At the end of 2018, legal services were said to be at a high point. But many economic forecasts say that might not continue that way through 2020. Law Week Colorado met with managing partners from small boutique firms to discuss business development, how they operate when business is booming and what they think about predictions of economic dips.
Law Week managing editor Tony Flesor moderated the discussion. Participants were: Muliha Khan of Zupkus & Angell, Lisa Leasure of Faraci Leasure, Thomas Tenenbaum of The Tenenbaum Law Firm, Lauren Varner of Varner Faddis Elite Legal and Reeves Whalen of Whalen Hersh.
LAW WEEK: To start things off, will you introduce yourselves and what your firm structure looks like?
VARNER: I’m Lauren Varner, and our firm is Varner Faddis Elite Legal. My fiancé and I own it. It’s primarily personal injury. He does a little bit of criminal defense as well. We currently have two paralegals and a receptionist. We opened in August of 2018.
KHAN: My name is Muliha Khan and I’m with the law firm of Zupkus & Angell. I’m actually a second-generation owner of the firm. It’s been around for about 25 years, and I was one of two partners who took over the business from the founding members, who are now retired. This happened organically, but I am now the only owner of the firm. I have four full-time associate attorneys. I have an independent contractor attorney, and I have a paralegal and a firm administrator, and we’re looking to grow, so that’s super exciting. We practice insurance defense, so a combination of representing insureds and then representing insurance companies in bad-faith lawsuits.
TENENBAUM: I’ve been practicing law now for, oh, my gosh, 46 years. I started in New York with the SEC as a prosecutor there. My background is securities law as a switch hitter. My practice has always been very narrowly focused.
Basically, that’s all I do, that’s all my firm does. We do mostly securities, regulatory defense. I have been in the small firm environment since 2001. I formed my own firm. The most I’ve ever had full-time attorneys would be three of us. With technology, which I am slow to adapt to, I found that I could cut that to two. We do work with other law firms and find that’s a good way to augment our practice. I do expand and contract with attorneys, paralegals in a rare event that we’re unsuccessful and have to go to trial.
LEASURE: My name is Lisa Leasure, and I’m with the law firm Faraci Leasure. We are an insurance defense firm. We focus primarily on medical malpractice defense cases and other health care-related cases, board actions for physicians, representation of hospitals for various matters, but primarily the insurance companies are our clients, the physicians or PAs.
I have one partner, Paul Faraci, and I’ve been working with Paul my entire legal career, which is about 19, almost 20 years now in various firms. We have four attorneys full time, one attorney that we contract with as needed when we get an abundance of work. And then we have one-and-a-half paralegals right now, looking to add another one as we are in the boom time, like you said, and everyone is pretty busy.
WHALEN: My name is Reeves Whalen. I’m at Whalen Hersh. I came from and grew up in a large firm environment. I used to work for another firm where I was a partner. I was there for about 10 or 12 years. I left there in 2017, started my own practice with my partner and still exclusively do personal injury. We have an office that’s in the Tech Center, but we also opened up an office in Colorado Springs where we have got a few folks down there.
LAW WEEK: Depending on who you ask right now, legal services might be booming, but some economic predictions are also saying that we’re going to see some slowdown. With everyone here having a litigation-centric practice, we’re all approaching things from a similar mindset maybe, even though we have some differently structured firms and plaintiff’s side and defense.
I’m curious in starting off with that small firm litigation focus. What are some of the most important things for you for business development? And what are you seeing right now when that market might be a little stronger?
WHALEN: I think when you transition from a large firm to a boutique firm, you have to be offering something very different, and I think that your approach has to be different. You have to instill in clients a high degree of confidence in making decisions to hire you, understanding that you’re not out-resourced, because a lot of large law firms will consistently tell people that they have incredible resources, and they do. But I think that in a lot of situations if you’re efficient and you manage things the right way and you’ve got a very strong track record, you can offer equivalent if not better services.
