Scott Limmer

This week we welcome Stephen Furnari of lawfirmsuites.comStephen Furnari is a self-employed corporate attorney and the founder of Law Firm Suites. Law Firm Suites is a professionally managed shared law office space for solo attorneys and small law firms based in New York City. Through Law Firm Suites, Stephen has helped dozens of attorneys launch and grow successful law practices. He is the author of several eBooks, including “7 Deadly Mistakes that Prevent Law Practice Success” and “An Insider’s Guide to Renting the Perfect Law Office”. Stephen has been featured in the ABA Journal,EntrepreneurNew York Daily News and Crain’s New York. He can be connected with on Twitter (@stephenfurnari) or Google+.

Stephen explained that his business model is not merely the rental of or sub-rental of office space to lawyers. Plenty of lawyers rent out part of their suites to other lawyers. His business requires tenants to agree to a collegiate atmosphere that encourages cross-referrals. The model is to form a cooperative environment where lawyers form different practice groups can work together, share costs and refer each other business outside their own practice areas.

The hosts discuss with Stephen how his business model fits perfectly into the Reboot philosophy that the best way to develop a self-sustaining, fulfilling practice is through networking and creating a reliable referral program. The podcast discusses the details of Stephen’s company and how young or struggling lawyers can benefit form participating in a positive, collaborative environment.

Stephen has set up a special offer for our listeners. Go to www.lawfirmsuites.com/lawreboot to get a free copy of his guide: The Ultimate Guide to Maximizing Referrals in a Shared Law Office Space


Episode transcript

INTRO:                      Welcome to Reboot Your Law Practice, two lawyers, a podcast, and a plan to help any solo or small firm, hosted by Scott Limmer and Oscar Michelen.

OSCAR:                      Hello everybody, this is Oscar Michelen.

SCOTT:                      Hi everybody. This is Scott Limmer. Welcome back to this week’s episode of Reboot Your Law Practice. This week, we’re happy to have with us Stephen Furnari from Law Firm Suites. How are you doing today, Stephen?

STEPHEN:                 Doing great, guys, thanks for having me.

OSCAR:                      Thanks for joining us. We really appreciate it.

SCOTT:                      Stephen, tell us a little bit about yourself.

STEPHEN:                 I’m a practicing corporate attorney and I’ve been practicing for about 15 years. Like a lot of us back in 2001, 2002, I had lost a second job in six months. I was an associate at a big firm and after the end of dot-com 1.0 that crashed there and then 9/11 in New York, we had certainly a little bit of a recession, certainly a business slow down. I was the corporate transaction person and so I decided at that point that I was going to start my own law practice and I was very much inspired by some of the partners, junior partners and higher level associates who had lifestyles that were built around this nice salary but didn’t have a book of business mostly because they are very busy servicing the firm’s clients and then were very exposed with a down economy.

Knowing that the area where I practice is very subject to business cycles, I said, “I really need to work on developing a practice” and I decided at that point that I didn’t want to put my financial future and professional development in the hands of a big partnership. I said, “Listen, I’m going to give solo practice a try and hopefully what I can do is I’d build a book of business and it either works but I figured once I built this book of business that doors would be open to me. I could go back to a firm if I wanted to or stay a self-employed lawyer, but I’d at least have the ability to always find clients.

As it turns out, I never looked back. I’ve been self employed since and throughout my journey as a self employed lawyer in New York City, one of the most challenging things was to find affordable space to work as my firm grew from being a solo practice and I took on a partner and I needed to hire staff. As you guys know, I know in a recent podcast, I had heard that each of you had made hires recently that is not just the salary that you need to take into consideration but it’s also where are those people going to sit.

I needed to expand my space and I needed to do it in a cost effective way. I ended up in a sublet share with some other lawyers that I knew and I went from working in a desk space with a technical recruiting firm to basically tripling my monthly expense just on real estate plus the cost of the labor. For me, I really needed to get that space to work for me and it was an attorney, we were exchanging some referrals anyway so I said to this attorney and the other people in the space, “Look, for me to really make this commitment, I got to know that what we’re doing now is going to get much bigger because it’s going to play a really big role in me being able to afford, not so much to be able to afford it but to stomach the risk of taking on that extra space.”

