Technology 'a Blessing and a Curse,' New Mandelbaum Salsburg CEO Says
Planning for the future is, or should be, a common priority for midsize firms, and Mandelbaum Salsburg of Roseland put its succession plan in motion…
April 11, 2018 at 08:00 AM
10 minute read
Planning for the future is, or should be, a common priority for midsize firms, and Mandelbaum Salsburg of Roseland put its succession plan in motion years ago, according to the firm's leaders. As part of the plan, William Barrett as of Jan. 1 became CEO, a role he previously shared with the firm's founder.
*Editor's note: The below responses were lightly edited for style.
How big is your firm, where is it located and what are its primary areas of practice and focus?
Mandelbaum Salsburg P.C. is a midsize firm with 75 attorneys and approximately 55 support staff. We are a full-service firm in every sense with over 25 practice area specialties including corporate, real estate, litigation, health care, banking and finance, employment, family law, trusts and estates, tax law, etc. A full list of our firm's practice areas can be found on our website at www.lawfirm.ms. Our headquarters is at 3 Becker Farm Road in Roseland, New Jersey, but we have offices throughout New Jersey in Edison and Eatontown, as well as a newly expanded New York office in midtown Manhattan, an office in Palm Beach, Florida, and a recently opened office in Denver, Colorado.
Please explain your firm's governance structure and compensation model.
I became the Firm's sole CEO on Jan. 1 of this year as part of our succession plan put in place five years ago by Barry Mandelbaum, who ran the firm since the late 1960s. Barry was my mentor, and still is, and I served as his co-CEO for two years prior to becoming sole CEO. Barry is now the chairman of our board and chair of our real estate department. One of the first tasks I took on was to restructure the firm's committee assignments to oversee important elements more efficiently. In addition to our executive committee, we have a mentoring committee, technology committee, procedures committee, marketing committee, risk management committee, onboarding committee, etc. Conceptually and culturally, I believe that every shareholder should have an obligation to contribute to the firm's success and our firm's recent explosive growth, in my opinion, requires it. By delegating to the committee and practice area chairs, I am able to focus on the creation and execution of the firm's short-term and long- term business plans, including but not limited to, ensuring our continued financial success and recruiting the most highly skilled lawyers in the profession who also share our values and entrepreneurial culture.
What do you view as the two biggest opportunities for your firm, and what are the two biggest threats?
I would say talent attraction and clientele attraction are our two biggest opportunities and they often go hand in hand. I think that we are in a unique position to attract some of the most successful attorneys in our region because we offer an entrepreneurial atmosphere coupled with a sophisticated full-service platform allowing attorneys to develop and originate business in any practice area at any level. What attorneys and staff also love about working here is that we really are run like a family business. They have open access to management, they have autonomy and they are able to cultivate business at competitive rates from sources like mom-and-pop businesses to large publicly traded companies. We are able to attract clientele from both broad and niche industries because we have the bandwidth and scope to handle significant matters and compete with some of the largest firms in the country, but at the same time our efficiency and operations are attractive at all levels. We operate on a lean overhead allowing us to provide services and creativity in our fee structure.
I think the biggest threats that we face are similar to what many firms both small and large are facing, which is the commoditization of the services we offer because of both technology and competition. Technology is a blessing and a curse in this respect. If a person competing for business is willing to cut pricing and technology further feeds on what becomes acceptable fee structures for the consumer, it can actually hurt the profession because it causes the commoditization of our services. The other threat that we personally face is how to preserve the culture that has helped us to bring in such top talent with our rapid growth and expansion. If we make mistakes in our recruiting strategy, or as a result of the growth we become too institutionalized, we lose that entrepreneurial spirit that we have become known for. We need to ensure we stay unique and hold onto our culture as we get bigger. In order to understand your threats, you must understand what made you successful, and our culture is one of our strongest qualities.
After the recession hit, the prevailing theory was that midsize firms would start to see more work come their way from large clients who could no longer justify paying Big Law rates. What has been your experience?
