Jack Magai has deep roots in the arborist sector. But after 29 years operating Magai Arboriculture, it’s time for him to pass the business to those who have helped it grow.
Under the guidance of the Community Economic Development Clinic within The Justice Center at Albany Law School, Magai has closed on the sole-proprietorship-to-employee-ownership conversion of the company—now called the More Trees Arborist Collective LLC—to his four colleagues.
“It seems like it should be a simple thing, but there are so many levels of complexity. Having someone help—I was impressed day after day with how much work Todd [Arena] and the students were putting in—there were so many small details and edits to make,” Magai said. “I was thankful to have someone helping us so much.”
The clinic worked alongside Magai throughout the process. By converting the business from a sole proprietorship to a collective, Magai can happily retire knowing his life’s work is in good hands.
A worker-owned cooperative is a business owned by all employees equally. Together, they make shared decisions and split profits in proportion to their time spent. The model is used in several industries, from farming to software development.
“Rather than closing when the creator of the business is ready to step back, the co-op process allows for employees to have a stake in their workplace and create a new appreciation for it while simultaneously retaining employment,” said Arena, staff attorney within the Community Economic Development Clinic. “It also allows for continued quality of service for customers, rather than seeing a level of service diminish when a business is sold to a new owner with free reign.”
The idea is catching on.
There are approximately 500 worker-owned co-ops in the United States, up from 350 a decade ago, according to the U.S. Federation of Worker Cooperatives.
Collectively, those co-ops employ more than 8,000 people and generate nearly $400 million in revenue each year, the federation states.
“This conversion aligns exactly with the mission of the Community Economic Development Clinic,” said its director, Professor Ted De Barbieri. “By getting ahead of emerging trends, especially the needs of owners to transition their businesses to new ownership, this process serves as a case study and learning experience for other owners looking to do something similar, and to the attorneys that will serve them. It also equips our students with unique negotiation and deal-closing skills that will benefit them throughout their work after graduation.”
Throughout his career, Magai has fostered a transparent workplace by including colleagues in business decisions. He has found a deep passion for teaching ecological tree care and his approach has attracted his committed employees.
“I mostly base my hiring decisions on personality and getting along, rather than pre-existing skills,” he said.
While most of the current team has mastered the outdoor piece of the business, they’re looking forward to learning more.
“We’re learning as we go. I’m a really good worker, I show up and get the work done. But I am having to learn more of the back-end things,” said Christian Grigoraskos, climber and arborist with More Trees Collective. “The new aspects are interesting, challenging at times, and I am very grateful to have role models as my peers to do this alongside me. There’s also a big part with the cooperative governance. Going from the competitive system approach to this cooperative system approach, I feel like we’re paving the way and advocating for more people to transition businesses.”
The team takes pride in its low-impact methodology. By avoiding the use of aerial lifts—the bucket-style truck one often pictures when an ailing tree is being treated or removed—they do not compromise the root zone by compacting the soil, which may create problems later on.
They’re also mindful of what happens with the trees that need removal.
“A typical tree company chips it and sort of dumps it all because that is the fastest approach,” Magai said. “We try and reduce the number of things that either get landfilled or turned into wood chips—there’s nothing wrong with wood chips but they do create carbon—by heating our houses with it.”
Though Magai plans to stick around for a few more years, he’s looking forward to watching the business succeed from afar one day—a reality made possible in part by the students and staff of the Community Economic Development Clinic. Law students were heavily involved in client communications, drafting agreements, and research surrounding applicable laws, Arena said. “Any new business is an experiment and there are risks right at the beginning, but a conversion has the potential to maintain ongoing success and not risking as much,” he said. “A lot of these changes are made more slowly and you can catch something that’s not working and the business has more chance to survive.”