Lawyers discover risk, reward in branching out on their own
Judy Sarles, Nashville Business Journal
6/14 - 6/20 2002
Attorneys William Farmer and J.W. Luna were not unique when they decided to leave a much larger law firm and form their own smaller one. Nor were they unique in stating that an entrepreneurial drive and a desire to get closer to clients were motivators in their decision.
"By their nature, all large institutions have to have a fairly huge bureaucracy," says Farmer. "We can get a firm partnership meeting together in two minutes and make decisions in about five minutes. When you have 200 lawyers, it's obviously not as easy as that."
Farmer and Luna opened their new firm at the first of the year after working as members of Waller Lansden Dortch & Davis, where Farmer was employed for 11 years and which Luna joined in 1995. They felt at their age they are both in their early 50s that if they were ever going to form their own firm, the time was now.
The two say their compatibility was a determining factor in opening a firm together. Before he joined Waller Lansden, Luna, who held three cabinet-level positions in the administration of former Gov. Ned McWherter, was told by Mayor Bill Purcell, one of his advisers at the time, that Farmer would be his best friend within one week. Purcell, who was once a partner with Farmer in the firm Farmer Berry & Purcell, turned out to be right. Farmer and Luna say they share a strong belief in community and public service, an interest in governmental relations and a dedication to family.
It was not a snap decision for them to leave Nashville's largest law firm, where both say they were happy and treated well, to branch out on their own. Attorneys Mike Pearigen and Paula Flowers, who also formerly worked at Waller Lansden, came on board as partners at Farmer & Luna.
"The relationship between Farmer & Luna and Waller Lansden is amicable," says Ames Davis, Waller Lansden's chairman. "We enjoyed working with them, and they have our best wishes for the success of their firm. They are good lawyers and remain good friends."
Attorneys who leave large practices for smaller firms say it is easier to avoid the conflicts of interest that can happen in bigger firms, such as when an attorney has a relationship with a client on the other side in a legal matter. Another benefit is the flatter lines of organization - the partners, associates, senior associates and staff that is so prevalent in larger firms
"I think those notions are outdated as far as the workplace is concerned," says Charles Bone, who late last year left Wyatt Tarrant & Combs to form his own firm, now known as Bone McAllester Norton.. "People don't want to be put in categories. They want to work together as a team to get the job done."
Many times partners who leave a larger firm to form their own practice or go to a smaller firm are doing so for economic reasons, says Norman Clark, a consultant at Altman Weil Inc., a Pennsylvania shareholder and consulting business that does legal consulting. Clark says the partners usually feel they can do better economically on their own, while charging the same fees they did at the larger firm, but without having to contribute to a large overhead.
In starting their firm, Farmer & Luna lawyers made lists of things to do and assigned themselves specific. For instance, Flowers handled the technology component; Pearigen took on the facilities aspect, handling such areas as leasing space and furniture purchases; Luna focused on client relations and business development. Unfortunately, Farmer was sidelined at the time by a huge trial, but managed to take on some of the business development responsibilities and handle the bulk of the banking requirements.
"The key part is we had to trust each other," says Luna.
The attorneys had to be satisfied with whatever decisions or selections were made and focused on making sure the transition was seamless. They met late at night and on weekends off-site, and called on friends and agencies for assistance.
When John Day, now a partner at Branham & Day, left Boult Cummings Conners & Berry in 1993 to open his own firm, he put together a budget but soon discovered he had underestimated revenue and expenses. In starting his firm, Day approached his bank for a $50,000 line of credit but the bank turned him down, so he established another banking relationship. The first bank indicated it would loan money to doctors but not to lawyers, because doctors have guaranteed income from Medicare and health insurance and lawyers have no such guarantees. Day says when first starting up a firm, running it is not that big a deal. But now his firm has 17 employees, including eight attorneys, so administration work takes a bit more time. With that in mind, Branham & Day just hired a firm administrator.
"I went about it in a fairly systematic way or at least I attempted to," says Day. "But there are certain things you can't anticipate or don't fully appreciate. Because in a big firm, you've got a lot of people making decisions for you."