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Fast-track Attorneys Beat a Path to Their Own Firm’s Door

Eric Herman
Reprinted with permission from Chicago Lawyer, Vol. 17 No. 4
February 14, 1994
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One afternoon when David P. Radelet returned to Wildman, Harrold, Allen, & Dixon from a morning meeting, a memorandum lay on his desk.

According to Radelet, the memorandum was addressed to "everybody in the office" and announced that he and fellow partner Ronald J. Hein had resigned from Wildman that morning. The memo surprised him. He and Hein planned to leave the firm in two weeks but had told no one at Wildman.

"Somehow, the rumor mill got ahead of us," Radelet explained later, sitting in the sunlit conference room of his new office.

When the rumors reached Wildman, its management committee "took the position that it was better for everybody if we would leave immediately," Radelet said.


 

William Sullivan (left); Jacqueline Golab, director of administration; and James Franczek prepare to unload more boxes after the new firm of Franczek, Sullivan, Mann, Crement, Hein, & Relias, P.C. moved into the 34th floor of 300 S. Wacker Drive.

"That day," he added. The memo at the start of February hurried the timetable for Radelet and Hein, two of 12 lawyers from four large Chicago firms who planned to open their own firm on Feb. 14: Franczek, Sullivan, Mann, Crement, Hein & Relias, P.C., a law firm with a practice confined to employment and education law.

The firm's genesis lay in a conversation between friends, beginning with James C. Franczek of Vedder, Price, Kaufman & Kammholz, a partner and former member of the firm's executive committee.

When Franczek ran into William R. Sullivan last spring at a benefit for the Scholarship and Guidance Association, it was like old times. As classmates at the University of Chicago Law School, they had taken study breaks over beers at Jimmy's on 55th Street.

The night of the benefit, they commiserated about their megafirms that provided "a little bit different atmosphere than we both yearned for," said Sullivan, a former partner at Seyfarth, Shaw, Fairweather & Geraldson.

Over a second round of beers, they discussed "the idea of wanting to do something on our own, to see if we could, at this time in our lives, create something that we think is not only profitable but fun," Franczek said.

"You look for new challenges. You look at something more than just your pocketbook. You start looking for collegiality," Franczek explained.

Inspired, they began considering who among their friends and colleagues might want to join them. They sought lawyers who had a "commonality of interest in terms of what they want to see out of a law firm," Franczek said.

"Size by itself creates a certain kind of culture because you have to do certain things that simply are a reflection of size. And the bigger you get, the less you can concern yourself with the people aspects of the practice of law," he explained.

Sullivan received positive responses from two of his partners at Seyfarth, Shaw: Robert E. Mann and Anthony J. Crement. He also contacted Hein and Radelet, who had started their careers there.

Franczek broached the idea with partners John A. Relias, Charles P. Rose and Andrea R. Waintroob and found them receptive. Later, partner Paul A. Millichap also expressed interest.

Franczek then approached Bruce C. Mackey, a partner at Klein, Thorpe & Jenkins. The two practiced at Scariano & Gubbins together as associates in the early '70s and had stayed friends. Mackey contacted fellow Klein, Thorpe partner J. Todd Faulkner, who, coincidentally, had once worked at Seyfarth, Shaw as a summer associate.

"People from the outside [looking] in say 'Four different law firms. How the hell did all these people get together?' But there really are interconnections all over the place that go back quite a few years," Franczek said.

With the core group of 12 partners formed, they began to lay the groundwork for starting the firm.

They held discussions about the cultural aspects. Is there an agreement on the kind of law firm you want? Basic ego kinds of questions like the compensation system, law firm name, things like that. We spent a considerable amount of time going through those kinds of things," Franczek said.

Such discussions formed a crucial first step, Franczek said, because, "you don't just throw yourself into it, especially when you're talking about people from four different law firms."

Before they could open their doors, the group also had to deal with "a whole myriad of logistical, administrative and financial things," Franczek said. The list included finding and leasing office space, obtaining insurance, forming a corporation, hiring office staff and associates, and obtaining telephones and office equipment.

They hired broker Jacqueline Hayes, Anthony Crement's sister, to help them find an office space "that clients would feel good about, but [that was] not ostentatious, not grandiose," Franczek said. He estimated that they visited between 40 and 50 office spaces. They eventually signed a 10 year lease on the 34th floor of 300 S. Wacker Drive.

"You get a little anal-compulsive about the whole thing. You think, 'Well maybe if I go take a look at one more building, that'll be it. That'll be a better place," Sullivan said. "We got carried away with it."

