Starting a Commercial Real Estate Business
Interview with Stephen Furnari, Founder of Law Firm Suites
Stephen Furnari created Law Firm Suites to help other entrepreneurs make the most out of their small law practices. Learn more about Law Firm Suites and pick up great tips for all entrprenuers.
Stephen Furnari started Law Firm Suites in 2007 in New York City.
Tell me about your current business. What are you doing exactly?
Law Firm Suites is New York City's leading provider of professional office space to solo attorneys and small law firms. Law Firm Suites is a community of attorneys designed specifically to help lawyers:
- Convert rent into revenues by increasing strategic referrals;
- Reduce malpractice risk by leveraging other tenants expertise; and
- Build better client relationships by making good referrals to other legal experts.
How did you come up with your business idea?
I was sharing an office suite with other law firms and realized that I was receiving (and giving) enough in referrals to pay a few multiples of my rent expense. I required more office space for my growing practice and wanted to see if I could increase the referrals to my practice in order to offset costs. I also wanted to help other solo attorneys and small firm lawyers make the challenge of being an entrepreneurial lawyer a little bit easier.
The experiment took off, proving to be a viable business in its own right. Despite the economy, we have tripled our business in two years.
Did you write a business plan? Was it an effective tool for you?
I did not write a formal business plan, but did have a written strategy for sales, marketing and operations, and did a complete financial analysis.
Who did you hire to help you?
My law firm handled our legal, and YES, you should have an attorney if you get into this kind of business (or any business). I had an accountant who handles taxes, my wife does our bookkeeping. We hired web developers, copy writers, graphic artists for branding, an interior designer and technology people to handle phones and data connections.
What other outside resources were helpful for you?
I was taking T. Harv Eker's (the author of the book "Secrets of the Millionaire Mind") weekend course Millionaire Mind Intensive. The course gave me three days away from my law practice and life to think creatively about business and money. I literally came up with this business idea and outlined my strategy in that seminar.
Beyond that, I am a big believer in Michael Gerber's book "E-myth Revisited", and run the business like a franchise. It's a must read for any entrepreneur whose committed to building a business, as opposed to creating a job for themselves.
Did you operate your business from your home? What were the challenges and benefits to this strategy?
No, and I don't believe in home based businesses. For me, I feel I take myself more seriously when I get up and go to a place of business every day. I don't think you can create a real business working in your pajamas.
Did you have a partner when you started your business?
No, I do not think partnerships work in real estate businesses or investments. People get too emotional about property and end up making bad decisions and puts strain on the partnership. The only partners I would consider in a real estate project are investors who do not make managerial decisions.
Have you hired additional staff? What is your greatest human resources challenge?
Yes, I have three administrative assistants who handle most of the operations of the business. My greatest human resource challenge is getting good people to stay long term. Training a new person takes time, and time is money. To help with training, I try to have duplicate staff so if one leaves, the others can assist in training. I also created manuals with detailed instructions so a new person can perform the job from the first day of employment.
Do you own a business with family members? What do you think are the benefits and challenges to running a family owned business?
My wife helps me manage the financial aspect of the business. The benefit is that I trust her implicitly, and have no worries of theft, etc. The downside is that we tend to talk business a lot when we are home. I don't mind (I could talk business all day), but I think she gets tired of it at times.
With the current economy in a slump, what cost saving tips would you have for a new entrepreneur?
Regardless of the economy, for any new entrepreneur, it's advisable to scale back/downsize their personal expenses to the barest minimum they can stand. It will give them more time to be able to let the business do its thing in the beginning, without the pressure of having to take a salary or owner's draw. In the long run, their life will be better, and they will be more cautious about how they spend money in the future, allowing them to accumulate assets more rapidly.
Have you outsourced any portion of your business? Has that worked for your business?
I have a virtual assistant who helps me with marketing. She's someone I knew professionally from another business, so I was confident in her work ethic. Generally, though, I haven't found outsourcing of administrative tasks to work very well.
We outsource our data and telephone management. Works exceptionally well.
Finding employees to work in a new and growing business can be a challenge. How did you find your employees?
Finding employees has not been a problem, keeping the good ones has been an entirely different story. For admin staff, I post ads on Craigslist. I get 300+ resumes within a few hours and I use a system to slim down the resumes down to 15 prospects, for which we interview about 10.
Temporary labor can be a great asset to an entrepreneur. Have you ever hired temps or contractors? Would you suggest this as a strategy for new business owners?
We use temps all the time. Instead of hiring a bigger staff, I use temps to fill in if my receptionist is out. We have a checklist, instructions and protocol for temps. This has worked out great for us. I think this strategy could work well for other business owners, but you pay a premium over the cost of an employee, and it pays to be very organized so the temp doesn't waste any time.
What have you done that has been very effective in helping to grow the business?
We make a lot of effort to give our clients a lot of value for what they pay for. This allows us to offer clients a vibrant community and the possibility of growing your law practice by converting rent into referral revenue, rather than merely being a commodity of rental office space that's purely an expense.
How has your experience in running the business been different from what you expected?
I found that running this business was more enjoyable than practicing law. While I still enjoy running my law practice from a business perspective, I have handed off most of the day-to-day legal work to my partners and staff.
Is there anything you wish you had done differently?
No. I'm a big believer in entrepreneurialism, and Law Firm Suites plays an important role in helping other self-employed lawyers remain entrepreneurs. I really believe that the Law Firm Suites model is the future for solo and small law firm practice. I'm really enjoying this business.
What advice would you give to somebody else who wanted to start a similar business?
Have a plan, but be ready to adapt to changing market conditions. Know your limitations in terms of when to "cut the cord" on the project if it isn't working out, and how to measure success so you don't give up too soon. Expect some scary, sleepless night before things get better.
I've had a few of those nights myself, Stephen! Thank you for taking the time to share your story with us at Gaebler.com.
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