In a recent episode of the Legal Mastermind Podcast, Thomas Dunlap, managing partner at Dunlap Bennett & Ludwig, shared his journey of building a successful law firm. Hosted by Eric Bersano, Ryan Klein, and Chase Williams, this episode delves into the challenges and triumphs of growing a law firm from two lawyers to over 80. Dunlap offers valuable advice for attorneys contemplating whether to start their own firm or continue working within an established one.
The podcast begins with a discussion on the two primary paths for lawyers: joining an existing firm or starting their own practice. Dunlap emphasizes the significant challenges of the latter, including the lack of infrastructure and the necessity of building everything from scratch. He recounts his experience of leaving a firm to start his own with a fellow Army veteran. Despite their determination, they faced the reality that running a successful law firm involves more than just practicing law; it requires managing a business.
Overcoming Initial Challenges
One of the initial challenges Dunlap highlights is the misconception that hiring associates will ease the workload. He explains that each new hire, regardless of their competence, adds to the administrative burden. The solution, according to Dunlap, lies in reaching a critical mass where the firm can afford specialized administrative support. This realization led Dunlap and his partners to hire a Chief Operating Officer (COO) with extensive experience, even though it was a significant financial commitment.
Hiring a professional manager allowed Dunlap’s firm to grow substantially. The COO could focus on HR, finance, and staff management, freeing up the lawyers to concentrate on practicing law and acquiring clients. This strategic move enabled the firm to expand from 15 to 80 lawyers within five years. Dunlap stresses the importance of making tough financial decisions to facilitate growth and the necessity of trusting non-lawyers to manage the business aspects of the firm.
Building a Professional Team
Dunlap’s firm continued to expand by adding more professional staff, including marketing and finance experts. He recounts the resistance from some partners who were hesitant to invest in non-billable staff. However, these investments proved crucial in scaling the firm. For instance, hiring a marketing team and a Chief Financial Officer (CFO) helped streamline operations and improve financial planning, contributing to the firm’s rapid growth.
Another key decision was involving non-lawyers in significant operational roles. This approach, though initially met with skepticism, allowed the firm to benefit from diverse expertise. Dunlap points out that lawyers often have a biased view when making business decisions, favoring their practice areas. In contrast, professional managers can provide objective insights, leading to more balanced and effective decision-making.
Inflection Points in Law Firm Growth
Dunlap identifies several inflection points crucial to a law firm’s growth. One such point is deciding when to bring in new partners and how to structure their compensation. His firm initially made these decisions somewhat haphazardly, leading to conflicts. Over time, they developed a more measured approach, emphasizing the importance of cultural fit and long-term potential over immediate financial contributions.
Another critical inflection point is managing administrative burdens as the firm grows. Dunlap advises smaller firms to leverage economies of scale by joining larger networks or hiring fractional C-level executives who can provide part-time expertise without the full-time cost. This strategy enables smaller firms to access high-level management skills, which is crucial for sustainable growth.
Investing in Growth
The episode also explores the concept of law firms seeking external investment to fuel growth. Dunlap acknowledges that while traditional bank loans or private equity might be viable options, they must be approached with a well-thought-out business plan. Investments should be targeted at areas that directly contribute to the firm’s growth, such as administrative support and technology, rather than merely expanding headcount.
Private equity funds have approached Dunlap’s firm, and he notes the growing interest of investment groups in the legal industry. He predicts that more law firms will embrace external investment as a means to scale despite lawyers’ traditional reluctance to share ownership with non-lawyers. This trend, he believes, will reshape the industry, making it more competitive and innovative.
Discover More on The Legal Mastermind Podcast
The Legal Mastermind Podcast is a treasure trove of insights for law firm growth and management. With over 250 episodes, it offers valuable advice from industry experts on scaling legal practices. Hosted by Ryan Klein, Chase Williams, and Eric Bersano from Market My Market, the podcast covers a wide range of topics, from SEO and content marketing to operational efficiency and financial planning.
Listening to the Legal Mastermind Podcast can provide law firm owners and managers with the knowledge they need to navigate the complexities of running a successful practice. Market My Market specializes in helping law firms grow through transparent and results-driven marketing services. Whether you need SEO, content marketing, or website design, their team has the expertise to deliver data-driven success. For more insights, tune in to the Legal Mastermind Podcast. To learn more about Market My Market’s services or to schedule a consultation, visit our contact form or call (800) 997-7336.