The one thing that I think is really important is that when you run your own firm, clients are making incredible decisions — if not some of the biggest decisions they’ve ever made in their life to hire you — and you have to make yourself available. I always tell my partner: don’t make someone wait until Monday. People are under a lot of stress, and you’re dealing with complex issues. And if you’ve had a long day on a Friday, it’s incumbent upon you to call them on that Saturday, because you’ll give them a great sense of relief. But at the same time, you’re making yourself available to them and you’re promoting a high level of communication. And my experience in the past has been that’s not what you got out of large firms, so altering the expectations, I think, is huge, and I think that promotes future business.
LAW WEEK: And I think your practice might be a little similar Lauren, in starting your own firm somewhat recently.
VARNER: Very similar. I think that the goal should not be to compete with the bigger firms when you have a boutique firm — because it’s a totally different paradigm — you have to embrace it and should focus your marketing based upon accessibility.
On the accessibility issue, we give all of our clients our cell phone numbers so they can text us. I think that’s really important with younger adults because, you know, how do you reach them? If we’re talking about market development, what is going to appeal to that demographic? So, things like social media — we use social media a great deal for marketing purposes and business development. But also being accessible by e-mail or by text, because that’s what a lot of these younger adults do.
LEASURE: From a defense firm perspective, I feel like I really agree with Reeves and Lauren. Even on our side of the table, responsiveness and accessibility are really important.
If you get good client feedback, good results, if your clients like you, you’re going to keep getting that work because there will be insurance claims and they will need counsel. So you really have to prove yourself on your interactions with your clients, being accessible, being responsive. I absolutely do the same thing you do, Reeves. I make sure I don’t wait until the next day. When people get sued, it’s incredibly distressing to them, and they want to hear from their lawyer right away, not in two days or five days. So, I think that’s really important.
I think the other thing is when we’re talking about boutique firms versus big firms and their resources, resourcefulness and efficiency are what we really offer that I think sets us apart from some of the bigger firms. We have always taken the creative approach to putting together our defenses and really being efficient with resources. I think we come up with just as good defenses, if not better, than people that have a lot of ample resources at bigger firms at a much, much lower cost, for sure.
TENENBAUM: I feel that ours, it’s been quite a ride. Over the years, right, it’s changed tremendously.
In the beginning, for me, it was all very relational, it was building networks. People are talking about referral sources, and your existing clients or previous clients are the best source as business referral. I still find that. But what we also found is that it’s a different marketplace as well, with different economics.
Over time, I have become, again, more active in publishing and speaking and doing CLEs. We’ve also had our antenna up. We’re a securities firm. Sure, there are traditional areas and types of industries that have securities practices, but, you know, we look at what are the new areas that get impacted by it.
So we’re all over cryptocurrency. The SEC is coming down hard on that. Cannabis, the same thing. We have started over the years reaching out with some newsletters and social media marketing.
Bottom line, it’s still about going to lunch with people. A lot of clients, it’s long-time relationships. It’s staying in touch when you’re not working with them. So it’s been a combination of those things for us.
KHAN: Just to pivot off of some of the points made, we do actually use the resources of an outside marketing consultant. For me, I feel as though lawyers have good ideas, but that doesn’t mean that we know how to necessarily market ourselves. At least I don’t. So I just needed someone that had that knowledge to keep us on track and develop a strategy and develop goals for us. That’s been really helpful as a small firm, because I know some of these big firms will have a whole separate marketing department. And when you’re a boutique firm, you don’t necessarily have that as a resource.
I always say to the lawyers at our firm that good work is a form of marketing in and of itself, and that has always been a way for us to have a steady flow of work and to never be dismissive of that.
And I always think as an attorney, when you’re practicing law, stay true to yourself. The same applies to when you’re marketing. If you’re shy, why would you seek out marketing opportunities where you have to walk into a room and speak to strangers? If that’s not something that makes you feel comfortable, then seek out something else. If you don’t want to speak, then write an article. And if you’re patient, I think the work will come to you because people start recognizing your name.
