comparatively little risk. Tax equity investments are tailored to meet the specific needs of the investor; and because tax equity is the scarcest source of funding in the capital stack, tax equity typically has considerable leverage when negotiating the terms of their investment.

Specifically, what can you tell us about newly passed GAAP guidance allowing clean energy tax equity investments to use proportional amortization?

This one is huge! In March of this year, the FASB issued ASU 2023-02, which expands the universe of tax equity investments that may elect to apply the proportional

amortization method of accounting. The ability to apply proportional amortization removes a layer of complexity from the GAAP accounting for tax credit transactions. Previously, renewable energy tax equity investments typically had to show a large loss “above the line” in their EBITDA, and then a large tax benefit “below the line”. This mismatch caused many publicly traded companies to back away from these investments. But now, under proportional amortization, a lot of the “noise” is removed, and everything is shown on a net basis in the income tax expense (benefit) line.

Having the ability to use this new form of accounting will bring quite a few corporations who passed on tax equity investments before due to the accounting complexity back into the fold. Due to specific facts and circumstances of each investor though, consulting with experienced professionals and accountants on the applicability of proportional amortization is prudent.

What are some of the new features that have been introduced by the Inflation Reduction Act which was passed last year?

As for issues that are top of mind for clean energy participants, the hottest topic right now is the Inflation Reduction Act of 2022 (IRA) that was passed last year, which created almost $400 billion in tax incentives for clean energy projects and technologies. Many of the incentives are still waiting on Treasury and IRS guidance to clarify some of the rules. A key feature of the IRA is that it covers multiple clean energy technologies. As long as a project is a net zero emitter of pollution, the technology is eligible for these tax incentives, mainly through tax credits. So what used to be mainly limited to solar, wind, and a handful of other technologies, are now available to a myriad of new technologies, such as standalone battery storage projects to help grid operators manage the supply and demand of energy on their systems.

There is a large volume of different incentives in the bill, too many to cover in this interview. But, I’ll try to hit on some of the more important ones.

First, the main tax credit programs (the Investment Tax Credit and the Production Tax Credit) have been extended for a minimum of 10 years and most likely longer. This is going to provide certainty and scale to the industry.

Second, the amount of tax credits that a clean energy project can generate has gone way up. The base credit, in terms of the investment tax credit, is 30% (assuming the project is below a certain size or meets prevailing wage and apprenticeship standards), but now there are bonus credits available that when aggregated could bring the credit all the way up to 70% of the project’s cost.

Third, instead of having to be an investor in the underlying project to receive the tax credits, there is now the option of just selling the tax credit to a buyer via a purchase and sale agreement. This has the potential to remove a lot of deal structure complexity and streamline the monetization of the tax credits.

For the aforementioned reasons, the IRA is a hot topic— and will remain so as the Treasury and the IRS crank out guidance on an almost biweekly cadence to address the law’s many provisions needing interpretation.

Please share your observations about the macroeconomic conditions effecting the clean energy industry.

Another topic of conversation these days is how macroeconomic conditions are negatively affecting the clean energy space. The banking liquidity crunch is drying up credit that's long been available to renewable energy developers and investors. With the recent Fed rate hikes and bank failures, banks are tightening their belts and increasing their interest rates, which is making projects less profitable for long-term owners, as well as increasing their underwriting standards, which is drying up credit into the space.

While the IRA has created a considerable momentum and excitement in the space, the bank liquidity crisis and rising interest rates have put a damper on the clean energy industry over the last three months or so. I’m a firm believer these challenges are only short term and will sort themselves

out. We expect the sector’s compound annual growth rate, which has averaged 10 to 15 percent over the past 10 years, to continue at that pace, if not accelerate a bit more.

How are Nationwide Interconnection queues inhibiting clean energy growth?

We have to remember that the US electric grid was not originally designed to accommodate large-scale renewable energy projects, and as a result, the infrastructure needed for interconnection is often insufficient or outdated. The interconnection queues to get clean energy projects approved and hooked up to utility grids is another key issue for developers and investors right now. By some accounts, there are over 10,000 renewable energy projects at the moment across the U.S. looking to get interconnected and approved. The average wait time for a project to get through the interconnection process is five years, substantially longer than it was in the not-too-distant past, when it was one to three years, or even less in some areas. This is particularly concerning as the federal, state, and local governments have published their intentions to hit clean energy mandates in the near future. If these interconnection queues stay at their current levels, it's going to be extremely difficult to hit those mandates. Also, if a project is delayed and cannot be completed in time to take advantage of favorable financing and incentive programs, or if a developer is required to fund significant grid upgrades

Jon Miller is a CFA Charterholder, CFA ESG Investing Certified, and former board member for Solar Energy International. Jon oversees Nelnet’s $500 million solar tax equity portfolio and the company’s tax equity co-investor platform. He has held positions as capital markets advisor, tax equity consultant, investment manager, and debt underwriter. Over his career, Jon has transacted on over $2 billion of solar and wind projects for some of the nation’s largest developers and institutional investors. Reach him at jon.miller@nelnet.net

as a condition to getting a project interconnected, it may no longer be financially viable to build it.

