A company preparing to manage and trade forestry rights to help companies offset carbon emissions tapped the expertise of its asset pool fundraiser to select a firm to work on its legal needs, the company’s CEO told Legal Dive.
Spooz, Inc., is a publicly traded company that’s putting the finishing touches on a business model that uses technology to algorithmically trade carbon credits for investors in a $2 billion pool of local forestry assets. Investors use the credits generated by the forests, which help mitigate the impact of greenhouse-gas emissions, to reduce their carbon footprint.
“It’s a very quickly growing industry,” says Paul Strickland, CEO of the company.
Strickland said he and COO Errol Stone, a lawyer and former Securities and Exchange Commission (SEC) prosecutor who is functioning as the company’s legal point person, were looking for a law firm whose specialties encompass all of the company’s operations, which are organized under three functions: land purchases, carbon rights management and credits trading.
“We were looking for expertise in carbon offset credits, real estate acquisitions, leasing forestry rights for the carbon credits on a global basis, etc.,” Strickland said.
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Because the company will be trading rights in forests around the world, the executives wanted the law firm to operate around the world as well.
“We’re looking at properties in Costa Rica, South Africa, Canada and the U.S., including Hawaii, and Europe,” Strickland said. “So, we’re truly focused on global real estate assets.”
Rather than start the law-firm search from scratch, Strickland and Stone worked with the head of the firm that’s sponsoring the $2 billion equity pool for purchasing the forestry assets, New York-based Crawford Ventures.
“We went into their Rolodex and started interviewing lawyers,” Strickland said. “We talked to five firms. We had a list of things we wanted and needed and we set up Zoom calls. They weren’t really structured like interviews per se, but we did ask them the questions that we needed to have answered.”
In-house, Spooz has access to a handful of lawyers, including Stone and several from Crawford Ventures, including Evan Katz, the firm's head.
Since they’re both veteran lawyers, Stone and Katz took the lead interviewing the law firms. “Stone is a securities lawyer himself, but he doesn’t have expertise in the carbon area,” Strickland said.
The firm that the company selected, Dentons, is the largest in the world by number of lawyers, with some 12,000 in more than 200 offices in 80 countries. In 2019, it had revenue of about $3 billion.
“They have wide-ranging expertise and a physical footprint everywhere,” said Strickland. “That keeps costs down. That’s for sure.”
Dentons’ first project for the company is completing a Futures Commission Merchant (FCM) disclosure form for submission to the National Futures Association. That will enable it to solicit orders to trade futures contracts, among other things. “We’re [already] duly registered as a commodity pool operator,” he said.
“I think we went about the search in the right way,” Strickland said. “We came out of it with the desired result.”
