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August 13, 2003
She's the Boss
While rare, the number of women
investing time and resources into creating new law firms is increasing.
Kelly Lucas E-mail:
klucas@ibj.com
Barriers are relative things.
Consider for a moment the barriers faced by
Myra Bradwell. In 1869, Bradwell passed the admission test for the Chicago
Bar, but was denied admission by the Illinois Supreme Court because she
was married.
Inconceivable by today's standards, the U.S.
Supreme Court upheld the Illinois decision, stating, The natural and
proper timidity and delicacy which belongs to the female sex evidently
unfits it for many occupations of civil life The high court went on to
instruct Bradwell that her destiny and mission in life, as for any woman,
was to be a wife and mother.
When the court recognized that not all women
are timid and that both genders must struggle to strike a balance between
professional and family life is unclear. The Illinois Supreme Court
reversed its decision in 1885, directing the bar association to grant
Bradwell a license to practice law. She later established The Chicago
Legal News.
The barriers faced by women in the legal
profession in 2003 are subtler than those imposed on Bradwell. While
recent reports indicate that the entire of women into the practice isn't
impeded the way it once was enrollment of female law students rivals men
and the numbers of women practicing law in the 21st century continues to
climb women-run law firms continue to be a rarity.
According to the Center for Women's Business
Research, 5.7 percent of adult women in the United States own and run a
business. In Indiana, 5.3 percent of women are entrepreneurs, ranking the
state 37th nationwide.
Some say it isn't surprising that law firms
led exclusively by women in Indiana are few and far between. While women
have risen to the rank of managing partner in a couple of well-known
Indiana law firms, the states big three have never put a female lawyer in
the proverbial corner office.
The small firm legal market is, however,
changing.
Leading the way
 Attorney
Martha Starkey launched the Starkey Law Group PC in November 2000. Mother
and daughter lawyers Ann and Kathleen DeLaney formed DeLaney & DeLaney LLC
in January 2002. They are among a group of Indiana women leading small,
but growing, legal teams.
The backgrounds of these women are as varied
as their legal expertise. The common denominator something each had before
opening her current practice is professional experience.
In going from a big to a small firm you are
going to have to give potential clients some sense of comfort that you
know what you are doing, that they are taking a good risk if they hire you
as an attorney, Kathleen said. If you already have an established track
record it is much easier to develop clients in your new firm.
Building a client base and establishing
professional contacts helps breed the lifeblood of many small firms
referrals. A lawyers most likely source of referral, Ann said, are the
lawyers she has dealt with over the years.
When conflicted out of work, large firms often
call on small firm practitioners they know and respect. Referring
litigation to a small firm lawyer is seen as safe, Ann explained.
Referring to a larger firm carries the threat of increased competition for
the clients future business.
Lawyer Wendy Ponader left Baker & Daniels six
months ago to start Ponader & Associates LLP. She made the change, she
said, to gain more control over her workload and schedule flexibility.
She's been able to make it work, she adds, because of referrals that 15
years of professional experience and relationships have helped to
facilitate.
Conflicts of interest in a business insolvency
and commercial transactions practice, Ponaders professional niche, are
somewhat common. When conflict occurs, the firm must refer out. Her
relationship with Baker & Daniels partners and their familiarity with her
work in that area of law can tip the scales in her favor, she believes,
when the firm makes referrals.
Nearly 80 percent of DeLaney & DeLaneys client
work is the result of referrals, the partners report. Positional conflicts
within larger law firms that do primarily management work account for the
majority those.
We do a lot of representation of executives
when their contracts are being negotiated or terminated, Kathleen
explained. Those people are used to working with big law firms but when
they call the big firm looking for someone to represent them individually
versus the business, the firm isn't going to touch it. The firm does want
the person to get good representation, however, so it takes an interest in
helping the client get a good lawyer.
Marketing yourself through your work prior to
starting a new firm and once it is established can make or break a lawyers
probability of future referrals. Joining bar association committees,
volunteering time with legal organizations, and writing for legal
publications create exposure. A marketing concept, Ann adds, can be as
simple as conducting yourself in a way that leaves opposing counsel in a
case still friendly toward you and respectful of your ability so that when
a conflict occurs, he is comfortable referring you.
The business of law
Laying the groundwork for future referral work
it vital. A second component the business side of running a practice is
harder for many lawyers to anticipate. Many lawyers who have started their
own law firm concede that, once in motion, they are shocked by the amount
of time and money it takes to keep a firm going.
Starkey began her legal career in a rather
untraditional setting. While she practiced with a group of approximately
25 lawyers/shareholders, she was responsible for her own bottom-line.
We were able to keep a portion of what we
brought in and turned over part to contribute to the overhead, Starkey
said. No one stepped in to pay my part of the expenses if I wasn't having
a profitable month. As an associate, this taught me how to run a case
profitably.