Sure enough, when I went from working in my own space with no lawyers to working in a space with other lawyers, I doubled my revenue in the scope of a year. That space which was materially larger expense for me actually became a profit center. I did this for a couple of years and my practice actually expanded beyond what was available on that space so I took on my own lease and I said, “Hey, if I can do this much volume in business with four other lawyers, what would happen if I put 10 other lawyers in my office?”   I took on quite a bit more space than what I needed myself and the idea was I was going to fill those spaces with lawyers with complementary practice areas. I’d do corporate transactional work but I need trust and estates lawyers, tax lawyers, and IP lawyers to help service my clientele. When I took on that space, I said what I need to do here because I’m very busy practicing and I don’t want to go through the hassle of having to constantly show off the space to other lawyers, I just threw in a brainstorming, what can I do to keep those lawyers in my sublet space to really disincentivize them from leaving mostly out of pure laziness because I didn’t want to have to deal with doing tours and the advertising.

I said, “Well, if I can produce the same results for them that I have been able to do for myself, it would be very difficult for them to move.” Instead of doing your typical lawyer sublet share space, I actually branded it. I made a little website and created a system to help generate referrals between the lawyers and that was the beginning of Law Firm Suites. That was back in 2006.

OSCAR:                      That’s great. You said a lot. I want to go back a little bit to and we obviously want to get into the details of the business model that speaks to a lot of what Scott and I have been talking about over our last several podcasts but getting back to the first thing you said about we deal with a lot of lawyers who leave big law and have problems starting their own practice because one of the problems with going into a large law firm especially by New York standards, a New York large law firm is where are you going to find the kind of clients that are going to be interesting to them? You are going to Chase and start bringing in JPMorgan Chase’s work. No.

It’s hard to develop business at big law and a lot of times, these lawyers who end up finding themselves out of those positions, they didn’t learn it in law school and they didn’t learn it at their law firm the first few years of how to develop business. Was that a little bit of a concern for you when you went out there that that was not something that you ever had to do as part of the track you’re on at your initial first two jobs?

STEPHEN:                 My story is maybe a little bit different from that typical professional experience. I didn’t start my career out in big law. I actually started out in a boutique law firm, a very entrepreneurial boutique law firm and I was very lucky because I watched a couple of lawyers who were also ex-big law develop a really substantial practice from scratch. I was very lucky to sit in an office next door to their biggest rainmaker. At that time, it was an annoyance to me. I remember because I overheard every phone conversation but I overheard every single phone conversation and you couldn’t imagine how helpful that was later on down the road in terms of learning how to talk to clients, how to close deals, and how to talk to leads. It was an invaluable experience.

Since it was such an entrepreneurial place, they encouraged me to leverage their own clients into my clients. In other words in situations where you’re representing a company and somebody leaves and goes to another place and they want to keep working, they would allow you to retain that second client. They were generous that way and as a result, they grew from a four-man shop to a 60-lawyer firm. They are one of the biggest securities boutique in the country.

OSCAR:                      That is its own message, by the way, leading into our how to grow a practice the right way.

STEPHEN:                 Yeah, they really encouraged their associates to be entrepreneurial and they were generous that way. They were never greedy about, “Hey, you’re just leveraging clients off of my back.” They are very generous that way. From a very early point in my career, I already had been retaining clients and when I left that firm during that dot-com hay day and leverage that into a big law job, it was a big-ish law job. It was 200-lawyer regional firm that was eventually absorbed into two firms later fill in before they went out of business. I kind of had that in my blood already. I felt that I could either figure out how to do it on my own because I had been doing it already.

The flipside of that is at Law Firm Suites, I’ve helped dozens of lawyers start practices and a fair number of them are big firm refugees. You name any big law shop, name brand big law shop and we’ve had people come through our offices from those places – Scott, K&L Gates, Wilson Sonsini, [inaudible 10:10]. I think it’s easier today than it was when I did it 15, 16 years ago just because there’s so much information out there for free online that wasn’t there before. You have to really seek it out and hire coaches. I did all of those things for myself but in terms of these other lawyers, I think there’s a certain kind of person that’s drawn to solo practice and usually, if they are confident enough to make the leap into solo practice, then they figure out a way to do it.

Based off of our statistics and I’ve run the numbers, seven out of 10 of those lawyers are usually cash flow positive within the first year. Two out of 10 are usually break even or cash flow positive by the second year and then usually about one out of 10, they end up doing something else. I wouldn’t say they completely fail but maybe they go in a partnership with somebody else or they accept a position that they have been looking for. They make some sort of a career change.

