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Law firms are businesses, too
February 25, 2013 @ 10:29am | Rodika Tollefson
A law firm is the last thing that comes to mind when someone thinks about entrepreneurship and small businesses. Yet, like any other small-business owners, lawyers have a company to run — with many of the same challenges other entrepreneurs face. And like many other industries, the legal professional is seeing a shift toward downsizing and consolidation.
The Kitsap Peninsula Business Journal met with two of Kitsap’s prominent attorneys, Ron Templeton and Ed Wolfe, to talk about the business side of law.
Templeton, whose solo firm is based in Old Town Silverdale, focuses on real estate and development, business and wills/estate issues. He has been practicing since 1978 and has owned his own firm for most of his career (working with a partner for a long time). He has been general counsel for Kitsap Transit for 13 years and for Kitsap County Consolidated Housing Authority for five years. A long-time Rotarian, he is an active supporter of several organizations including the Boy Scouts.
Wolfe’s solo law office is based in downtown Bremerton but he also has an office in Silverdale, and for many years maintained one in Seattle. He focuses on litigation, including personal injuries, real estate and business disputes and employment discrimination. He launched his practice in 1997 after serving as deputy assistant secretary of state (with rank of ambassador) in Washington, D.C., and then as a corporate attorney. Wolfe also owns and manages several properties with his wife under separate LLCs. He has been active with many organizations, ranging from Rotary and Bremerton Chamber of Commerce to Olympic College Foundation.
KPBJ: What attracted you to the legal profession?
Templeton: I came of age politically during the Vietnam era and was galvanized to do something to change what I saw as the evils of the system — as a lot of young people were. I saw it as a way to make change from inside… But the reality of coming back from law school set in — in a small town like this, you’re not in a position to make systemic changes to society; that would have required a government job.
Wolfe: Perry Mason. I watched the show on TV when I was 7 or 8 and I liked the courtroom stuff. He won every case and I said, that’s what I wanted do to, be a lawyer, even though I wasn’t a good student by any stretch of the imagination — so I had to work hard.
KPBJ: Why did you decide to open your own firm?
Templeton: At the time I was representing Ed Bremer and one of my assignments was to track rumors about land for a mall in Silverdale. That seemed like the place to be — I wanted to make my practice in real estate and I wanted to move to Silverdale (from Bremerton).
KPBJ: Is a law firm different from running any other small business?
Templeton: I think most lawyers are bad business people. We want to do the work but hate the details of keeping track of billing and people paying us. Then you wind up doing a lot of free work. Some lawyers are better at keeping track than others.
Wolfe: I am constantly doing a development plan — how I want my practice to change because of the reset in the economy. I constantly have to develop and reset where the firm is going, and I did that from day one, constantly watching my profit and loss. I review it every month and I look for places to cut. I’ve been doing that from the beginning — it’s always about the overhead. I’ve got the equation down now: I want to retain my staff, I want my staff to be trained and I want them to be energized and grow with my firm.
KPBJ: What makes this profession or business unique?
Wolfe: A lot of things make it unique. One is the constant deadlines. A lawyer cannot miss deadlines and by that I mean the statute of limitations. I wake up at night thinking about the calendar. It’s always on my mind. Another aspect is that clients are rarely 100 percent happy because you rarely get a full loaf from the courts.
KPBJ: Do you have an advantage due to your legal background?
Templeton: I don’t follow my own advice. I’m like the cobbler without shoes. My wife and I, for example, went for 30 years without a will. I get so wrapped up in what I’m doing that I take on more than I should.
KPBJ: Was it challenging to get started as a business?
Wolfe: I just thought of it as being glamorous because lawyers had a good reputation in those days. In law school, they never taught you to be a businessman. Because I’ve been in business so long and had 50 people working for me (in DC) and managed budgets, I had an advantage. I was corporate counsel for a multimillion-dollar company but I didn’t run the business. When I started, I didn’t know what I was doing. I’d never been a litigator so I took a course from the state bar association. I read books on how to start a law practice. I took out a lot of credit but I’m proud that I’ve never used it.
KPBJ: What are all the hats you wear as a business owner?
Templeton: You have to supervise employees. You have to watch the overhead. For example, all the (legal) books I keep require maintenance (it costs $12,000 to update them), but I need to have them because I like having several books open in front of me.
Wolfe: I had to learn IT, human resources, how to hire the right people and most importantly, how to market. I’m very good at marketing because I’m out in the community almost as much as I’m practicing.
KPBJ: What are some of your biggest challenges?
Templeton: Forcing myself to keep track of my time on a daily basis. On the other hand, you’re constantly under pressure to pump up work. People are so used to the drive-through mentality, and they see complex cases being solved in an hour on TV.
KPBJ: What’s the advantage of having a solo firm versus a large one?
Templeton: In the big firms, they have tremendous overhead so there’s immense pressure on young associates to bill a lot of hours. Most of us have a difficult time billing for more than five to six hours a day. I look at what they do in the big firms and I can’t imagine how they put in all those hours. But the advantage of a big firm is getting more interesting cases — they have big staff and resources to devote very quickly. And if you stick with it long enough to make partner, you can make a lot more money.
KPBJ: What do you like about being a lawyer in a small town?
Wolfe: I love saying I’m a country lawyer. The camaraderie of the bar is much different here than in Seattle. We have a very competent bench. I feel comfortable going to the courthouse with fellow attorneys and the judges, and our court clerks are very friendly. I’m very proud of being a small-town lawyer.
KPBJ: What has been the biggest surprise from the perspective of a small-business owner?
Templeton: The attention you have to give to business and overhead. Up until 2008-2009 I built it up not to have those problems, but with the economy collapsing and a lot of my clients being builders, it impacted my practice. But I can still be selective. If I don’t like the story or what they’ve done, I don’t have to take the case.
Wolfe: One of the surprises was that lawyers aren’t taught to run a business. Another surprise was managing an office — I don’t want to manage people but I have to. I wasn’t prepared for it.
KPBJ: What do you think it takes to start a firm now?
Wolfe: It’s so competitive today, it’s much harder. The jobs for new lawyers just aren’t there. The law is changing, the way we bill our clients. Clients are much more savvy too. It has reset the law, just like other industries.
KPBJ: What has been the best part about being a lawyer?
Templeton: I enjoy my work and have no plans of retiring. I’m fortunate because I can pick and choose what I do and I’m not afraid to jump into new practice areas, and people come to me with very complicated transactions — so I lock myself up in my office on weekends to do research. I like the freedom of being my own boss. I don’t like being told what cases I’ll take or not take, or asking anyone when I can take vacation.
Wolfe: The most satisfying part is helping people with the next step in their lives. I get thank-you letters and I keep them all. One of the best things is to win in court with a jury. That’s No. 1 for me. The other is the flexibility I have with the job to go out and do things in the community.
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