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May 10, 2013 Articles

Is It Time to Start Your Own Firm?

By Larry D. Smith

It began as an innocuous entry on a 2009 partners meeting agenda: "marketing." It opened with a partner challenging my bio on the firm's website, which, among other professional accomplishments, reflected that I had been elected president of the local voluntary bar of lesbian, gay, bisexual, and transgender (LGBT) attorneys. As he put it, that might lead clients to think that "we support it"—"we" being the firm and "it" being things like gay marriage. I sat quietly as, one by one, other partners around the table chimed in. One said he didn't care personally that I was gay, but he felt that the Bible condemned "it" so he was against "it." Another partner remembered that a client had asked back in the early 1990s (before I had come out to the firm in 1997) whether I was gay, and he had told the client no.

When I asked whether they would feel differently had I been Hispanic and elected president of the Hispanic bar, or a woman and elected to lead the women's bar, another explained that the Supreme Court had protected these groups. Nonplussed that my law partners of more than 20 years needed court direction on what seemed so fundamental about me as a person and professional, I said I would need to reflect on what had been said and how that might affect our future. A junior partner turned to me and said, "But they said it wasn't a deal breaker." She was wrong.

That meeting was not the only reason that I decided to start a new law firm, but it was a catalyst. When it happened, I had a quarter century of experience—some of it as managing partner of my former firm, building it to one of the largest litigation firms in the area. I wasn't really looking for change, but if it was going to occur, I decided sooner was better than later. I had a following of good institutional clients, some money saved, a personal relationship with my banker, a solid reputation in the community, and the support of my family, especially my partner/spouse. Later, on the new firm's anniversary, I wrote: "Those who said we couldn't do it and those who said it would be easy were both wrong."

Starting a law firm in today's economy is not easy. Perhaps it never was. As far as being gay, I recognized that some in the corporate world latently shared my former partners' views. After my departure, colleagues, clients, and potential sources of referral were apparently told that I was leaving to start an all-gay firm. This was news to me as well as to the group who had agreed to go with me, none of whom were gay.

Once we decided to start a new firm, we did some things really right and some not so right. So, based on experience, here are five recommendations for a successful and sustained launch:

Establish your vision and stick to it. Never deviate unless you are absolutely forced by circumstance or reason. A boat without direction goes nowhere . . . or, worse, drifts to a place you absolutely do not want to be.

Honestly evaluate your ability to fulfill your vision and decide how, step by step, you will achieve it. The joy that your closest friends express the day you announce the decision will fade. Clients won't come beat down your door. You, you, have to determine how you will bridge the gap from where you are to where you want to be. If you don't have a concrete, realistic plan, things won't simply "work out." You won't survive.

Surround yourself with high-quality people. This is true of both the internal people you hire and the outside consultants you retain. You will need them more than you know, and they will make you look better and smarter than you really are . . . at least they will if you are smart enough to recognize what they can do and let them do it. Treat them fairly and with respect. Hire slowly but fire quickly if you recognize a real problem that impedes your mission. Not only will this stop the bleeding but also, if you have built the trust of other team members, they will understand, respect, and support you and step in to fulfill the mission. More often than not, my staff has nodded understandingly and whispered, "I knew it was coming." Remember, they can't set the standard or change a problem; only you can. And one way to let your people you know that they are "high quality" is to acknowledge that others are simply not.

Be realistic. You will work harder. Money will not come as quickly as you budgeted. Not all clients will support your decision or do so immediately. Clients, at least the institutional kind I represent, dislike change or controversy. They will wait until the dust settles and stability is apparent before they embrace your new firm. It's easy to take that personally, but from their perspective, it's not meant to be. If you set yourself up to believe that the steady stream of income you enjoyed in a large firm or established firm will continue without disruption, you may find yourself financially squeezed. Discuss with your family or your financial counselor (or both) what you can and cannot afford to absorb or invest, then take another look at your one-to-three-year plan. On the other hand, realize the positive side of the trade-off: achieving one's destiny, self-worth, financial gain, reduction in stress, or a myriad of other positive outcomes. And remember, it's your idea and it's a good one; you may find yourself making more money. Happy doesn't necessarily mean being poor! But, if you're not convinced that your decision to start a new place or how to run it was a good idea, nobody else will either.

From day one, run the place like a business. Being a good businessperson doesn't mean being distant, insensitive, or a bean counter. It means taking account of the prevailing circumstances and guiding the firm with a steady hand. My law partner (who happens to be my sister) and I decided to take advantage of the depressed real estate market by buying a building downtown and building it out for more than double our current number of attorneys as part of a five-year expansion plan. This was not only consistent with our vision but helped our clients understand our confidence and growing depth. Internally, we set standards for conduct and performance, and we insist on personal accountability when there are lapses. If you set billable hour goals or collection timetables, enforce them. If you don't, you will constantly readdress where you said you would be, where you are, and what you wanted to become.

The catalyst at my old firm brought a lot of soul-searching. As disappointing as it was to leave a place I helped build, it has been even more exciting to build something with colleagues and clients who share core values. Although we have yet to hire our first gay employee, our place is filled with a great team of great professionals, laughter, and camaraderie. We still have meetings, but when we talk about "marketing," we generally mean selection of invitations for speaking engagements at upcoming national conferences and having dinner with sophisticated existing and potential clients.

Keywords: litigation, LGBT, law firm, entrepreneur, mission, core values, business plan

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