OSCAR:                      Well, the solo life is not for everybody or the small firm practice is not for everybody and you have to have a little bit of that entrepreneurial spirit and that willingness to take a chance like you were talking about, but at the same time to get back to what you’re doing now, a lot of the credit there for them able to build a successful practice is because you put them into what essentially sounds like a referral generator like an incubator for cross referrals. They weren’t just going into an office space. They were specifically put into a place that was going to allow them to get clients and share clients with other lawyers that were there, right? I think your business model probably contributed a lot to them being able to develop practices.

STEPHEN:                 I’d certainly like to think so and we definitely tell people that through our sales process, but now…

OSCAR:                      You have to pay me for that ad. It makes sense though that this is not just a place to park your chair, it’s a collective intending to try to help grow each other’s practice.

SCOTT:                      You know Stephen, I’m sorry to interrupt you but we talk about stuff like this all the time. You’re in a space, you have an office, why not use it to its fullest extent? Why not make sure that your space is working for you? I remember reading, not to give you another advertisement, but I remember reading about you on your website, I was like, “This is exactly what we’re talking about.” This is a synergy that’s forming between that you are able to form when you started your practice and that you’re trying to work into your business model now.

STEPHEN:                 Yeah, that’s definitely it. I think the bottom line is solo or small firm practice is a very, very difficult way to earn a living. While it can be lucrative compared to the possibility of other jobs out there, it’s hard because we need to go out and find clients and then once we find the clients, you have to come back and do the work. You can never stop looking for clients and that constant, it’s called the three-headed monster of small firm practice, it’s balancing the marketing side of the business with the work production side of the business with the admin side of the business, and there’s a constant battle between the three heads of the monster.

OSCAR:                      Yup – finding it, minding it, and grinding it.

SCOTT:                      That’s right. That’s exactly it and if you let one slip, your pipeline dries or if on the admin side, you’re not making proper filings and you can have problems with your license or with government agencies. It’s a very tricky way to earn a living and so what I found is that by using my office space, I could actually get my suite mates to do my marketing for me when I didn’t have time to do it myself. In other words, I was never not marketing. It was sort of this automated system because I would always set this context that if I’m out doing my marketing or networking, not only am I looking for me, I am looking for you but I expect the same thing from you. So when you’re out doing your marketing, you’re also looking for me. It takes very little extra work, right, but when you set that context in any office space, it becomes very, very productive and very lucrative.

OSCAR:                      I really appreciate you say that because in some sense now, you’re affirming what Scott and I have been talking about. We spent a lot of podcasts over the last few weeks and even months talking about networking. People hate that word, they hate the association with it but honestly, it’s the way to generate business. What we’ve always talked about is when you go to these network meetings, it’s not all about what can you get out of it. The best way to get a good referral partner and a networking partner is to make sure you’re giving value back to them and that’s the surest way to keep business falling in your direction. You have to make sure it’s a two-way street.

Once folks are coming into your suites with that model in mind, they are going to have to understand that. “Hey, I’m not out there pounding the pavement just for myself. I’m pounding it for you with the understanding that you’re going to be doing the same when you hear clients who need the kind of work that you and your firm provide. That’s exactly the things we’ve been talking about when it comes to networking. It has got to be two ways.

STEPHEN:                 That’s right and whether you’re doing the networking at a bar event or you’re doing it in your own office, the basic principles are the same. If you want to derive business from networking, the best way to get business from networking is to give before you get. I mean the sure fire way of building a practice is to try to find work for other people and in some ways, it’s almost easier because you can have a very wide network of people and if you’re practicing in a niche, you may not find things on a regular basis for you but you may be able to push things out to your colleagues. To me, it has always been money in the bank. I love it when I can send a referral out because I know eventually one way or the other, either directly from that person or the universe will provide a referral back in my direction and usually, times two. I’ve always been a big believer of that.

OSCAR:                      Do you specifically look for a practice type when an opening opens up in a suite or do you think any practice type fits into the model?

SCOTT:                      Yeah, that’s a great question. Really any practice type fits into the model. I think it’s more about the type of person and I think we’re looking for a certain kind of person to rent from us. I’m not running one of these executive office suite places.

OSCAR:                      Like Ridges.

STEPHEN:                 Like Ridges or Jay Suites where you go into your office, you close your door, and you’re not seen from until you leave for the day. That’s not the type of environment that I’m looking for. We take a lot of pains to make sure that our marketing message when we put it out there is very clear that you’re a person who is open minded to giving and receiving referrals. You’d be surprised. There are a lot of lawyers out there who have a full book of business and it keeps them pretty busy and they are not so interested in giving or receiving referrals.

