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Growth MindsetsFirms of all sizes need plans for growth. A group of managing partners discuss strategy at Law Week’s quarterly roundtable


Law Week on Sept. 7 gathered a group of managing partners from Denver law firms to discuss the

growth they’ve seen in their own firms and in the Denver market.

The group included Gene Bernard, Denver office managing partner at Kil-patrick Townsend & Stockton; Jennifer Evans, Denver office managing partner at Polsinelli; Craig Fleishman, managing shareholder at Fleishman & Shapiro; and Stephen Shapiro, a partner at Shapiro Bieging Barber Otteson. Tony Flesor, managing editor of Law Week Colorado, moderated the discussion, and Hunter + Geist reported it.

I’ve seen in the last two quarters of the year so far, there’s been maybe

surprising growth for the law industry. It’s still described as slow but going upward, according to the Citi Private Bank’s Law Firm Group.

Along with that, demand has been go-ing up as well. So I’m curious in hearing from you what you’ve seen industrywide and in the local market; if the demand por-tion of that is accurate, as well; and then also, how do you manage your own growth while also doing things that are going to make your clients happy?

To start off, I know we have people from different size firms, different geo-graphic footprints and different practice areas. Will you each give a quick introduc-tion of who you are and what your firm does, and we can take it from there.

We are the midgets around the ta-ble. We only have six lawyers, 21

employees total, which for me, having been managing partner since ice covered most of the earth, the HR even in a small firm is significant. We are a trial firm. When I began the firm many years ago with Harry Sterling and Ted Gelt, we all did all of the work. And I quickly came to the business understanding that there were only a finite number of hours each of us could bill. And there was, in essence, a ceil-ing as far as how much we could charge. So I hired a marketing person and said, ‘We’re a trial firm. How does one market a trial firm?’ And he said, ‘Unless you are panel counsel for State Farm, which is in the business of litigation, or you represent Co-ors, which is a target defendant, there’s no way that you can market a small trial firm.’

And having thought about that for a while, it occurred to me that the only way for us to continue profitability was for me to bring out a contingency fee practice, where you can get $1,000 an hour, $1,500 an hour on decent-sized cases. And that way we could maintain our profitability.

And so our firm evolved into a firm that not only did hourly work but also con-tingency fee work.

All right. A nice overview of what your strategy is right off the bat.

We’re also boutique. We have a combination of employees and

contract attorneys, which has been a good model for us in terms of matching the re-sources to our workflow. Our primary drivers are insurance coverage for policy-holders, banking, regulatory mergers and

securities. And also, we do insolvency and general commercial litigation for those cli-ents. Most of us have come from larger firms and now enjoy the small firm model. And there are pros and cons. We just had our 15-year anniversary, and I can’t believe it because that means I was a young man when I started the firm and no longer.

We’re one of the larger firms I think you’re referring to. Our firm

varies between 650 to 700 lawyers spread across the U.S. And it has some offices in Asia, as well. We are focused on a number of areas, including IP. So I’m the office managing partner of our Denver office, which was originally part of a boutique called Townsend Townsend and Crew be-fore the merger with Kilpatrick Stockton. And so the combined Kilpatrick Townsend firm still has a very strong IP focus. We also have a strong focus on construction law, real estate and banking. I think we are getting more and more interested in trying to develop a bigger corporate practice than we currently have with a focus on technol-ogy companies that I think matches well to our strong IP focus at our firm.

At Polsinelli, have about 800 law-yers across the U.S. We’re just do-

mestic. That’s the plan. We have sort of five strategic areas that we’re focused on, including financial services, real estate, sci-ence and technology or IP, business corpo-rate work, and then health care. I’m a health care lawyer. And we’re the second largest health care firm in the country. We have grown in a number of cities to sort of go where our clients need us to be. And that’s really driven the majority of our

JENNIFER EVANS, LEFT, SAID CLIENT NEEDS DRIVE POLSINELLI’S GROWTH.PHOTO: LAW WEEK, HANNAH BLATTER


growth. A large number of our lawyers are in low-overhead cities. And that really helps us manage costs for clients and makes sure that we can appropriately staff things.