And then the last thing I would say is just to be patient. It’s amazing how you have an opportunity and you meet someone and then five years later they call you. And I haven’t realized that until I think the last two years where my efforts are finally paying off. So then the next challenge is how do you keep up with all the work?
WHALEN: I have hired an outside company for social media and for SEO, and I think that’s a wonderful endeavor. I think if you miss the boat on that, then you compromise your ability to be in the game long-term, so you have to do it. It’s a necessity, but 99% of my business still comes from direct referrals. So I think it’s on the horizon, it’s part of the outlook and it’s something you have to do to compete. But at the same time, you always go back to where do your clients come from? They come from relationship building like Tom said.
VARNER: I think that this idea about building human connections with your clients extends to potential referral resources, because especially in personal injury, yes, we’re getting referrals from current clients, past clients and we’re getting referrals from medical providers, we’re getting referrals from attorneys who practice in other areas. So we invest a lot of our marketing funds on those lunches and those dinners because it’s a good opportunity for those potential referral resources to really get to know you.
LAW WEEK: What you said, Muliha, about knowing yourself — on doing social media or writing articles — knowing what your strengths are. Obviously you don’t have an army of marketing people, so would you say you have to be fairly selective about how you’re going after some of these things? There is only so much time, right?
KHAN: I do think you have to know yourself as a person, you have to know yourself as an attorney. I remember the founders of the firm, they mentored me when it came to practicing law but also marketing. They would always say: Just be yourself, because you will connect with the right people. They’ll see something in you that they like, and they’ll hire you. It’s not just about you as an attorney, but you as a person. What are your values?
I was afraid when I was a young lawyer. I didn’t know what that meant, but I think it’s really, really important, and it’s critical that you do have a sense of who you are. Because if you don’t know that, what are you selling at the end of the day?
So it’s a discussion that we have at our firm. I don’t have all the answers, but I think it’s a good discussion to have when you’re focusing on business development.
LEASURE: I think that also goes to Tony’s question about how you prioritize and how do you make time to do things like speaking or writing. One thing that I have tried to do over the years is really limit myself to things I feel like I will really be passionate about and be able to convey to the audience.
So I think that’s how Paul and I have gone about doing speaking or writing engagements over the years. Do I really have something to bring to this topic, and do I feel passionate and liven the audience with it?
Given that we don’t have all this unlimited time to market, we have been pretty selective about where we spend our time on those types of activities. I’ve always enjoyed what we have done but have had to limit ourselves somewhat in putting ourselves out there, because we’ve got to get the work done, too.
LAW WEEK: We started off with this premise that everything was at a high point at the end of 2018. Have you all experienced that as well? How are you handling everything that might be coming in and are you planning ahead — if that’s going to turn as some people are predicting?
TENENBAUM: I think we all like to think we’re proactive in planning ahead, but it’s something that’s clearly not predictable. It’s like, I think a lot of us sit down at the beginning of the day, have our day planned, and within a half-hour it’s not the same. So I think adaptability and adjusting, and rolling with it is very important.
In terms of the time devoted, I think it’s something that maybe some people have innately, other people, you learn from experience. As a small firm we’re on an hourly basis. Once in a while we’ll do a contingency on an arbitration, and I’ll tell you the truth, I’m never comfortable with that. We have finite resources, and so we go through case evaluation the same way, and you have to be very careful with client ability to pay, and not getting into something where they’re not going to be able to continue to fund it if it is going to go the distance. Those type of factors for us are just very important.
We haven’t experienced it in a while, but I think a trap that a lot of us small firms over time have fallen into is when it gets lean, there is a tendency to say: Oh, there is a case coming in, and that could become, very quickly, a red flag client you don’t want to be involved with.