OSCAR:                      They just want the space at the right price and leave me the hell alone.

STEPHEN:                 Right and those types of people can be valuable as well because there’s more value to our space than just the referrals. There’s also mentoring or being open to having conversations with other practitioners and helping then with their practice. Law is a business that works better when you’re practicing with other practitioners. It’s very difficult to do on your own. Even if, say, they have a full book of business, I’m not out there networking and probably I’m not asking for anything, I’m not going to give anything, but if they are willing to participate in the community, that’s as valuable as the referrals as well. We’re looking for that kind of person as well.

SCOTT:                      I look at a space like this almost like an incubator space where all different people come together and they can throw ideas out at each other and get feedback right there. What you say is true. When you’re in private practice, when you have a solo practice, you don’t get the feedback of other people you work with. I think it could really be a nice environment for someone to work in.

STEPHEN:                 It is. I’m a little bit of an odd ball because I started my practice out of my home and then I moved my office to desk space with non-lawyers. I have an office that’s my own office with nobody else and then I’ve done a smaller shared space which I talked about before, just a lawyer sublet space for a bunch of us on the lease. I’ve been in this space, the Law Firm Suite space, where my practice is located where there are 100 law firms. I’ve seen basically every iteration of how you can house a practice and far and wide, I enjoyed being in this space with a lot of other lawyers and it has been valuable even to my own practice.

OSCAR:                      It makes the practice enjoyable. You forget that especially if you’re driven enough to be a solo, if your field of law interests you, you have a passion for it, you want to get work in it, and it adds to, I think, the quality of life as a practice when you have other people around and you could talk about it. You’re not just sitting there by yourself or even in your home office trying to get work done. I think it also makes you, in a lot of ways, more productive because you feel like you’re part of a collaborative effort here and that the work you’re putting out is going to be seen by other people who will refer you clients. I think it also kind of builds on itself on a large part

STEPHEN:                 Yeah, a big component of our environment and our community is social. We run events where we take our clients out and we have a system built around this. Me and my staff, we work very hard at cultivating community and making sure that we have a good community vibe. There’s definitely a social component to our community what we do and what clients do on their own. You see clients developing relationships and friendships, and going off and doing their own things after work and extracurricular activities. It’s wonderful to see when that takes shape on its own without our involvement. That’s all we can ask for and we tell our clients all the time, it’s not Stephen’s community, it’s not Law Firm Suites community, it is your community, and the more that our clients take ownership of the community that the more robust and productive the community is.

You guys also touched on another point which was interesting. Obviously, referrals is one by product of sharing space with other lawyers but maybe an area that becomes more lucrative for clients is something that we actually call internally among our staff, the “x factor.” By nature, I think attorneys are very competitive people. When you come into a space like ours and you see a lawyer who has got an office three times the size of yours and clearly has a much bigger practice than you, you sit alongside that person every single day, you kind of rise to the level of the people around you and since we have a lot of successful lawyers in our office, we find that lawyers really elevate the level of practice.

The way I notice is because I see those guys coming in from big law starting from zero in work stations and they have progressed their practice time after time much faster than what I was able to do in my home office and then the rented desk space with no other lawyers around. I attribute that to what we call this “x factor” and we see it not only with startups but even a guy that has been in business 20, 30 years. They come into our space and they will see a 20-40% increase in business in the first year.

OSCAR:                      Because that guy also has been relying on his steady book of business and when the business downturn comes in, maybe it’s not there, he also has never had to go out there. One of the things we talked about when I was rebooting our own law practices is I used to do exclusively criminal defense. I don’t do it that much anymore. The bottom dropped out of it in New York in the 90s here and I had never had to look for business. I was turning away business. If people didn’t sign the retainer within the first 15 minutes, I was saying, “Look, could you move out the door? Let the next guy come in.” It took me a long time to have to even figure out how to start generating income especially new fields of law that I have to develop. It would have been great for me to have landed into a suite like that where I could have had some ready not only referral partners but also examples of how to operate a solo practice, what are they doing. You are going to hear conversations, you’re going to see what people are doing. You learn by osmosis.

STEPHEN:                 Yeah, there’s a lot of modeling that goes on in our office and I think our clients don’t even realize that it happens but it does. It happens naturally.

OSCAR:                      Yeah, exactly.

SCOTT:                      Stephen, you were telling us a little bit about before we got on the air that you’re looking to work with law schools in some sort of incubator project. Could you tell us a little bit about that?