Once they signed the lease, they chose the architecture firm Torchia & Associates to design the space. On Dec. 20, 1993, they hired Dearborn Construction & Consulting, Inc. to build the Office because "we had a construction budget and they came in under budget." Franczek said. Construction began a week later.

To help them navigate the legal shoals of leaving four firms to found another, the group hired William A. Spence, a partner at Freeborn & Peters.

"We wanted to do this absolutely ethically. And the last thing we wanted to do was to call upon ourselves for ethical advice in that respect," Franczek explained.

Spence counseled them against "using time at the law firm to build a competing law firm," Sullivan said, which partly meant: "Don't solicit clients while you're with the law firm."

He also gave them "practical advice as to the best way to sever a long-term relationship," Sullivan said.

Spence also handled "corporate-related kinds of things" for the group, Franczek said. The law firm was incorporated as "N.L.F., P.C." on Nov. 17, 1993, according to the secretary of state's office. "It stood for 'Nameless Law Firm," Franczek said.

"No. 'New Law Firm,"' corrected Jacqueline Golab, the firm's director of administration.

Franczek calls Golab "the maestro" of the effort to have everything in place for the firm's Feb. 14, 1994, planned startup date. Five members of the group knew Golab from her days as a secretary at Seyfarth, Shaw. When they contacted her about managing their new office, she was working for AT&T as the manager of regulatory relations for the state of Illinois.

"The goal that I told them I would try to achieve for them was a seamless transition. They would go from their law firm to this law firm and never skip a beat," Golab said.

One of Golab's primary responsibilities was hiring staff and obtaining equipment for a law firm that did not yet exist.

"One of the hardest things I did was trying to sell people vendors, secretaries on a firm that I couldn't tell them the name of for a while," she said. "I had to talk to secretaries, for example, that were currently employed at law firms that were looking at other jobs, that had to leave those jobs to take a job with me at some future date with a law firm to be named later. That was kind of interesting.

With vendors, Golab found that the good names of the partners to-be provided the basis for credit.
And many groups provide startup funds, Sullivan said. "People start to make furniture and they don't even have a dime. But we said we'd pay," he added with a smile.

Golab's AT&T connections made the technological side of her task easier. The firm leased its telephone and computer equipment from AT&T, and Golab relied on her former coworkers there for advice on the equipment, making consultants unnecessary.

A computer sits on the desk of every lawyer at Franczek Sullivan. Golab insists that technology at the lawyers' former firms was "not only almost obsolete, but it costs them more to convert than as opposed to what we were experiencing, which was a 'green field' approach. Everything was new. We didn't have anything to change from, so that was an advantage."

The firm's "green field" management style also led it to subcontract support services. The firm chose Archer Management Services to perform filing, copying, supply and messenger services. Franczek Sullivan is thus able to fluctuate the size of its support staff according to its immediate needs.

"Day one, they're here doing all this. You don't have to hire them. You don't have to worry about their benefits. You don't have to worry about all the interviewing," Franczek said, shaking his head and making a pushing gesture in the air, as if at an imaginary pile of work he doesn't want.

But while Golab marshaled the troops and prepared for Feb. 14, the 12 partners-to-be were keeping their options open.

"We could have pulled the plug on this all the way up until maybe the first week of January. We would have lost a few bucks. But we were all willing to take the risk," Franczek said.

The abrupt expulsion of Radelet and Hein in February proved that the new firm had transformed from a beery idea into a sobriety-inducing entity. At the very least, it might have been viewed as a quisling organization, membership in which was grounds for dismissal.

The day of their showdown with Wildman, Harrold's management committee, "We were out of there with no planet to go to," Radelet said. "There were lots of jokes of, "What are you? Are you unemployed? Are you an independent contractor?"

But because of preparation, they were able to leave one "planet" and land immediately on another.

Golab had set up a temporary office in Suite 602 of their new building. When she heard from Radelet that day, she had additional computers, phone lines and fax machines set up immediately.

Radelet and Hein began work at their new firm that same day. Their relations with Wildman severed and the capacity to make phone calls and send letters well in hand, they had work to do their first day on the job.

"Interestingly," Radelet said, "because the firm [Wildman, Harrold] took the position that it took, that immediately freed us to begin talking to clients."

Two weeks later, having given various lengths of notice to their former firms, the other partners joined Radelet and Hein. The firm officially opened with 12 partners, 10 associates and one of counsel. They plan to grow at a "conservative" pace, Radelet said. Torchia & Associates already has designed a second floor of office space, and more associates are on the way.

Franczek is optimistic about his firm's ability to support such growth. "We've been calling clients," he said. "Really, the response has been extremely gratifying."