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| Home - Industry Article - Jan 05 Issue |
Legal Basics For Software CEOs: Jack Russo, Russo & Hale LLP |
By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search
Angel Mehta: What is the core practice at Russo & Hale focused on?
Jack Russo: We are a boutique practice primarily focused on start-ups. We not only help entrepreneurs deal with start-up litigation problems, but also assist them to attract and retain talent -- executives who joined with those entrepreneurs to grow a business. We’re more associated with the intellectual capital than we are with the venture capital. That’s a major philosophical difference that drives who we choose as clients, the types of cases we take, and the type of start-up companies we choose to do work with. So we’re mainly an early-stage firm, helping folks grow businesses and succeed in their litigation problems.
Angel Mehta: Do law firms have ‘selection criteria’ for deciding whether to accept a startup as a client, the way that say, a venture firm or search firm would? What does a law firm, such as Russo and Hale, look for in a start-up company before you represent them?
Jack Russo: I’d say there are three key areas that will affect the success or failure of a start-up: the team, the market and their resources. The team must have a sense of mission around the opportunity and a degree of willingness to put in their own resources. Our big litmus test is how much of their own sweat equity, savings account dollars, second mortgages on their houses and credit card debt; have the team put into this venture.
An example is a person whom we recently interviewed. He has a very interesting product that’s beyond prototype with some potentially large corporate customers ready to buy. So I asked, “How much time and how much of your own capital have you put into this?” He said, “I’ve basically mortgaged everything so I have $750,000 of my own money.” This guy is in his 40s and has had a few prior successes, allowing him to put in that kind of money. He said that he had been at it for two years without salary and has 12 people around him that have been essentially self-funded.
That’s the kind of entrepreneur and team we want to see. We get a lot more excited about a team that’s devoted to an opportunity and then asks us to become part of their resources to help them get to the next stage of finding resources.
Angel Mehta: There has always seemed to be a bit of a shroud of mystique blanketing law firms in general. Most entrepreneurs I know have trouble understanding the difference between one firm and another, other than using brand as a proxy for competency…quality….pretty much everything. How does an entrepreneur know which law firm to use?
Jack Russo: I think brand is important and certainly large firms spend a lot of time and money perfecting their brand. But the truth is that large firms can unravel almost as quickly, if not more quickly, as small firms can. So that image of stability is a bit of a façade.
When you really pierce the issue, you should really ask “who’s the lawyer that I’m hiring and why am I hiring him or her?” The focus has to be on the individual lawyer; however, there are great lawyers to be found in small, medium and large firms. You really have to decide on the talent that you need and, if you have that particular talent, you should be able to get the team to perform. So you look at the individual senior partner, the firm’s specialization, besides the talent you have around to support the case. Also, you need to look at the team that comes to the table. How well do they work together? How efficiently do they plan and implement what needs to occur? How sensitive are they to your goals?
Angel Mehta: As you just mentioned, when somebody selects a lawyer, I think it’s mainly based on the senior partner. However, it’s not uncommon for the entrepreneur’s case to get kicked down to an associate. Should that be a huge concern?
Jack Russo: Yes, I think it’s an absolute concern because at larger firms the senior partners have to spread their time on a large array of projects, and whether you’re actually getting their attention and focus on your project is critical. It is important to know the degree of diffusion of that attention and focus. That’s a real critical piece of data that isn’t necessarily shared with clients. They can end up being very surprised at how little attention is really being spent by a senior partner in a larger firm because that person is involved in so many other things.
People sometimes say, you know, I’d rather just have the senior partner with no associate and I’ll pay the higher rate. Often, the senior partner will bristle at that because there is a need to delegate, particularly in large firms, to keep junior people busy. At Russo and Hale, we are under 20 people. There will be more partner talent focused on a particular client than they would get at larger firms that are forced by the pyramid scheme to be able to provide the service.
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