Starkey grew up in an entrepreneurial family
and said she enjoys the business side of running the practice. However,
she made the decision to hire a chief operating officer to take care of
business, freeing her to practice law.
While she has been building her client base
and keeping tabs on the financial aspects of her practice for over 20
years, Starkey said she has been nonetheless surprised over the past 2 1/2
years by the phenomenal amount of money running a firm requires. While a
practice can ebb and flow, payroll for nine people comes around every two
weeks, ready or not, and the reality of that is something that can be
shocking. The key, she said, is perseverance.
I analogize it sometimes to a time when I took
a water safety instructor course and the guy giving the test, the one I
had to rescue, was two and one-half times my size, Starkey recalled. He
took me under water and thrashed around until I thought I would drown. I
remember thinking, Do not let go or give up. Stay focused on what is
important as you work your way up.
Controlling costs can be challenging. When
planning for their practice, Ann and Kathleen DeLaney found it important
to take the time to meet with a number of consultants and other attorneys
to discover what worked for them in terms of technology, billing software,
and other vital law firm tools.
If you choose to outsource, Ann explained, you
have to know enough about the services you are buying to know what you
ought to be paying for them. It is important, Kathleen added, to recognize
the limits of your expertise and call on others to fill in the gaps. They
found that most lawyers who had been there, done that were willing to help
them out.
For example, Ann and Kathleen talked with a
technology consultant who wanted to develop and maintain a Web site for $
12,000. Through contacts, the lawyers were able to have a site developed
for $ 300, and they now have a person on-staff who can maintain it. The
women feel it was a wise business decision.
When contracting for technology support a key
consideration for today's large and small law firms Ponader felt it was
critical to hire a consultant who had experience working with law firms.
After 17 years, I understood the economics of
a law practice, for example, the challenges for billing time and that
certain matters ought to be billed monthly while others should be billed
at the completion of a task, Ponader said.
But like many, she did not feel proficient
with the latest technology and said she knew she would have to learn a
whole host of new skills. She needed someone well-versed in document
retention and retrieval, billing, and other functions incorporated in
law-firm setup.
Getting started
Many resources exist to help women interested
in starting a business. Bar associations often offer continuing legal
education courses and seminars on small-firm startup.
In 2001, the National Association of Minority
and Women Owned Law Firms (NAMWOLF) was created to promote greater use of
minority and women-owned law firms by corporations and governmental
entities.
Based in Milwaukee, Wis., NAMWOLF provides
guidance to lawyers interested in becoming certified for government
contracts. While many major corporations have diversity goals on the
books, those goals don't often include professional services, explained
NAMWOLF spokesperson Marieke Westerman. The organization is working to
change that by building awareness.
Nationwide, the U.S. Small Business
Administration (SBA) reported that guaranteed loans to women increased
from $ 408.5 million in 1991 to $ 1.74 billion in 2000. While banks
typically want to see that an entrepreneur is putting up some of her own
money, many sources of financial assistance for women are available.
Credit is an important consideration for any
new business law firms included. Even if you don't think you need it,
financial backup is important to have available, lawyers say, as a sound
business practice. The best advice establish a relationship with a private
banker or other financial services person so that when the time comes, you
are dealing with someone who knows you, your history, and your
capabilities.
Women's impact
Most women agree that moving more women into
leadership roles will advance the status of women in the legal profession.
The jury remains out as to whether it will impact the law firm culture,
especially for those who venture out in search of greater work/family
balance.
A 2000 survey of 1,000 law firms by the
National Association for Law Placement revealed that while 94.5 percent of
the attorneys at those firms have part-time options available to them,
only 3.2 percent use them. Most on the path to partnership say they
believe they will inevitably be sidetracked if they reduce their hours.
Ponader, a partner at Baker & Daniels who has
taken advantage of that firms flexible scheduling options, said her
decision to start her own firm was based on a desire to spend more time
with her two middle-school age children. It was a trade-off. There is a
huge ego component to having achieved partner at a firm like Baker &
Daniels, she concedes, that made the decision difficult.
You make bargains with yourself as a working
parent, Ponader said. I became increasingly aware of how soon my house
would be empty. I gradually became aware that I was running out of time on
the back end to keep up with all the promises Id made to myself.
Ponader said that pressures within a law firm
often limit concessions that can be made. While women in leadership may
trigger more work environmental changes, she said she sees the dynamics
and economics of practicing law as gender neutral.
What is important to her today is that there
are viable choices.
Each of us for our own benefit recognize there
are times when our objective and needs change, Ponader said. We just have
to be prepared to make whatever changes are required to make them work.
Copyright 2003 IBJ Corporation
The Indiana Lawyer
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