And so from there, I would ask for your assessment of the industry,

the market, if that kind of follows in line with what some of the reports might have said regarding growth and demand.

Well, I wouldn’t say it’s just like the dot-com era, where it’s sky’s-the-

limit growth in an unrealistic sense. On the other hand, it’s also not the despair of 2008 and 2009 either. So I’d say basically for at least the past five years, it’s been slow, steady growth. Single-digit growth. And people’s expectations are there too. I think psychologically, that’s actually a good thing. People’s expectations aren’t unrealis-tically optimistic or pessimistic right now.

And with a firm your size, slow, steady growth, that’s a good thing.

Right. Except when you have sud-den changes in growth due to

mergers. So that’s the other thing that’s kind of the wild card with the bigger firms. We’re always looking for opportunities for good mergers. We’re not, as far as I know, looking to be acquired, but that I guess could be a possibility as well. And again, as I say, I think if there are certain areas of expertise where it’s hard to get that exper-tise into a firm with just one or two law-yers. It’s much easier to do it if you have a boutique firm that can offer that kind of practice.

Would everyone else agree that you’re seeing the slow, steady

growth? With different practice areas, I as-sume things might play out differently, also.

I’ll jump in quickly. We have diverse practice groups, and so our insol-

vency practice was blowing and going in the dark days of 2008 through ’12. And so that has slowed down. Our banking and financial services group has been very busy, and it’s a reflection of banks getting healthier and starting to acquire one an-other. And if you’re fortunate, you repre-sent the acquiror instead of the acquiree, and you continue to have a client.

I do a lot of insurance coverage. That’s my main practice. And construction has been a good, steady source of work. And then also doing work for banks on cyber policies. That’s a whole, big new issue: pro-tecting against data breaches and dealing with data breaches.

We don’t have necessarily a growth strategy. We’re very ad hoc. If we have

more work than people, we try to get more people. And we’re also fairly opportunistic in our hiring. If we have someone who crosses our path that we think would be a good fit, professionally and personally, then we’ll look at that person. We found it a little tough to get people in our niche practices of insurance and the financial services, so when we venture out there looking, we find that’s not very plentiful. So we’re actually in the process now of try-ing to match up our staffing to our work-load, which is a good problem to have.

Your question about demand, it’s not just about how much demand

there is, but what is the demand for. And I think one of the things we have noticed, in the last five years especially, is that clients have gotten a lot more sophisticated about what kind of legal services they want to buy and how they want to partner with their law firms. For us, a portion of the growth that we have done has been in alignment with that strategy that we see coming from our clients, where we can work for longer periods of time in their industries and be responsive to them in a bunch of ways.

Different clients want different things, whether it’s alternative fee arrangements or trying to innovate how you do your work, so you share your work product with them. And then they use it without

you later through a portal system. So that’s been, I think, a really effective way to not just respond to demand in terms of num-bers, but in terms of what kind of services clients are really looking for.

But growth is definitely opportunistic. We don’t have a number we want to get to. We have grown a lot. And sometimes I think people are surprised that we’ve grown so much, because it wasn’t some master plan that we just marched out. Re-ally our master plan is more about what industries we want to serve. And so when you’re doing that strategically, and oppor-tunities come into those industries, that results in growth. It’s been very fun.

Since I’ve been at Polsinelli, we have grown a lot. The Denver office has tripled in size since my group joined about five and a half years ago.

I’m going to come back around to that. But Craig, with your litigation

focus, how do you go about adjusting for fluctuation in demand? How have you ap-proached that situation?

I guess one of the reasons that we changed our paradigm from growth

to less is more, so to speak, is a significant change over the last couple of decades in a work ethic commitment.

