Advice on Starting Your Own Firm from Warren Burns, Esq., Founding Partner of Burns Charest LLP
Burns Charest LLP describes itself as a young firm with a dynamic and impressive pedigree. The firm was launched in 2015 and was the culmination of the combined efforts of experienced trial lawyers Warren Burns, Korey Nelson and Dan Charest. Founding member, Warren Burns, recently spoke to us about the challenging process of starting the firm and offered his advice to attorneys looking to take start their own firm.
CF: What was your first step towards starting your own firm? How long did the initial planning stages take?
WB: Burns Charest first opened its doors on April 1, 2015. However, the planning behind the origination of the firm had been well underway for at least four or five months before then. Towards the end of 2014, I met with my partners—Dan Charest and Korey Nelson—and we began to sketch out our ideas for a new firm and talk about ways to make our ideas viable. From there, we went into the details of how to get funding for this new venture.
CF: Funding for a new firm is an important component and critical to the success of the business. How did Burns Charest figure out what sort of financing was right for the firm?
WB: Well it’s going to be different for everyone. We knew going into it that we were going to have a large portfolio of contingency fee cases, so we needed financing that we could depend on. We wanted to work with financers who worked in the contingency fee world, which of course the team at Counsel Financial does. For a firm like ours, having a lender like Counsel Financial who knows the business and is flexible is a great asset.
CF: The thought of starting your own firm can be daunting. Did you find it helpful to talk to other attorneys who had already started their own firms when you were in the planning stages of getting Burns Charest up and running?
WB: Yes, I definitely did. During the planning stage, I reached out to several people in the plaintiffs’ bar that I respected, and who had done what I was contemplating doing—I found that very helpful. Everyone I spoke to had arrived at the idea of starting their own firm from a slightly different perspective which was useful when brainstorming about how to solve some of the practical challenges our new firm was sure to face in the future.
CF: How did you decide who you wanted to join you in taking on this challenge?
WB: We’ve been lucky. The great thing about our firm is that the founding members have basically been friends since the first day of law school. Korey, Dan and myself have been through a lot together and even before we became law partners in our own firm, we had developed a strong bond. We all trusted each other completely which was very important to me. I thought to myself, if I’m going to be running this firm for 20 or 30 more years, I want to be doing it with friends that I trust.
CF: The decision to join another firm, joint venture or co-counsel with another firm or to just go out on our own is crucial. What made you decide to start your own firm with your partners?
WB: Well, it was a combination of things. At the time, I found myself increasingly running into conflict issues with my prior firm, Susman Godfrey, which was taking more of a defense stance on a lot of cases. This was an issue for me because most of my practice involved large class action cases. But honestly, I would say that it boils down to some people are more natural entrepreneurs and gravitate towards running their own businesses. I think I’m one of those people and so are my partners. We like having the ability to control our own destiny so starting our own firm just made sense for us.
CF: How did you and your old firm handle your departure? What is the initial step an attorney should take who’s looking to start his or her own practice?
WB: The first thing any attorney should do when leaving an established partnership is to read the partnership agreement—that is so important. You need to know what is in the agreement and what isn’t in the agreement regarding departing partners, so you can prepare for those discussions from a position of knowledge and strength. I would say on a personal level, for me, it was difficult to tell my old firm that I was leaving. I had established great relationships there that I still have today. However, the timing of my departure from Susman Godfrey coincided with the firm’s decision to close the Dallas office, which did help to make the transition a little bit smoother for both sides.
CF: How did you handle informing clients that you were leaving your firm? Was it difficult to talk to your old firm about taking cases with you?
WB: Essentially, we did what was specified in the partnership agreement. I can’t stress the importance of reading and understanding your partnership agreement enough. We let our partnership agreement really be our touchstone on how we needed to approach the conversation surrounding clients and cases with Susman. I remember with some clients, it came down to a matter of negotiation on how they would be informed, but with other clients there wasn’t as much red tape. Dan and I agreed when we left Susman that we were going to do this entire process in a very above-board manner. We knew going into it that we were going to talk and negotiate with Susman, and we weren’t looking to burn any bridges.
CF: Did your old firm have any liens on settlements of cases you took with you? How did you and your new firm negotiate that with your previous firm?
WB: Currently, the new firm has one remaining interest in a case from my old firm. Most of my cases at Susman were very large class action cases where the firm had advanced various amounts of money on the cases, and in many instances I was lead counsel, so essentially the process boiled down to a negotiation. We worked out a deal with Susman that wasn’t uniform across board—some cases were more important to them than others and therefore they wanted to retain a bigger stake in them. I would say that the process took around two weeks from start to finish. We made our announcement and then we worked with the managing partners to take stock of the cases that we were taking and the cases that were staying with the firm.
CF: Did you hire outside corporate counsel or utilize a special ethics expert?
WB: While we did hire outside counsel to assist us in the legal structure of the new firm, we didn’t do the same for ethical considerations. My partners and I really just took the time to examine all the ABA rules that applied to us and put them into action in our new firm.
CF: How did you set up the new firm? There are so many matters to consider: structure, legal and tax considerations; budgets and projections; partnership agreements.
WB: From the beginning. we anticipated that as time goes on, things were going to change in the partnership because naturally, you’re going to bring additional people in and change how compensation works. So, we were always open to change. I would also say that from the beginning, we were a “rising tide” type of operation, and by that I mean we were going to be a true partnership where the division of equity and compensation would be split equally.
With regard to budgeting, I sat down and took a look at our case load, most of which was comprised of contingency fee cases. Then, I figured out what a 12-month budget and a three-year budget would look like, based on my experience at Susman. The rest of the budgeting for the firm I would say, was frankly a matter of researching how much things cost—for instance, how much is a copier and how much will a lease cost me? This is the part of running a law firm that they don’t teach you about in law school.
CF: Do you have any practical tips for attorneys looking to start their own firm?
WB: Some practical advice that I might give is to be flexible. Depending on where you are located, there are startup consultants who can be helpful in taking away some of the burden of setting up some of the basic systems your firm needs, like phone and email systems. We didn’t use a startup consultant—we did everything ourselves—so it’s definitely doable. Honestly, when you are starting up it’s all trial and error. What I would say to anyone starting their own firm and looking to grow into a medium-sized firm, is to invest in an accounting system that can grow with you.
You need to be flexible when starting a new firm. You don’t know what the future holds, so just be prepared to pivot as you learn more. I would suggest reading your contracts with vendors closely so you don’t lock yourself in for five years. Try to get one-year contract so you can reassess as you go and determine if something is working for you and your firm’s needs.
CF: The COVID-19 pandemic has changed the way we do business. How do you think it will impact the way we practice law in the future?
WB: I think the COVID-19 shutdown has made a lot of attorneys realize we can get by on a lot less. Instead of flying out to San Francisco for a meeting, we now just have a Zoom meeting and honestly, it’s more efficient and in a lot of situations, just as effective. The challenges come with court appearances, mediations and settlements which in my opinion, you do need to do in person. Obviously, it’s possible to do them remotely but I’m not sure if they are as successful that way. Going forward, with more and more attorneys showing that working from home is a viable option, I think a lot of firms in major cities, like New York City, might reconsider paying top dollar for huge office spaces. A lease is one of a firm’s greatest expenses.
Counsel Financial provides working capital credit lines exclusively for the plaintiffs' bar in all states except California, where credit lines are issued by California Attorney Lending.