Sure, when the recession hit, midsize firms saw more work but ultimately the large institutions went back to the law firms they had used for years and simply insisted that their professionals provide flexibility on rates and alternative fee structures. After the recession, as with in many industries, clients demanded more from their professionals, for less, regardless of size. I think big law firms had to flex a bit and they ended up retaining the clients. If you look at all segments of the business world, consumers of services demand more for less. Whether you are the middle market firm or the big firm, you do more for less now, so you don't lose the clients. It's a ripple effect. We've picked up larger clients because we've become a more sophisticated full-service firm with a greater bandwidth and worked hard to keep costs down.
Are your clients pushing for more alternative fee arrangements, and if so what types? Is your firm amenable to those requests?
We like to analogize ourselves to a speedboat and not a battle ship in our ability to be agile and flexible with our clients. Again, one of the benefits to the attorneys having open and immediate access to the decision-makers of the firm is that we can offer any type of financial arrangement we can make financial sense of, including but not limited to, contingencies, hybrid contingencies, discounted volume rates, success fees, and other creative arrangements that meet our client's needs.
There is much debate around how law firms can foster the next generation of legal talent. What advantages and disadvantages do midsize firms have in attracting and retaining young lawyers, particularly millennials?
We believe in mentoring and in giving young attorneys opportunities to develop their own book of business. We give them the access to management, more autnomy and the tools and resources they need to thrive. I'd recommend to millennials to look into midsize firms, as they are often the ones who allow for the most hands-on training and mentoring. I think that as a law firm, we have to adapt to each generation (millennials are not the first to shake up the law firm culture) and what strengths they can bring to our team, whether it's their technology savvy in research methods, their use of social media to expand our brand and the like.
Does your firm employ any nonlawyer professionals in high-level positions (e.g. COO, business development officer, chief strategy officer, etc.)? If so, why is it advantageous to have a nonlawyer in that role? If not, have you considered hiring any?
Yes. Hiring “non-lawyer professionals” for key strategic roles, such as business development and marketing and IT within the firm, has helped us to streamline our business operations. Bringing on board talented business professionals specifically trained in their area of expertise, whether it be accounting or marketing, allows us to focus more on our clients' needs, our legal work and business development. Our firm is run like a business and so it is essential that we have business-minded folks among our ranks to help us remain competitive. As we continue to grow and expand, we expect to have other high-level executives join our ranks.
What if any technology advancements have you made in your firm in recent years? What are the challenges in implementing tech changes?
The firm's technology committee ensures that it is at the forefront of technological developments that help keep the firm efficient, and therefore our rates fair and flexible, our information safe and in compliance with all of our client's needs. We use encryption methods for our data, have worked to move to cloud-based software, etc. The challenges to implementing technology changes include being a multi-office operation, so enforcement can pose a daunting task, ensuring that the attorneys and staff are fully trained on the proper use and etiquette involved in their usage. We also need to ensure that the cost on technology, which is often high, matches ROI.
What would you say is the most innovative thing your firm has done recently, whether it be internal operations, how you work with clients, etc.?
Barry Mandelbaum coined the phrase “built on relationships, focused on results” a number of years ago and we hold firm to that philosophy today. We believe that relationships are of paramount importance and face-to-face communication is the key to our success. We treat our clients more like friends and family, and the same goes for our staff. We value and cultivate our relationships on a daily basis. I personally have lunch meetings with clients daily, as does Barry and our other attorneys. Whether it's breakfast, coffee, or dinner, we know our clients, and they know us.
Does your firm have a succession plan in place? If so, what challenges do you face in trying to execute that plan? If you don't currently have a plan, is it an issue your firm is thinking about?
In 2016 the firm announced its succession plan, which included my being named as the firm's co-CEO alongside Barry Mandelbaum, who, as I mentioned before, has run the firm since the late 1960s. I grew up at Mandelbaum Salsburg with Barry as my mentor and learned everything I could about not only running a business, but doing it with heart and embracing the importance of culture in running a firm. Our succession plan is now in full swing and Barry is chairman of our board and chair of the firm's bustling real estate practice, while I have taken over the business operations as our sole CEO. I run the firm with our seven-person elected executive committee at my side and we rely on the recommendations of our committees. All good leaders know the importance of succession planning to succeed as a business. It's a concept that we often counsel our clients on and one that we believe ensures the stability and future of a business.
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