Leader Q and A: McLane's McCluskey grew firm in a bad economy
Michael McCluskey, CEO of McLane, Graf, Raulerson & Middleton, in Manchester on Thursday. (Thomas Roy/Union Leader)
McCluskey started with New England Telephone and Telegraph, and spent 26 years with the company as it morphed into NYNEX and ultimately Verizon, serving as president and CEO for the New Hampshire division of the telecommunications giant when he was recruited by McLane.
With the firm embarking on a new, three-year strategic plan, he felt the time was right to step down and set the stage for new management with new ideas. He's actively involved in the selection of his successor, with a transition expected at some point in the next two months.
Q. Is it common for non-lawyers to be chief executives of a law firm?
A. This firm was a little unique. Most firms had a managing partner. But the idea of having somebody who doesn't come from the traditional law firm was not a new concept here. It's getting more common in the industry. When I came in, people said, "We're good lawyers, but that doesn't necessarily mean we're good business people."
McLane always had good attorneys, and they were always recognized in the community as being highly involved, but at that point in time they were in the middle of the pack relative to earnings, and now I would say when we look at benchmark studies that we started doing 10 or 12 years ago, we're at the top of our market. So you can be good lawyers and make some money, too.
Q. What is the source of that growth?
A. A few things have changed in the legal industry. When I started there wasn't as much of a role for marketing and business development. People had a mind-set that, "If you're a good lawyer, they're going to come to you." But you have to get your message out that you're a good lawyer. A year after I got here, we hired the first business development director.
I think we've been able to distinguish ourselves to some extent by being specialized as a business law firm, which includes taxes, intellectual property and the litigation that surrounds it. We also are highly regarded in trust and estates. We do a lot of estate planning for CEOs and CFOs, and I think that helps transition business to us. You can't be everything to everybody, so you have pick the places you are going to play in and develop depth and specialization.
Q. Why the expansion into Boston?
A. When we entered the Boston market four years ago, the economy wasn't great. But surprisingly the down economy created an opportunity where I think people were willing to consider someone else - to say to themselves, "Instead of paying $850 an hour to get a partner, I can pay less than half that." Where we are is free parking, and the Middlesex County Courthouse is across the parking garage from us.
We decided that if we served Middlesex and Essex counties, that would open up a market of 2.3 million people. New Hampshire has 1.3 million in the whole state. The challenge is to convince the customers that just because you charge half as much as they do in downtown Boston, that doesn't mean you are half as good.
Q. Is there a glut of attorneys?
A. There is. There are very talented kids coming out of law school who are having a hard time finding a job. No different from anyone else, but they're also coming with those extra years of debt. They've invested a lot of money in their education, and they are having a hard time. Because the growth has not been as robust, it's tough even for our younger attorneys to have the opportunities as fast as they may have had 10 years ago for them to develop their skill sets.
There's an oversupply, and people know what the rates can be when they're coming at you, and they'll try to negotiate a hard price.
When I started, you had probably more demand than you had numbers of lawyers. Now, you probably have a surplus of lawyers to meet the demand. So clients are pushing back on rates. Before, you could regularly increase your rates every year. Not so much any more.
Q. You ended 2012 by announcing the opening of a lobbying subsidiary.
A. We've recently expanded in that area, quite substantially, I think. We hadn't been traditionally very big in that area. We always had a focus on dealing with government agencies for permitting and that kind of thing, and we did some lobbying, but recently we hired two individuals who came in at a pretty high level - Joel Maiola, who had been Judd Gregg's chief of staff when Gregg was governor and U.S. senator, and Rich Sigel, who was chief of staff for Gov. Jeanne Shaheen as well as Gov. John Lynch.
The interesting thing is that often people have lobbyists, but their connections are either with the Democratic or Republican side. Here we've got one who's a Republican and one who's a Democrat, and they get along very well. That just started in December - McLane GPS, government and political strategies.
Q. What's the vision for the future?
A. We're just starting a three-year strategic plan. I think McLane will continue to be New Hampshire-based, but I think the Massachusetts office is going to continue to grow. McLane is at about 90 attorneys. My guess, because I've been saying this for a while and no one has pushed back, is that we'll grow to about 125 attorneys. And the reason for that is not growth just for the sake of growth. You want to have enough depth so that when clients are leaving bigger firms, that if they come to McLane, we have enough subject expertise to handle their complicated matters.
Q. What about Mike McCluskey?
A. I plan to do something else, but I don't know what yet. Right now I am spending most of my time trying to find the right person to take my place.
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