To me, it’s, as you were saying, marketing patience with running your firm. After a while I think you develop confidence. You’ve been through a lot of things and usually it works out just fine. I used to say there is safety in big firms. I’m not so sure that’s the case anymore either. At the end of the day, we’re businesspeople, too, not just lawyers, and we’ve got to mind the store and the allocation of the resources, and the choices you make. It can be really critical.
KHAN: There are a number of lawsuits out there, whether you’re defending them or you’re initiating them. Everybody in this town is busy right now. For me, I always think about delegation. What can I delegate? What is something that someone else at my firm could do? And I think that’s a skill. You have to learn to let go, but it’s a skill, because there are certain tasks as a managing partner you simply can’t delegate.
I think the second part of that is efficiency. What can we do as a boutique firm or a small firm to be as efficient as possible? And I think the two ways we have tackled that is using technology to be as efficient as we can. In a project that would normally take 20 hours, maybe with the use of technology would only take 10. And then also implementing protocols and procedures to make you more efficient. And I think that maybe works better when you’re doing defense work, because some things can be formulaic, but to the extent you can establish a protocol so that when you have that high volume of cases, care is taken on each and every case. I think that’s really, really important. And I think that’s one way our firm is able to keep up with that high volume and that high workload.
LAW WEEK: What are some of the technologies you’re talking about?
KHAN: This sounds really simple, but even something like document review, the ability for me, as the partner on the case, to play around, and when I’m looking at initial disclosures, how can we centralize my review of initial disclosure documents? What PDF programs are out there so that I’m not writing handwritten notes that are getting thrown away? How can we centralize that process?
I know it sounds really simple, but I think that happens a lot at firms where you have multiple attorneys touching a file, but nothing is centralized. If there is an attorney who looks at those initial disclosure documents and makes notes on the third page and it’s centralized, that can really help streamline the defense of a case.
And this may be something else that comes up, but remote access seems to be something that for the younger generation of lawyers it’s an expectation, but it also helps attorneys be more efficient. I think there are times, and I’m tracking how much everyone is billing, and the days that people are working from home are sometimes their most efficient days, because they’re not being interrupted constantly. I think that being said, it’s necessary to be present in the office at times and have in-person discussions, but just having the technology to let someone work from home as though they’re in the office, I think that really helps with the efficiency of a smaller boutique firm.
WHALEN: For a firm that is doing strictly contingency-based work, you have to be cognizant of the fact that there are ups and downs. Volume will change. Your work product is not going to change, but you have to be aware of overhead, and I think that you have to be disciplined about it. There are going to be times when you’re doing really well, and just because you have it doesn’t mean you ought to spend it. I think overhead kills large law firms. Over time it will put them in the ground, and I think you’ve got to be aware of that, and I think you have to be disciplined about the things that you do.
And I think you have to be disciplined about how you grow. And if you have the ability financially to grow, you have to start thinking about is that really what you want for your firm and your practice? Does it make sense to hire more and more lawyers and get larger and larger? You know, the larger the appetite, the more you consume, the more you need to consume. So I think you have to be smart about overhead. You’ve got to be disciplined about it. You have to be looking at it from the perspective that things could change at any point in time and you just have to use good judgment in how you operate your business. Just because you can grow into something larger doesn’t mean that’s the best thing that you should do, and it doesn’t mean it’s the best thing for your clients either.
VARNER: With personal injury, all of our fees are contingency fees. So as a new firm, it’s been very helpful to have my partner, who also does criminal defense, because he charges a flat fee. So that’s helpful to have two different types of fees when you’re waiting, you know, three, four years for a personal injury matter to settle, you then have the money coming in from those criminal cases.
TENENBAUM: I know that the topics we were given were: How do you plan in boom times? How do you plan in a recession? And I thought about it. I plan the same.
I really hear what you’re saying, Reeves, which is in booms, if you’re having a better margin, wonderful, but that doesn’t mean you spend it. You should always look at it that things will lean out — it just happens — and that you’re prepared for it. So it’s not a matter, to me, of sitting down and first reviewing what my vendors are charging. That’s continual. I think it’s about spending wisely and watching your overhead.
