Hellmuth aims to continue its growth spurt
Posted: 12:13 pm Fri, August 16, 2013
By Patrick Thornton | MinnLawyer
When it opened in 1994, Dave Hellmuth and Chad Johnson were Hellmuth & Johnson. Today, the firm has 46 lawyers, about 20 practice areas and a new office building at the intersection of Interstate 494 and Highway 169.
In the beginning, the firm’s niche practice area was condominium and townhouse association law. The firm handled a number of construction defect litigation cases both large and small.
Blake Nelson became the firm’s third lawyer, joining Hellmuth & Johnson in 1997. In January 2011,he was named its second ever managing partner.
Nelson, who keeps a guitar and a framed photo of Led Zeppelin guitarist Jimmy Page in his office, said he tries to surround himself with smart people and then trust them to do the work they were hired to do.
“My job is to be the quarterback and the rest of the firm is the team carrying out the play book,” he said.
He recently talked with Minnesota Lawyer associate editor Patrick Thornton about the difference between a business that practices law and a law firm that is trying to run a business; what he looks for in potential law partners; and how the firm built an office building on a wetland with a bunch of trees.
Here’s an edited transcript of the discussion:
Q. Would you say you are a full-service firm?
A. Real estate and business are our core areas. That’s where we started as a firm, and under that umbrella, we have a very busy practice in condominium and townhouse law, construction and real estate transactions. But then there is a lot of litigation that spawns from those areas. We do everything from banking, creditor remedies, foreclosures, securitization of loans and mortgages.
There are always going to be specialized matters that we will refer out; things that we just don’t do. But as we’ve grown, we wanted to be able to provide a full palette. We have added employment, estate planning and family law, and those are very profitable areas for us today.
The goal is to bring in enough talent to keep a broad spectrum of services so our clients can stay with the firm.
Q. How do you accomplish that?
A. Cross-marketing and cross-promoting is a big focus. It helps us expand revenue to provide services to an already existing client. Our attorneys are very interactive and we do a lot of joint seminars here where we bring in an employment attorney and a business attorney to present together.
We have a unique compensation structure. We reward rainmaking even if you don’t do the work. What I mean by that is, if there is an employment attorney who has a client who calls him and says, ‘I need help with a divorce.’ If that lawyer says, ‘Let me connect you with my partner down the hall,’ that lawyer is paid a bonus based on the receipts even if he or she doesn’t lift a finger after making that first call.
What that does is foster the idea of keep your eyes open for every opportunity. For example, we had one business owner and we helped him buy his business, then we did his buy/sell agreements and then did his employment agreements. Later, he needed estate planning and then he needed to collect some money and then he needed a family law attorney. That is seven or eight matters from one client. The client stays with you because you do good work and you offer the services he or she needs.
Q. When you are talking to a potential lateral hire, what are you looking for?
A. We have added lawyers from firms — including Dorsey, Winthrop, Larkin Hoffman — and some who were solo practitioners. Both have worked out.
I have three points in my mind when I talk to people. What we tell people is: ‘As long as you do good work product, play well with others and meet your obligations to the firm, you will do well here.’
By meeting with people and introducing them to others at the firm, you can get a sense if they will fit in here and get along with the other people here. As for work product, a lot of times you may have been involved together in a case or they have a reputation among attorneys as someone who does quality work.
Meeting their financial obligations to the firm, that is the shot in the dark. They have the receipts for the last three years that says X, but the proof is in the pudding. And that’s true for the lateral hire joining our firm, too. Someone who joins our firm wants to be in a better financial situation. It works both ways.
Q. So growth is one of the firm’s immediate goals?
A. We have found that the lawyers that have come here are happy. They like how the firm is run, the atmosphere and our compensation package is attractive. We are at 46 [attorneys] now; we have been as big as 48 and we would like to be in that 55 to 60 range in the next few years. When we built this building, we knew we would be here for a while, so we wanted room to expand. We have offices available for up to about 60, but we don’t want to be bursting at the seams, either.
Q. Right. You recently made a big investment with this new building? Why build rather than rent?
A. We leased a building for 10 years very near here and the lease was expiring. We had run out of room. People were working on different floors and in noncontiguous space. We couldn’t get the space we needed there, so we decided to move.
We were looking to be entrepreneurial and we originally planned to buy a building. At that time, real estate was low, too. We knew we wanted to be on this corridor, but looked and couldn’t find anything that was worth the time or a good fit for us.
Q. It wasn’t an easy project, right?
A. When we located this lot, it was nothing more than a bunch of trees on a swamp. No one had done anything with it, primarily because of the parking situation. It was a challenge. You couldn’t put a surface parking lot anywhere because there are wetlands right behind us and a highway in front of us. And you couldn’t go down because it was too swampy.
We talked to some architects and said, ‘What can you do?’ They said you have to go up. And that’s what we did. The parking is the first three floors and there are offices on the fourth and fifth. The construction took most of 2010 and we moved in January 2011. Then they started road construction in June 2011.
Q. Your name is on the side of the building in big letters visible from 494. Did you worry about being labeled as ostentatious or that clients would see it and say, ‘So this is where all my money is going?’
A. We view this as a billboard for the firm. Hundreds of thousands of cars drive by here. If the building wasn’t high enough, it would defeat the purpose.
And if you walk in to a lot of the offices of the firms downtown, those are pretty nice, too. The grand piano in the lobby isn’t cheap. We tried to make the new office a welcoming, professional environment, but we don’t want it to be overdone. We don’t have unnecessary frills here.
When people come here, they like it. The parking and access is easy. For clients, when they come here, and for lateral hires that join us, they like being out here and not being downtown. Their clients don’t like having to navigate the skyways and figure out the parking. Here they can pull in to a spot and zip right up in the elevator.
Q. But does being out here hurt you at all?
A. Not at all. We haven’t had a problem in our core areas, in our areas of expertise. And these days it’s not that common that clients will stop by their lawyer’s office when so much of the communication is done on the phone or through email.
Q. What will the firm look like in five or 10 years?
A. We want this building fully occupied. To do that we will need to generate more business from our clients and attract laterals that can help us grow that pie. In 10 years I anticipate we may have another office. We won’t become complacent. We grew from three lawyers to 46 and we did so by running this like a business that practiced law versus a law firm that is trying to run a business.
Q. What does that mean? A business that practices law?
A. Look at the way we compensate partners [for referring business in-house]. I don’t know a lot of firms that do that. But to us it makes financial sense. That doesn’t have anything to do with the practice of law, the delivery of client services or the noble profession. It’s about running a business. And from an economic standpoint, if you have a sales organization, which is want we have, you need to reward the best salespeople.