I used to see every single pleading had three or four lawyers listed on it. And I don’t think the clients are as willing to accept bigger firms training associates by listing a group of them and maintain prof-itability by having three or four lawyers on the same matter. It’s been one of our selling points that we have one lawyer or two lawyers at the most working on mat-ters. So that is something that we’ve had to work at from a marketing standpoint, from a utilization of our associates’ standpoint as well. And we have tried to give them more first-chair responsibility earlier than one would see in a bigger firm. And as a general statement, it’s worked, and they appreciate having the responsibility that goes with having first-chair responsibility. And we try to mentor them as much as we can to bring them along faster, so we don’t have to rely so much on growth.

There are a few different strategies

here. I am curious how you manage those. Jennifer, you are talking about really rapid growth over a few years. Just going back to that, how do you manage that in a way that you’re not overgrowing?

I think it’s especially challenging at a firm like Polsinelli because of the

way we serve clients. We really work to get the right lawyer on every assignment and without regard to what city they’re in. And that can be really great savings for the cli-ent in terms of experience and rate, but it requires a little bit more tension from all of us to make sure that we really know everything that’s happened.

I think part of the reason that we’ve been able to grow pretty successfully in this period of time is because it turns out we’re very good at integration. And that has been the linchpin to making sure that when we do bring like-minded lawyers into the firm, we’re able to introduce them to all of their colleagues and their practices to their colleagues’ practices with great efficiency. And that enables us to sort of bring them into the model right away.

You know what’s also really impor-tant, though — we haven’t said anything about this yet. We talked about the culture. Growth for growth’s sake is a terrible idea really, because it will ruin the good works that come from people who have been practicing in the same firm for a long time, who have built these relationships, and who really can contribute not only to cli-ents but to growing and training new law-yers. So we’ve got to make sure we get the right folks to come in and who are willing and comfortable with our model of work-ing as a unit as opposed to having a bunch of individuals doing work under the same heading.

Steve, you mentioned your ad hoc growth — I have the same ques-

tion, as far as how you strategize, when that’s needed and how to bring people in.

We do some planning. We’re better planners than implementers. We

certainly are aware of where our clients are and what our clients’ needs are. But when you’re a small firm — or a large firm — we’re just busy doing the work. So

GENE BERNARD SAYS KILPATRICK TOWNSEND & STOCKTON HAS SEEN SLOW AND STEADY GROWTH.

PHOTO: LAW WEEK, HANNAH BLATTER

oftentimes our plans go out the window. We walk out of a planning meeting, and we have 100 emails and five voice mails, and we’re off and running.

And so, really, when we hire, it’s when we’re at a point that we literally look around and either need a skill set or we need some-one who can assist us with the workflow that we have. And we have to be measured about our growth because of our size. We can’t just absorb lots of numbers, because then our overhead starts to go negative. So we try to grow in a measured way. It is important to find people who we think will fit. And everybody has a different per-sonality, but we try to get people who we generally enjoy seeing every day. And we are a small office. That’s really important.

For a big office too.

I’d just like to reiterate a point Steve made about all of us being working

managers, which is very different than just being managers.

That point that we can have a meet-ing and then as soon as we get out of that meeting, we’ve got a lot of things to do, and clients have left you voice mails and emails. And it’s very easy to forget what you just talked about in that meeting. For that reason, I think it’s important to be very focused about what you’re going to have a meeting about and come up with some actionable goals that are reasonable for people who are working managers.

So for example, when we did this merger six years ago, we quickly got rid of sort of the grand, lofty plan ideas and focused in on, for example, the patent law has changed a lot, and with that has come changes in how you can challenge patents. And every firm has had a marketing plan for how to go after that business, as have we.