How is ESG impacting investments from state pension funds and other institutional investors?

The last hot topic I’d like to discuss is the ESG backlash we're seeing of late. Several years back BlackRock CEO Larry Fink, in an annual letter to CEOs of companies BlackRock held in its portfolio, basically said, "You need to immediately start incorporating and factoring ESG analysis into your business strategy and address these issues to prove that you're insulated from ESG risks." While companies were already seeing the positive benefits of ESG, Larry was the first to really make it known that companies were now on alert to disclose ESG factors in their annual filings and describe what they’re doing to mitigate ESG risk and create positive impact for people, communities, and the public.

But what started as a wake-up call resulted in a cultural and political flashpoint, and we're starting to see groups saying it’s not a relevant investment factor that fund managers

and underwriters should be analyzing; that there's no direct correlation between ESG issues and financial return and risks.

Recently, the largest state pension fund in Florida removed $2 billion of assets under management from BlackRock over these ESG issues. Texas is doing the same with some of its mandates that fund managers that sell services to some of their public pension institutions take ESG out of the equation. I believe it will be two to five years before the ESG debate sorts itself out. I would note that European countries have already embraced ESG and know the financial benefits and risk-mitigating factors that it can bring to companies and investors. 

This article is for informational purposes only, and the writer’s views are his own and do not constitute legal, tax, accounting, investment or other professional advice. You should consult your professional adviser for legal or other professional advice. Nothing herein should be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product, and nothing herein is to be construed as a recommendation to buy or sell any security or class of securities. Investments in investment products managed by Nelnet Renewable Energy are available only to qualified, “accredited investors,” as such term is defined in federal securities laws.

McGuireWoods Publishes Annual Pro Bono Report

ANGIE ZIMMERN M C GUIREWOODS LLP

In 2022, 80% of McGuireWoods lawyers, as well as paralegals and professional staff, contributed their time and talents to providing free legal services to those who could not otherwise afford the assistance. The need for pro bono assistance continues to outpace the pro bono resources available, but the firm is making strides in the industry’s effort to close that gap.

As described in McGuireWoods’ 2022 Pro Bono Report, the firm recorded more than 38,000 hours of pro bono work in 2022, opened more than 400 new pro bono engagements and worked on more than 600 existing matters.

McGuireWoods lawyers helped to restore the freedom of people unjustly convicted of crimes, aided communities rocked by tragedy and helped veterans who bravely served their country. They also helped low-income clients overcome legal problems affecting their basic needs — remedying poor housing conditions, avoiding unlawful evictions, obtaining protective orders against abusers and assisting with child custody issues.

These efforts have not gone unnoticed. As described in the report, McGuireWoods received awards, including the Corporate Pro Bono Award presented by the Pro Bono Institute to Dominion Energy, VCU Health and McGuireWoods for their innovative pro bono medical-legal partnership. McGuireWoods also accepted the National Veterans Legal Services Program’s Pro Bono Partner of the Year Award, recognizing the firm’s outstanding commitment to serving veterans.

The report lists the valuable pro bono partnerships the firm has formed with corporate clients and nonprofit organizations seeking justice for the underserved, including the award-winning Charlotte Triage program, and called out some high-profile pro bono cases, including efforts assisting Afghan and Ukrainian refugees.

The publication also highlights the 2022 McGuireWoods Pro Bono Awards recognizing outstanding pro bono service and commitment among firm lawyers and professional staff.

Check out the full report here.

LEGAL OPERATIONS

EXECUTIVE LEADERSHIP FORUM

Tarrytown House Estate

September 26, 2023

Legal Operations Executive Leadership Forum, created by CCBJ, is designed for law department and law firm operations executives. This will be an interactive, high level gathering exchange led by individuals revolutionizing the role legal operations in today’s corporations.

REGISTER NOW

TOPICS INCLUDE

• Designing the Future of Legal Operations

• Recruiting & Retaining Talent

• Enterprise Legal Process Management

• Developing an Authentic Diversity, Equity & Inclusion Culture

• Winning Collaborations with Outside Counsel

LEGAL TECH STARTUP SPOTLIGHT

CEO: Kira Unger

HQ: Stockholm, Sweden

# of Employees: 65

Total Raised: $14.66M

Growth Rate: 1.08% (95th %ile)

Institutional Investors:

• Atomico

• European Investment Fund

@Pocketlaw_SE

www.pocketlaw.com/

Description:

MEDIAN 3.19x

SIZE MULTIPLE

Developer of a cloud-based contract management software designed to offer legal services to businesses. The company's software empowers non-legal and legal alike to create contracts immediately and completely tailored to their requirements and needs and offers hundreds of templates and guides and standard contract automation technology, enabling companies to manage their everyday legal needs.

Most Recent Financing Status

The company raised EUR 10 million of Series A venture funding in a deal led by Atomico on May 9, 2022. European Investment Fund, Gloria Baeuerlein, and Ischyros New York also participated in the round. The funds will be used by the company to scale its SaaS platform across Europe.