WHALEN: I think the number one rule on the overhead is there is recurrent instability at times in the banking industry. Don’t live under a line of credit, because it’s an umbrella that’ll start leaking at some point in time in your life if you rely upon it too much.
LAW WEEK: Since we do have a difference here in the plaintiff side as well as the defense side: Looking ahead, if there is to be any slowdown, how does that affect you differently? Are you planning ahead in the sense that that is going to hit you, or when things slow down, does that necessarily mean that litigation is slowing down, too? How are you looking at it in that way?
LEASURE: I haven’t seen any slowdown coming, at least in the medical malpractice world. It seems like there are a lot of cases being filed right now. There definitely is an uptick from maybe a year ago in terms of the numbers of filings, and I think that’s trending across the country as far as I can tell.
But I agree with something Tom said, which is we plan the same no matter what, whether we’re in a boom time or not in terms of really judicious management of our overhead. I think how you get through the leaner times is not having a lot of large obligations.
And then when we do have the leaner times — which you do even on the insurance side when filings go down or there are not as many claims — I personally just use that as a time in my own life to work a little less hard and spend more time with my kids and my family. And then when I get into the really heavy-duty work times, I feel like that’s where my balance comes from.
KHAN: To echo what you said, I think when I first started practicing law, I would panic when I wasn’t busy. And now I go grocery shopping because there is no food in my fridge and I think, “Oh, O.K., well, I don’t have that much going on this week, let me catch up on life.”
I just think, fortunately or unfortunately, there could be times where there aren’t as many lawsuits being filed, but I just think everyone at this table, we are not in fear of not being able to operate our businesses just because of the nature of litigation.
That being said, I do practice employment law, and I’ve explored prelitigation services that we can offer in the form of training and reviewing manuals and things like that. And that’s more just because it interests me, but I think it’s a dual purpose, because to the extent we are lighter on litigation, that is a service that is still of use to many of our clients.
LAW WEEK: One thing that it sounded like pretty much everyone mentioned is the flexibility that’s needed. Whether you’re contracting with other firms or just having the ability to expand and contract as needed. I’m curious if you have insight how that plays into your overall business strategy and, you know, how you might use that to your advantage.
TENENBAUM: In securities, there is a long gap. I used to do a lot of co-counsel work around 2005 to 2010. I do expert witness work, I do consulting work and that is, in a way, not the first line, but it does augment the practice, and I like it a lot.
But if we are really busy, I’ll turn that down because you can’t do everything within timelines that people expect. But I think that’s one other thing that can be done. I’m always open. I try to be creative.
I read a lot about law firm management and successes and failures. You know, I’ve made mistakes and I’m sure as heck not going to try to repeat them. It just seems to get better and better.
People say, “When are you going to hang it up?” I don’t know, feet first? I just enjoy it too much. I really do. It’s good people, it’s the challenge, intellectual challenge and it is relational. My clients are friends, other lawyers are friends. It’s a very collegial place in Denver. So that’s the nature of it. I think we’re all of the same mentality from what I’m hearing. It’s not wanting to go into that institutionalized environment.
WHALEN: People ask me sometimes what my hobby is. I have found over the years that I really love what I do, and my job is my hobby. And you need separation in life, because you do need to spend time with your family and you do need to spend time away from work — but I get a lot of joy out of doing my job, and it’s become my hobby over the years. I think if you can get a lot of satisfaction and joy out it, it makes it that much easier.
VARNER: We don’t do much cocounseling with other firms, but just going off of what you were saying about the Denver community, it’s such an amazing place to practice, because you essentially have access to an unlimited number of mentors.
I have had numerous occasions where I’ve posted [on a listserv] and you get so many replies and people just say, “You can call me, contact me.” And, again, it’s just like having all of these mentors available to you, which is amazing.