But we’ve assigned very specific tasks. Write an article, tap this or tap that, come up with a package of action items that seem to happen over and over in these proceedings that you can give to a client quickly, even though you yourself didn’t spend a couple of days writing that. Those kinds of things are the things I think that work. I think just sort of grand five-year planning Soviet style does not work in a law firm, because we’re working managers. We just don’t have a lot of time for that.

That’s where the nights and week-ends come in.

I think lawyers are very good at problem identification. Where I

think we, as a profession, really do a terri-ble job is we don’t go through the second step well, which is identifying alternative potential solutions to that problem. And

the worst is implementing what we believe to be the best of those alternatives. And I think that the well-managed firms do all three. Most firms only do Point No. 1.

I wanted to also address the point of client satisfaction. How do you

plan your own growth? How do you imple-ment your own strategies and look at things like increasing revenue while also doing all of that while making sure you’re still keeping your clients happy?

Well, it’s a cliché to say it’s all about communication. It really is. And

lawyers I think, especially successful law-yers, aren’t necessarily used to giving or receiving a lot of feedback. They’ve been successful all the way through. They’ve earned a lot of As, and they haven’t neces-sarily had to dig in and say, ‘Why didn’t I do that very well, and how can I do that better?’ And so we really try to talk about that intentionally — giving feedback all the way around and asking for feedback.

You know, our clients are lawyers, too, and so they are just as unpracticed at tell-ing us stuff we don’t want to hear as any of the rest of us in the profession. But we voice some tools. We ask third parties to go ask our clients how we’re doing, interview our clients. And I really try — although, it is challenging to say to your client, How could we have done this better?

You don’t want to set up something

that puts you in a position to be criticized. But if all they tell you is, ‘That was great,’ you’re just going to do the exact same thing again, and it’s really not a growth op-portunity. So sort of gingerly treading into those waters of saying, ‘How can we make this better?’ is really, really important. We don’t get everything perfect every time, but we get better every time, I think. We try to.

How do you go about having those conversations?

I’m very direct and say, ‘Did that work for you? Did we have the

staffing right? Does this feel like the right personality? It’s the right skill set, but is it the right personality?’ Some of my clients now will really dialog about that. I think I’m lucky because, in my career path, I spent a fair amount of time on the other side of the table, in-house, and so I know what I didn’t like from my lawyers. And I try to think about that and ask those ques-tions, what my worries were, and at least put that out there to my clients and say, Do you like X, or do you like Y?

Yeah. I think managing client ex-pectations is an important part of

what we do. Many clients are sophisticated purchasers of legal services and have an idea of what’s going on and have some trust. Others that we get are new to the legal process and distrust everything. And so it’s important to educate your clients on what’s involved: how much time, how much expense. Also, with litigation, I think there’s a brain damage effect that people don’t appreciate. And so indoctrinating your clients early and then checking in of-ten is very important. I send my clients copies of everything I’ve sent and every-thing I receive. They can read it or not read it. But they can never come back later and say, ‘I never saw it or got something,’ be-cause I say, ‘You had it. It was up to you to read it or not.’ Or if it’s really important, I make sure that they understand it, if we have a decision point. But I think that’s a really significant part of our practice: is to manage our clients’ expectations and make sure they’re in sync with reality, good times or not.

Well, certainly I will totally agree with you that communication is

key, and we also send our clients a copy of

everything that comes in and goes out. But we do something beyond what the rest of the panel mentioned. Certainly it’s very, very important to get feedback from your clients and find out what the clients like and don’t like about the representation. But I feel that one of the reasons our firm has been so successful as far as referrals are concerned, my partners, after the per-sonal injury or med mal case is over, they work with the clients to get them to finan-cial planners, to get them to CPAs, to help them set up needs trusts, to get them the medical care that they need. So the rela-tionship, as far as we’re concerned, contin-ues beyond the engagement. And same thing with my divorce practice. Between our personal injury and our divorce prac-tice, it’s so emotionally charged. There’s a lot of projection, a lot of transference, a lot of times anger towards us, which is not really reality-based, but it’s based on the client’s frustration, fear, anger. And if they know that you’re not just in it for the money, so to speak, but you’re there for them after the engagement, that’s what causes them to refer you to their family and their friends.

