Law firm spin-offs are a familiar phenomenon in CEE. To find out what challenges lawyers have to deal with when they leave established firms to start new ones in the current climate, CEE Legal Matters sat down with several partners who have done just that to get their perspectives on the process.
The Drive to Be Different
“Why not?”, laughed Anca Mihailescu, Partner at Ijdelea Mihailescu, when asked why she left Nestor, Nestor, Diculescu, Kingston, Peterson to join with Oana Ijdelea and start a new firm. She added: “I left my previous firm because I wanted to do things my way, to take the good and leave the bad and take everything that I learned and try to not take the things I didn’t enjoy as much.”
Indeed, a number of partners spoke of the desire to take the technical skills they had learned in their previous positions and create something new. Serban Patriciu, Partner at Patriciu, explained that his decision to leave Bondoc & Asociatii was made non-scientifically. “We weren’t very pragmatic [about it]. There wasn’t a specific point where we sat down, looked at the figures, and told ourselves that we had enough portable business to do it our own.” Instead, he said: “We had a vision that we could start something new and we’re ambitious to prove ourselves right in thinking that a boutique law firm specialized on real estate could work and that there is a market for us.”
Others emphasized their desire to innovate in serving clients. BRH Law Partner Madalina Berechet, who split off from Suciu Popa, said that large firms tend to become “out of fashion,” and relatively slow to adapt their modus operandi to businesses often moving too fast for their levels of flexibility, especially because despite the pressure to keep up, many of the larger firms have developed levels of comfort around their long-standing brands. In contrast, she claimed, newer firms tend to be more in sync with their clients. Indeed, she noted, many clients developed closer relationships with the associates who had day-to-day responsibility for managing their affairs at the bigger firms than with the partners who oversee the contact. “Of course, [those clients] are supervised by a Senior Partner, but [the associates] are usually the first point of contact, they are the ones always on call, and even in terms of age they tend to be more compatible.” And the limited contact between senior partners and their clients can limit those partners’ effectiveness as well. “Without that constant interaction with the client it’s so much easier for older partners to err on the side of caution and take conservative approaches to getting a job done.”
Mihailescu agreed. “By no means am I saying that big law firms are not good,” she insisted. “But I do think there are times where things can get caught between too many lawyers, too many projects, and things can get lost in the process.” And this problem, she claimed, can be tied in part to particularities of the market she works in: “In Romania, business law is rather new, so all large law firms grew in a short time. It is hard to grow in the best manner possible in this setting as things can get lost in this process. You simply cannot hire 100 excellent lawyers in the span of three years. In contrast, in London, where you had business law for over 100 years, you could expect far more organic growth.”
While rejecting the strategy of growing just for the sake of growth, many we spoke with referred to the goal of building a happy team. Andreea Suciu, Partner at Suciu|The Employment Law Firm, who split off from Noerr, said that she hoped that her way of doing business would attract employees and colleagues who were turned off by the traditional way of doing business. “I am hoping to build a genuine team where people enjoy coming in to work,” she said. “I want to do things a bit differently from established firms. For example, I want to implement flexi-time as opposed to ‘you have to come in from 9 to 6 or 7 or 8.’”
Taking the Dive
But success, for would-be entrepreneurs, requires mustering the courage to take a leap of faith into the unknown, and many of the partners we spoke to described the anxiety they experienced informing old clients about their moves. Andrea Suciu, whose firm focuses on Employment law, said that “it is not yet a trend in Romania to be a boutique specializing in one field of law. In our market clients are used to picking one firm and having all areas covered, so I didn’t know what to expect in terms of reactions.”
Madalina Berechet recalled that her departure from Suciu Popa was made even more difficult because, as that firm had itself split off from Musat & Asociatii just a year before, it represented, in essence, a spin-off from a spin-off. As a result, she said, “I was faced with telling my clients that I was leaving for a second time within a rather small period, and that felt quite awkward.”
Ultimately, both Suciu and Berechet said their fears were unwarranted. Suciu recalled: “I was happy to see that clients don’t care. They’re not looking for a full-service offering – but to have solid support in each area, even if that means picking multiple boutiques.” In addition, she said “they are looking for good relationships, for good lawyers. Really, it’s like going to the doctor. What is critical is who you are working with and building the right trust in that relationship.”
Berechet had a similar experience, as her clients told her that “it doesn’t matter the name of the firm you are working in, what really matters is the lawyer or team of lawyers that works on our cases.” She described this reaction as “a happy surprise.”
Patriciu’s experience mirrored those of Suciu and Berechet. “We were relaxed by the vote of confidence of clients following us. It’s like pushing a boulder up a hill. Sometimes you get tired, but we have a lot of enthusiasm and are sure that things will only get better.”
[Managing] The Challenge
Even when clients do come along, adjustment to the new reality is not always easy. Serban Patriciu admitted that “we needed to get accustomed to the new format,” and Madalina Berechet recalled the experience of working for a few weeks without a proper office as difficult, especially for a lawyer who was “used to giving off a specific image.”
Andreea Suciu’s memories suggest that flexibility, and an ability to change plans, may be useful. “I did initially think I need to do what other lawyers do: have my own office, a receptionist, a conference room, etc., but it’s just me plus one more lawyer (and soon, maybe two), so I didn’t think this would be a wise choice. I did want a community around me, though, so I started working in a shared office environment (something I never expected to do).” Surprisingly, however, she found that flexibility rewarded. “I love [this arrangement] because you get to interact with a great deal of professionals while having all the other necessary elements, such as a secretary, a conference room, etc.” The shared office space also gave her valuable structure, she said. “I had the chance to work from coffee shops and home office but I am a social person. I can’t imagine myself doing that for the long run – and I don’t want to send the message that I am a small one-man-show working from home as a brand image either.”
