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Article: The Lawyer as Entrepreneur

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The Lawyer as Entrepreneur

At first glance, lawyers and entrepreneurs don't have much in common.  Much like accounting or medicine, many lawyers choose the law as a profession because it offers a low-risk (if high-stress) means to a long, relatively well-paid, and tightly-controlled career at a privately-held law firm or government position.  Some even characterize the law as fundamentally antithetical to the entrepreneurial endeavor.  Take, for example, Carleton S. Fiorina, the president and chief executive of Hewlett-Packard.  In comments to the New York Times profile, Fiorina, who dropped out of UCLA's law school after one semester, noted that she left the law because she could not accept the idea of continually adhering to precedent.  Her point was not lost on the Times, which credited Fiorina as a someone who rose to the top by virtue of her willingness to defy the norms of the traditionally male-dominated world of high-tech business.

Nevertheless, the law isn't devoid of entrepreneurial spirit.  For instance, personal injury and product liability attorneys take enormous risks that, for better or for worse, require an entrepreneur's initiative, and sometimes yield huge rewards (see tobacco fees).  Equally important, as the examples and discussion below illustrate, there are plenty of lawyers who have become entrepreneurs themselves, using their legal expertise to found their own businesses in a wide variety of industries. 

A gallery of lawyer-entrepreneurs

If there was such thing as a lawyer-entrepreneur hall of fame, the following individuals would certainly be nominees for entry:

Rick Rosenfeld and Larry Flax: While working as federal prosecutors, these two must have worked up some mighty appetites.  In 1985, Rosenfeld and Flax gave up the courtroom to open up the first California Pizza Kitchen in Beverly Hills, California. Offering such delights such as BBQ chicken pizza, CPK has grown to 92 locations in 20 states and two countries. 

~ Jodi Sax: Since 1997, Jodi Sax, a practicing specialist in copyright, new media, and music law at L.A.'s Small Larkin, has designed and maintained lawgirl.com.  Part of the Chickclick network, Lawgirl.com features an array of law-related resources such as: a summary of copyright basics, links to instructions and forms for registering particular U.S. copyright, tips on trademarks, a music law forum, and "Ask Lawgirl," a question and answer board for entertainment and IP questions.  On the lighter side, the site also offers other features such as the "Web Hunk O' the Month" and "What's the deal, Ally McBeal?" Look for Sax's next project: a portal called kinked.com, the "pop culture collective."

Despite the stereotypical image of the "ambulance chaser," most people don't regard lawyers as risk-takers or entrepreneurs.  Indeed, much like accounting or medicine, many choose the law as a profession precisely because it offers a low-risk (if high-stress) means to have a long, relatively well-paid, and tightly-controlled career at a privately-held law firm or government position.

Not surprisingly, some even characterize the law as fundamentally antithetical to the entrepreneurial endeavor.  Take, for example, Carleton S. Fiorina, the newly-appointed president and chief executive of Hewlett-Packard.  In a recent New York Times profile, Fiorina, who dropped out of UCLA's law school after one semester, noted that she left the law because she could not accept the idea of continually adhering to precedent.  Her point was not lost on the Times, which credited Fiorina as a someone who rose to the top by virtue of her willingness to defy the norms of the traditionally male-dominated world of high-tech business.

Nevertheless, all lawyers aren't devoid of entrepreneurial spirit.  For instance, personal injury and product liability attorneys take enormous risks that, for better or for worse, require an entrepreneur's initiative, and sometimes yield huge rewards (see tobacco fees).  Equally important, as the examples and discussion below illustrate, there are plenty of lawyers who have become entrepreneurs themselves, using their legal expertise to found their own businesses in a wide variety of industries. 

~ A gallery of lawyer-entrepreneurs

If there was such thing as a lawyer-entrepreneur hall of fame, the following individuals would certainly be nominees for entry:

Rick Rosenfeld and Larry Flax: While working as federal prosecutors, these two must have worked up some mighty appetites.  In 1985, Rosenfeld and Flax gave up the courtroom to open up the first California Pizza Kitchen in Beverly Hills, California. Offering such delights such as BBQ chicken pizza, CPK has grown to 92 locations in 20 states and two countries. 

Jodi Sax: Since 1997, Jodi Sax, a practicing specialist in copyright, new media, and music law at L.A.'s Small Larkin, has designed and maintained lawgirl.com.  Part of the Chickclick network, Lawgirl.com features an array of law-related resources, such as a summary of copyright basics, links to instructions and forms for registering particular U.S. copyright, tips on trademarks, a music law forum, and "Ask Lawgirl," a question and answer board for entertainment and IP questions.  On the lighter side, the site also offers other features such as the "Web Hunk O' the Month" and "What's the deal, Ally McBeal?" Look for Sax's next project: a portal called kinked.com, the "pop culture collective."