Just to pick up on one point Jenni-fer made about communication, I

couldn’t agree more with that. Also, I’ve discovered this technology called the tele-phone, which I find actually can be more helpful than sending emails. And often-times, I think in particular with our clients who are a little less distrustful and a little more new to the process, sending them a lot of emails, it actually exacerbates prob-lems most of the time. Picking up the phone, talking to them, figuring out exactly what’s bothering them, and then address-ing that I think goes a long way to develop-ing a really good client relationship. And most of the time, over time, the need for telephone calls goes down and the length of the calls goes down.

And I guess my other thought was also to go back around to where

things started in terms of looking at the larger industry picture. Do you have any expectations going forward? I know you’ve mentioned the expectation that there’s go-ing to be this steady, continued growth.

Until there isn’t. I mean, prediction is very hard, especially of the


JENNIFER EVANS SAID POLSINELLI IS GOOD AT INTEGRATION WITH THE FIRM’S CULTURE IN ITS HIRING PRACTICES.PHOTO: LAW WEEK, HANNAH BLATTER


future. And so, yeah, right now we’re see-ing slow, steady growth. But I think we were also seeing that in 2006 and 2007 for 2008. So you never know. But right now, we’re expecting this year to be a lot like last year and next year to be a lot like this year.

Yogi Berra said, ‘The past is diffi-cult to predict.’

It’s fair to say that a lot of growth is driven by the industries of our

clients. And they change and they go through cycles just like we do. And our work is a reflection of their work. And so for us, having a multi-subject law firm, it really helps us. When something’s down, something else can be up. In my particular practice, health care, we are just steady all the time. There are little changes, but it is a very steady practice. And so that’s nice.

And I guess as far as having that diversity of practice groups is also

part of what’s fueling what you’ve been seeing for the past few years as well.

It is.

Yeah. To Steve’s point: we had a booming bankruptcy practice for

quite a few years. In the last few years, I think it’s been much leaner. But the bank-ruptcy people have been, because we are a large platform, able to leverage some of the other practice groups and get more involved with them. So they’ve been get-ting more involved with the corporate work and the underwriting work that the insurance defense people have been doing. But it does go in cycles, absolutely. And to have a multi-practice firm, to Jennifer’s point, it’s nice, because they do tend to

keep the whole ship fairly steady that way.

Agreed. You know, the same thing with clients: if you’re overly reliant

on a single client, you can have the same issue, because that client can go away for a variety of reasons, such as a change in general counsel. And so not only having diverse practice groups that, have some interplay between them in terms of servic-ing the various clients’ needs, but also hav-ing a solid group of clients, so that if one departs, for whatever reason, you can still chug along and not take a huge financial hit, because that happens from time to time.

I don’t know if it’s appropriate for this particular discussion, but one

of the things I wanted to mention is that I’ve noticed, in terms of recruiting, Den-ver is a hot market for attorneys to want to come into, especially younger attorneys and especially from the West Coast. We’ve got a lot of activity where attorneys who are working both in companies as well as law firms, who are in areas like San Fran-cisco, Silicon Valley, San Diego, a lot of them are really interested in coming to Colorado. And I think it may just be that it’s just getting awfully crowded right now in California, and the cost living is getting so high that I hear almost every time I’m out there that somebody’s neighbor is moving to Colorado. So I think it’s a great time to be in the Colorado legal market for that reason.

It’s a great time to be in Colorado for anything. Denver is such a great

city. And I think we have all done a really nice job of growing it and helping invite new companies and new industries here. And they’ve come, and people want to live

here. And what we need to do, especially those of us who have had the pleasure of being here for a while, is make sure that Denver continues to thrive and that Colo-rado continues to thrive and that we don’t lose our culture as a community. Because I think Colorado — and this is a great trait for a lawyer to have — we do a very nice job of working through tough issues when we disagree. We disagree in a very amicable way. And it’s very collegial. And that’s es-sential, I think, to have a thriving commu-nity. So all of us have to protect that.

