SI Review: July 2011

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Center Stage

It’s in the Niches

An entrepreneurial culture helps grow this firm

By Subadhra R. Sriram

Lawyer’s Staffing Inc., a legal services provider, is featured in this month’s Center Stage. The 10-person company is headquartered in Richmond, Va., with branches in Virginia and North Carolina. We interviewed Steve Barley, president and owner of the firm, to talk about legal staffing and the mission of Lawyer’s Staffing.

Q: Why did you choose legal staffing as a specialty?

A: We’ve been in business since 1997. And in the late ’90s, legal staffing was a completely wide-open niche. I had sold another (finance & accounting staffing) firm that I had been involved with and was looking for a new niche to start up, and legal really stood out as an area where there was room for a firm to have an impact.

Q: What sets your firm apart from other legal staffing firms?

A: I think it’s our entrepreneurial culture. We really encourage our people to run their niches as small businesses. We have developed a lot of niches, and our people are responsible for their niche. They generate revenue and they manage their own expenses and try to make money.

Q: What do you mean that you developed a lot of niches?

A: We try to be flexible enough to serve every potential client within the legal industry, so we work with large national law firms. We also work with one-person firms. We work with large and small corporations. We work with local and state government clients. And within each of those we might be providing attorneys, we might be providing paralegals or support staff. We might be supplying temps and permanent hires. But we treat each niche differently. The one-man firm’s requirements are unique and quite different from what a large national firm needs.

Q: Do you think that takes away from the quality of the worker because you’re trying to handle supplying every kind of legal worker?

A: Not at all. We just have to do a better job. And that’s what the entrepreneurial culture generates — people wanting to do the best possible job. So we think of it as entrepreneurial collaboration with the focus being on solving the client’s staffing problem.

Q: What do you provide in terms of innovation?

A: Entrepreneurial collaboration is certainly one of the things that I would say that we’re innovative in. The other thing is the identification of niches. We want to be able to provide service to any prospective client within the legal field, and we found the best way to do that is to identify niches and then develop a program for providing service in those niches. So we might have somebody that goes out and does nothing but try to develop business with small law firms, and we have a set of strategies for working with those firms that enable us to give them good service, but enables us to make money at the same time.

Q: How do you do that? Margins can be fairly low in the staffing business.

A: They certainly have gotten lower in the last few years, but it still is a professional niche and once those clients see what we’re going to produce for them, they don’t really have any trouble being willing to pay good margins to us.

Q: So let’s talk about what you produce.

A: The quality of the people and the burden is really on us to do a good job. What’s going to differentiate us from our competitors in most cases is that we really dig in and understand what they’re looking for and do a good job. The people that are recruiters here are all people that have legal backgrounds so they understand what it’s like, what someone needs when they ask for a paralegal with a particular set of skills and experience, or a contract attorney who can work on a particular kind of case or can be involved in a particular issue in a discovery. So we have people who understand those needs. Our recruiters are all former attorneys or former legal professionals of some sort.

Q: How has the economy affected firms like yours?

A: I think it’s affected ours in the same way that it’s affected the legal industry. Basically the decline of top-line revenues and the need to adjust to be profitable at lower levels of revenue. I look at our numbers: In 2006, we did almost $6 million in sales and we thought we were going to the moon. By 2009, we were down to about $3.5 million. In 2010 we were at about $5 million, and this year, we’re [on track] to do $8 million to $9 million in sales. Yet we’ve reduced our staff. In 2006 we had 15 people producing that $6 million in sales. Now we have 10. So, just like many of our law firm clients, we’ve made adjustments internally and used technology so that we can make more money with less people. In effect, we’ve reduced our cost and become more profitable.

Q: And what do you think the future looks like in general for you as well as for legal staffing firms?

A: I think for firms that are flexible and able to adjust to the changing business model within the legal field, the future is good. There’s plenty of growth potential if you’re able to adjust, but you’ve got to really work to find ways to add value. You’ve got to be identified as someone who’s a problem solver. And with that in mind you’ll be able to stay profitable. But the issue is really how to stay profitable at lower levels of volume. The legal industry has done that in the last three years. They didn’t want to do it but they had to.

Q: Working lean and working smart using technology?

A: Yes. Technology helps a lot and we’ve seen that with our law firm clients as well. Many of them have significantly upgraded their technology and relied less on support staff. They have also cut back on the number of attorneys that they need. They’ve enabled people to do more with the resources that they have.

Q: What would you say is your single biggest challenge?

A: Growing the top line while controlling expenses, in particular unemployment expenses, and expenses associated with government regulations. We’re getting hammered with state unemployment [taxes], as I guess are most staffing firms. Particularly, we might get a big project. We might staff literally hundreds of people for 30 or 60 days and as those projects end, those workers start filing for unemployment. So we’ve either got to get them back on assignments or we’ve got to suffer the cost associated with those unemployment expenses.

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