Robin Richards: A graduate of the Whittier College School of Law, Robin Richards serves as president of MP3.com, a provider of music downloads and one of the hottest Internet stocks around.  As the founder of Lexi International and the former managing director of Tickets.com, Richards has piled up accolades for his business accomplishments.  In 1995, accounting and consulting giant Ernst & Young named Richards the "Entrepreneur of the Year."

~ Todd Wagner: In July 1998, Broadcast.com, a Web-based provider of audio and video content, caught Wall Street's attention with an energetic initial public offering that raised the company $45 million.  Behind the success was Todd Wagner, a co-founder and CEO of Broadcast.com.  A graduate of the University of Virginia School of Law, Wagner practiced at Akin, Gump, Strauss, Hauer & Feld, and Hopkins & Sutter before donning the entrepreneur's hat.  At Broadcast.com, Wagner is credited with structuring the company's financing, negotiating acquisitions of two other companies, and helping put together an international joint venture with Internet visionary Masayoshi Son's Softbank Corporation. 

Arnold Brown II: What's with all these lawyers and music?  Formerly an associate with Pillsbury, Madison & Sutro, and Venture Law Group, Arnold Brown in 1996 founded Audio Explosion, based in San Francisco.  Capitalizing on the emergence of MP3 technology, Brown recently launched mjuice.com, an online provider of MP3 files.

Joseph Barry: This one-time poverty lawyer had the vision to see that recession-induced real estate slump of the early Nineties wouldn't last.  In 1994, Barry paid "a pittance" to take over the Port Libert? real estate development, a failed $750 million "Venice-on-the-Hudson" project in Northern New Jersey.  In 1999, with a strong economy producing red hot demand for residential real estate near New York City, Barry plans to expand Port Libert? with 134 new condominiums and an 18 hole golf course. 

Becoming a lawyer-entrepreneur: practice makes perfect

As the above list indicates, the paths to becoming a lawyer-entrepreneur are several.  However, it seems the most common scenario is to become an entrepreneur after practicing for a few years.  In the words of one of our law contacts: "Several of my law school classmates were interested in starting their own business, but didn't jump into it right away.  It's a big step to graduate and not practice, particularly when you have loans to pay off."

~ Naturally, certain practice areas seem lend themselves better to lawyers looking to make the leap into entrepreneurship.  One former Cravath, Swaine & Moore insider tells Vault.com: "If you're interested in starting your own business, corporate finance and securities offerings is your best bet.  I have friends at Cravath who are constantly reading businesses prospectuses, and it's a great way to get contact with entrepreneurs."

Practicing for a few years can have other advantages beyond getting experience and paying off loans.  Consider, for example, the case of Josh Rochlin, a former associate at New York's Rubin Baum Levin Constant & Friedman, and founder of MyCalendar.com, a Web-based personal organizer.  According to the New York Law Journal, Rochlin's decision to leave Rubin Baum was anything but unfriendly. In exchange for a six percent equity stake, the firm invested $400,000 in Rochlin's new venture, and even offered the entrepreneur the use of an office at the firm. Despite non-existent revenues and a uncertain future, the fledgling business has many at the firm buzzing, including its chairman, who enthusiastically commented to the NYLJ: "It's a unique time.  Never in my 40 years of practicing of law have I seen anything like this."

Becoming a lawyer-entrepreneur: diving right in

Most career specialists will counsel against going through three years law school with the sole intention of starting a business.  However, having a law degree will never hurt an entrepreneur, even those fresh out of law school.  For one, entrepreneurs with legal training will have the ability to draft contracts, choose a corporate structure, and deal with investors with confidence.  The JD also gives an entrepreneur a certain sense of confidence. "You learn how not to let contracts push you around," one lawyer-entrepreneur tells Vault.com, adding: "Also, inevitably in business, some yahoo tells you he's going to sue you, and you learn how groundless such a threat usually is."

~ As with practicing attorneys, would-be entrepreneurs currently enrolled in law school should think about focusing on certain areas, notably courses in corporate finance, securities law, accounting, tax, advanced contracts, intellectual property, and anything related to venture financing.  If possible, specialists highly recommend taking business school classes in areas such as marketing, entrepreneurial management, and strategy.  Finally, 1Ls thinking about becoming entrepreneurs should consider spending their first-year summer working at a start-up or a small business, particularly in departments such as business development, where a law background is desirable.