Christopher Parnagian and Robert O'Hare did not leave big firms because they had to. They left because they thought they could make a start up firm a success. Six months later they have no regrets and much advice for associates who are willing to keep up the hard work but want to do so on their own terms. In the spring of 1996, Mr. O'Hare drove to New York from Delaware to meet Mr. Parnagian, a friend from St. John's University School of Law, and his wife for brunch. Mr. Parnagian, a corporate associate at Thelen Reid & Priest LLP and, according to him, the "catalyst," albeit the "conservative," of the start up, asked Mr. O'Hare if he would consider a partnership. Although Mr. O'Hare, now 35, had been thinking of going out on his own since law school, he wanted to work at big firms first. After two years as an associate at Haight, Gardner, Poor & Havens and a year serving as a law clerk in the Third Circuit, Mr. O'Hare returned to New York as an associate at Skadden, Arps, Slate, Meagher & Flom. He describes his experience working in the litigation department at Skadden over the next two years, with "some of the country's finest lawyers," as a positive one. By late fall 1998, Mr. O'Hare was ready for a change. Though he never received any indication that he was not on the partnership track, he wanted an opportunity to make decisions and find clients on his own. At Skadden, he said, "there was pressure to find solutions but partners were responsible for all decisions. Conveying this to clients was daunting." Mr. Parnagian, who liked his job at Thelen and was also optimistic about eventually becoming a partner, felt he needed more control over his schedule and career. Late in 1998, Messrs. Parnagian and O'Hare divided the tasks for their new venture, but since both were busy with work, did not do much planning until late January. In retrospect, Mr. Parnagian said he regretted not having enough time to set up the administrative, computer and research resources for the new firm. In fact, Mr. O'Hare gave Skadden his two weeks notice before O'Hare Parnagian even had office space. "If you are not forced out and do not hate big firm culture it's hard to leave and start your own firm. You have to balance great experience against lifestyle and mind set issues getting used to big salaries and locked in with firm clients," Mr. O'Hare said. "I arrived at a crossroads." Achieving a balance between making a plan and taking a plunge was also important. If they did not fine tune all the details before February 1999, when the firm officially opened, they did balance their books before leaving their six figure salaries. Both Messrs. O'Hare and Parnagian had saved enough money to make an initial capital investment of between $15,000 and $20,000 and to give O'Hare Parnagian an 18 month "no draw" period. Former big firm colleagues pointed to other personality and personal life factors that helped make the O'Hare Parnagian venture possible. Larry McCabe, a friend and fellow associate of Mr. O'Hare at Skadden, said "Bob is special — a sharp guy with lots of guts and a good lawyer. Plus, [he] is single, with no kids to worry about and he had the comfort of a partner with corporate clients," he added. Bruce Rich, partner who worked with Mr. Parnagian at Thelen and is deputy chair of the firm's business and finance department, said Mr. Parnagian was also in an exceptional situation. "Chris had a previous career before he joined the firm. He was older, more mature and had a business background. Fellow associates who took straighter paths would have been more reluctant to go out on their own." Mr. Parnagian, 39, said working on business proposals at TRW Inc. before law school may have given him an edge other lawyers lack. While he has a mortgage to pay and a new son to support, he insists that his wife's unwavering encouragement and steady income alleviates some of the added pressure to produce early. Mr. O'Hare said he not only had the support of his friends, parents and siblings, but also that of his old firm. "If I was leaving to go off to another big firm, things may have been otherwise. But because I was going out on my own everyone at Skadden was encouraging." But a big firm background also has baggage in terms of client expectations. Mr. O'Hare said he and Mr. Parnagian are, as best they can, trying to practice as they did before. "Had we come from smaller firms, he said, we may not have felt the pressure to keep this continuity in terms of service." Both insist that proper capitalization is crucial." You can't nickel and dime on overhead," Mr. Parnagian said. Mr. O'Hare advised lawyers against taking "shortcuts" when acquiring computers and support staff, especially if they are used to the infrastructure of big firms. On the other hand, they emphasized that lawyers dreaming of their own firm should not be put off by set up costs. "Most lawyers don't realize that there is a very low barrier to entry. You can handle facilities, insurance, security deposits and other initial payments for under $25,000," Mr. Parnagian said. They also advocate a do-it-yourself approach. The duo managed to find a Wall Street office suite and staff, including a full-time receptionist and part-time legal secretary, without using consultants or brokers. In terms of clientele and compensation, O'Hare Parnagian has tried to be cautious and creative. The firm has handled mostly "safe" transactional work and meritorious claims, asking for modest retainers and references up front. But they have also tried to come up with inventive fee structuring and flexible billing plans when working with smaller clients. More flexibility has also meant more personal relationships and growth. The partners work closely with each other and with clients. "Our clients appreciate the legal talent of big firms but want more than just a call back. We can give quality and attention," Mr. O'Hare said. Besides small businesses and individuals, O'Hare Parnagian also works for larger corporations like Sea Land Service, Inc., an ocean carrier in the global shipping industry and subsidiary of CSX Corporation, and TRICOM U.S.A. Inc., an international telephone carrier and subsidiary of TRICOM S.A. "The legal issues ... are the same as before, but the dollar amounts are different," Mr. O'Hare said. Many of the firm's clients are too small for big firms to handle but require similar services. For Mr. Parnagian, more non-billable time is not necessarily a bad sign. And he insists that working without other lawyers to lean on has prompted him to gain a working knowledge of other specialities.
|
|
||||||||
| Copyright © 1999-2008 by O'Hare Parnagian LLP. All rights reserved. Disclaimer. | |||||||||