Of course, operating your own firm – in whatever form – means losing the institutional support you enjoyed previously. According to Anca Mihailescu, “when you have your own law firm, people tend to look at you in another way. Even though the client knew only me as the one who was negotiating and doing the work, I felt I had a cover – a wall – the idea that I had a large institution behind me.”
And the differences are not only psychological; there are significant practical difficulties involved in splitting off as well. Serban Patriciu noted that while it is the lawyering that gives him the most pleasure, “we need to deal with the business side of things too.” He sighed. “We, lawyers, are not businessmen – law school does not prepare you to run a business.” As a result, he said, “we play things by ear and follow what others are doing.”
Mihailescu echoed Patriciu’s comment, saying, “I think the management part is the biggest challenge – no, I don’t think, I know.” She recalled watching an interview when she was young with a senior partner who talked about how hard it was to be a manager and reporting that taking time away from lawyering was, “painful, but you have to do it.” She said when she first saw the interview she rolled her eyes and thought, “come on…how hard can it be? You’re the boss!” But, she said, “now I remember that interview and I feel what was said there. Coordinating teams of lawyers on various occasions is different from having to manage and handle everything, from the cleaning lady to the office that I designed … to IT, and many other things.”
At the end of the day, however, the difficulties of running his own business were useful, Patriciu claimed, and made him a better advisor, as he now “feels the pain” with his clients. “I now have skin in the game,” he said. “I am going through the same process that some of our clients went through 10-20 years ago, so I understand better where they are coming from as a business owner.”
Bring on The Clients
“It’s been a very interesting first year,” said Serban Patriciu. “Of course, the stakes are high. Even though we were followed by all of our previous clients, we still needed to permanently expand our client base.” And to do so, he said, meant focusing on “two main pillars: connections and reputation.” Perhaps counterintuitively, he said, he and his partner, Andreea Secu, did not reap as much benefit from their previous association with a well-established firm, because they had been so embedded in that firm’s strong brand, and it is “quite tough to create and establish a new brand for ourselves that clients can refer to. This takes time, but it is something we need to do on a daily basis.”
In reaching out to new clients, Patriciu said, it is important to put forward your technical skills. He reflected on the ways he and his colleagues do this now: “We want to concentrate on providing valuable information through articles, we go to conferences, we try to improve ourselves all the time – for example, Andreea is getting her Ph.D. – and we’re contemplating publishing a book. We want to put forward our technical skills but also emphasize what we have different as a firm specializing on real estate.”
But choosing the particular method of reaching new clients isn’t so simple, noted Andreea Suciu. “It is hard to measure what really generates more: conferences, writing articles, asking for references, putting up banners on different platforms, etc.” Nonetheless, she prefers those methods to the tastelessness and tackiness of self-promotion. “What I hate is direct selling,” she insisted, “because I hate it when people do it to me. Building up a relationship takes a whole lot more time, of course, but these days there are so many firms that sell directly with a pitch about how great they are. To me, content marketing is ideal because we can show what we can do for them rather than the usual spiel of ‘we are the greatest in Romania.’” She laughed. “We’re all great. Maybe the fees and our size vary, but we’re all great.”
Finally, Anca Mihailescu warned about the dangers of overconfidence that may come when initial business is good. “One thing that I was taught when I was a younger lawyer but didn’t pay as much attention to at the time,” she said, “is that when you are busy, that’s when you need to do business development. When you are not busy, you are desperate for work and it shows.”
Brick by Brick
Ultimately, slow-but-steady seems to be the recommended pace. “I find it important to take it one step at a time,” said Andreea Suciu. “For example, be careful with costs, because people forget they no longer have a fixed income. Just take it slow and remember to always stay grounded.”
Part of that grounding appears to take the form of realistic goals in terms of firm growth. Indeed, most of the partners we spoke to claimed they had no interest in growing to the size of the major existing firms in the country. Suciu noted that his firm had around ten lawyers, and “I think ten will suffice, considering we are a niche firm.”
And Serban Patriciu cited a similar goal, including two or three partners. “We don’t want to become big for the sake of it,” he said. “Just to have a number to put on our marketing materials to impress clients. Our initial plan was to reach the ten-lawyer mark that the biggest firms here have in terms of their real estate teams, but we do not suffer because we are not there yet.”
Anca Mihailescu, whose team is already at that magic number of ten, said she aims to grow to 30 to 40 lawyers in the next five years, with an ultimate goal of growing, over time, to about 50 professionals, including seven partners. She explained that her ideal method of growth is to “hire young lawyers and shape them” since lawyers moving laterally with years of experience at other firms are used to different cultures and have learned and internalized a different set of values.
Several of the partners we spoke to suggested that growth might, in fact, distract them from the work they really wanted to be doing. According to Suciu, “not only would it be difficult to justify being a firm of 50, it’d be difficult to manage it all and I don’t think I’d enjoy working in that setting.” Madalina Berechet agreed, noting that she’d very much prefer working on ten cases, and not on 300.
Feeling the Feeling
Ultimately, everyone we spoke to was enthusiastic about their decision to split off from more established firms. “I knew I wanted to do this with, all the risks involved,” said Andrea Suciu. “It is good to have dreams, but avoiding pressure means you avoid stress, and I am keen to do what I like, and I am sure that that positivity will translate into healthy success in the long run.”
A similarly positive vibe was expressed by Serban Patriciu. “It’s like being a father. There are few real revelations, but there are bits and pieces along the way. We have created a baby and are excited to see it starting to walk on its own two feet.”
This Article was originally published in Issue 5.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