OSCAR:                      Sure. We’re in discussion with two law schools actually in the New York City area and we’ve reached out to them because we recognize that there’s still jobs issue with young graduates and we’ve had some success with lawyers who started practicing in our own office space right out of law school. For those lawyers, we’ve helped them along and we pay special attention to them because we want them to be successful. It has been remarkable how successful some of them have been. In fact, we have one lawyer who writes guest blog series for us that is pretty well known in New York and her practice has done better than a lot of lawyers with 10, 15 years experience under their belt starting practices.

I don’t see any reason why that couldn’t be a viable career option. We’ve been talking to schools about using our community as the modeling piece and we would help on our end and link these young lawyers up with onsite mentors and put them in a program where they can receive overflow work or per diem work. They would also partner up with professors and clinics on the law school side where they would receive help and resources so they could get through that first year. I think if you could build the skills in the first year and get some income coming in…

OSCAR:                      Right, get some confidence.

STEPHEN:                 Yeah. I see it over and over. It doesn’t take much to make considerably more than what you would have paid on a salary basis as a first year associate.

OSCAR:                      Right. The other thing also is that going into your type of situation gives them a little bit of a safety net in the sense that I’m not really completely out of here on my own working out of my home. I have a structure, clients will come in. They are going to see a suite of lawyers. They are going to be in a conference room. I’m going to be able to have a little bit of a display of professionalism and it boosts their confidence and their ability to get clients as well.

STEPHEN:                 Yeah I’d agree with that and I think the modeling component, I think the biggest component is to watch other experienced lawyers what they do, how they interact with their clients, how they behave, how they handle phone calls, and just be around that everyday day in and day out. It just accelerates the learning curve so much. Look, I’m a person who sells lawyers virtual office rentals. You can pay a small monthly fee and get use of my office suite address and we’ll do email forwarding right over your phones. You can leave a number of different packages and they are great for me financially. They are wonderful and there’s a certain contingent of a way out there that that’s good for.

OSCAR:                      That’s what they want, right?

STEPHEN:                 Right, but I still believe as a practitioner that if you are starting a practice and you don’t have 100% confidence in your skills to run a practice or develop a business that you are making a very, very big mistake by using a virtual office. I know it’s all about the finances because the virtual office is $100/month. Probably the cheapest thing that we have is over 5 but it’s such a good investment in your practice. It’s incredible. It’s going to accelerate the learning curve so much which is why actually me and staff, we’ve been tinkering around with the idea of getting lawyers. We’ve put together this package of, it’s permanent desk space that includes some conference room hours in our Midtown location and we’re pricing them at about $450/month, which is for a New York lawyer is not much more than an hour of billable time, right?

OSCAR:                      Exactly.

SCOTT:                      Stephen, I’d say this that when I started my own practice, I came out of the DA office, I got some space in another guy’s office and sat in the back of the office and did my work without any real interaction with hardly anybody else. I would have loved the opportunity to move into a space like this and meet other people who are excited about their practices and who want to succeed. I think it’s really just a great idea.

OSCAR:                      And we wish you a lot of luck with the law schools as well because I think still with the current climate, the real focus of our podcast is that you need to be creative, you need to be entrepreneurial, you need to get out there to succeed as a solo or small firm practice here. Your method and the Law Firm Suites is, I think, a very innovative different way for someone to get started and that’s why we really wanted to have you in the program to explain that.

SCOTT:                      Where could people reach you, Stephen? Where could they find you?

STEPHEN:                 Our website is LawFirmSuites.com. What I put together for you guys actually for your listeners, I put together an e-book that describes basically how we run our system and it’s basically how you can get any law office with multiple solos to produce referrals, and so we call it the Ultimate Guide to Maximizing Referrals in Shared Law Office Space. It’s basically how do you get your space to produce revenue for you. If people go to LawFirmSuites.com/LawReboot, they will be able to download that for free.

OSCAR:                      That’s great.

STEPHEN:                 It’s a great package. I’ve got two offices in New York and we’re looking to expand but there are lawyers all over the country that could take their shared space and make it profitable for them. I did it with four other lawyers. It’s very accomplishable.

OSCAR:                      That’s great. That’s great information and we look forward to seeing that. We encourage all our listeners to check that out. Once again Stephen, thanks for coming on to the program.

STEPHEN:                 Thanks for having me.

SCOTT:                      Thanks, Stephen, bye.

OUTRO:                     This has been Reboot Your Law Practice with Oscar Michelen and Scott Limmer.

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