All of us have mentioned at times mergers, laterals coming in, having

to evaluate them as far as the impact on culture. What I have found in our very small firm is that the laterals who approach us oftentimes do not have much of a book of business and do not have what they perceive to be much opportunity where they are. The ones who have large books of business and good client relations, skills, that sort of thing, firms don’t want them to leave.

That’s right.

And firms do pay them and incen-tivize them not to leave. And it’s a

bit frustrating and discouraging for our little firm that every lawyer that comes to us has $250,000 worth of business or more. It’s not reality.

But it turns out that might just all be on paper.

Exactly right. And the few times that we have brought laterals on,

it’s been frustrating. And oftentimes, not always, we have a lateral who came to us from another firm who is fabulous. But in the main, laterals who approach a small firm like ours end up not being good fits. I’m wondering if any of the other panel see similar things. And one other point to what you said: for our little firm, we do not consider people coming in from out of state. They don’t know our rules. They don’t know the judges. They have no con-tacts from a marketing standpoint. And for us to carry them, so to speak, for sev-eral years just to be plucked off by one of you once they develop, you know, knowl-edge and skills and marketing, it’s too much of a burden for us to hire people from out of state.

I think, Craig, one of the differ-ences in terms of our lateral hiring

is that oftentimes we’re talking about na-tional practices, and geographic location isn’t as important. Knowing a local judge isn’t as important for us as, for example, knowing how to navigate a patent applica-tion through the patent office, which you

can do from anywhere in the country. So your point about lateral hiring, I would say, at the partner level, it’s always very chal-lenging regardless of the size of the firm. You have to do a lot of diligence. And of-tentimes in the diligence process, it’s been my experience that it isn’t a good fit at the end of the day. Part of the reason I think our firm is interested in it is — expanding our corporate group by acquiring or merg-ing with another firm is because it’s been our experience it’s very difficult to pull off one or two partners. If they’re really good, as you say, their firm wants to keep them. And the amount of basically additional money, the premium you have to pay, as-suming they’re even motivated by money, is so much that it just doesn’t justify it as a business expense at the end of the day. So for laterals, it can work, and we’ve had some really good successes with individual lateral partners. But it’s something you have to be very careful about, and you have to do a lot of diligence. Absolutely.

I think that’s right. And you have to know that the recruiting process

doesn’t end when they start. It’s sort of the middle. You know, you meet each oth-er, you learn about each other’s practices, you learn about how you like to practice in your culture, and then you say, Okay. This maybe could be a fit. But then the really hard work starts, to say, Here’s who we are, here’s how you fit in, and here’s how we can all make this work together. And at any stage of that process, it could break down, and it does. There’s no perfect sci-ence. Or if there is, I certainly don’t know it.

No. If you know, we’ll pay for it.

Right.

But it is an opportunity to get to work with people who you enjoy

working with. And I know in our conver-sations, whether they’re the formal con-versations or the informal conversations, we sit there and we say, Who have we prac-ticed with that we really admire? Who do we know that we wish were down the hall? And on that base level, you can start. And, you know, it could still break down in a lot of phases of the system, but it’s really a very helpful way to think about things. When we got recruited to Polsinelli, I real-ized that I had worked with so many peo-ple who were in that firm when they had been in different firms. And it was very much that outgrowth of, Who have you enjoyed working with? Maybe you were opposite them, and you just found them to be extraordinary lawyers, and you said, That’s one I want on my side. And so that has been an effective way to at least start the process. •

CRAIG FLEISHMAN SAID COMMUNICATION WITH CLIENTS IS KEY.PHOTO: LAW WEEK, HANNAH BLATTER

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