John Charnon, law firm planning
Image: Jason Doiy
When Mark Oium decided in 2000 to split from O'Connor, Cohn, Dillon & Barr and start his own shop, the defense-side personal injury litigator had his book of business, and he had his employees. But when it came to law firm management, the San Francisco attorney didn't have a clue.
"Having been a liberal arts major, and a lawyer for 23 years, I really didn't have any business experience," he said. "That was the daunting task."
Then a colleague recommended John Charnon: law firm administrator. An accountant by trade, Charnon has spent the last two decades offering a unique service exclusively to small-firm lawyers, who say it can be invaluable.
Within about a month, Charnon took care of "everything," Oium said, helping buy appropriate billing and accounting software, steering him toward medical and malpractice insurance agents and finding pension, profit-sharing and investment managers.
"He's really the one-stop shopping center for somebody who's thinking about going into the law firm business," Oium said. "He's made my life very easy and profitable."
Charnon's hands-on approach plays well with his target clientele -- seasoned lawyers with an established book of business who don't have time for administrative hassles. The firms Charnon works with employ no more than 10 lawyers.
But his service has a price tag that can be prohibitive for startups. Charnon says full service for a typical three-lawyer office might require anywhere from 120 to 170 hours. At an hourly rate of about $120, that would cost $20,400 at the higher end.
Felicia Vallera, who opened her own corporate practice seven years ago in San Francisco without assistance, said the majority of solo practitioners in the area are young lawyers without steady business.
"Most people I know who have gone solo or opened a small practice could not afford consultants," she said. "To a brand-new solo just starting out with no book of business, that's a fortune."
Still, those who opted for the help say it was a worthwhile investment. Charnon continues to do monthly profit-loss statements for Oium, Reyen & Pryor, which opened in San Francisco in 2001. Oium said the cost averages from a monthly low of $600 to a high of $1,100 during tax season.
"It's one of the few invoices that I never question and I never mind paying," he said.
NO FRILLS
Clients describe Charnon as understated. The 68-year-old drives a 1989 special model BMW, but relies on public transportation when he's making his weekly visit to check on the financial health of San Rafael, Calif.-based Vasquez & Estrada, his largest client. Every Wednesday, Charnon, who lives in the Russian Hill part of San Francisco, hops on bus No. 70 at Van Ness Avenue heading toward Novato, Calif.
His office at 220 Montgomery St. also reflects his no-nonsense style. With just a few of his own paintings adorning the walls, it is a sparsely furnished square space with several printers, a computer and a copier, a Sharp calculator -- into which he taps figures while talking about how much it would take to open a basic solo practitioner office -- and a black stereo playing soothing New Age music at low volume.
Charnon says that in a busy year, he will open three new offices, and in between he visits the firms for which he continues to handle finances. But opening offices isn't all Charnon does. He also helps lawyers move to new offices and doles out partner compensation advice, and, when partnerships grow sour, Charnon helps close their firms. One of his favorite projects is making space plans -- using skills he picked up in architecture school -- and buying furniture for law firms that have expanded.
According to clients, one of the most important services Charnon provides is a profit-and-loss projection for a year, based on billing rates, hours and collections. Then he can say whether a stand-alone practice is sustainable. Charnon said that lawyers with no book of business have come to him but on seeing the financial projections changed their minds about opening their own firm.
"A lot of times people don't realize how much it costs to run a business from month to month," he said.
Charnon relies on a network of small-business vendors to handle the tasks that he can't perform himself. For instance, he has a list of banks that will offer an unsecured line of credit for startups that don't have a lot of money on the table.
SMALL WORLD
Charnon developed his appreciation for small business as a teenager working in his father's shoe store in Wisconsin.
"Tony, my father, bless his soul, was a master at making a little bit of resource go a long, long way," Charnon said. "He was a saver and a recycler. That's what a small business has to do."
Charnon worked for more than a decade first as an auditor and later as financial controller before going back to graduate school to earn a master's in architectural design. In the mid-1980s, after a few different jobs, he landed a financial controller post at San Francisco law firm Hassard, Bonnington, Rogers & Huber. It was a pivotal point in his career. By 1986, he opened his first law firm, at the request of a disgruntled senior partner at Hassard Bonnington.
"Everything after that was a referral," Charnon said, adding that since then, it has been easy to specialize in law.
Charnon doesn't expect any slowdowns. The calls have been rolling in steadily over the past 20 years, he said, in good economic times and bad. Charnon said he expects more potential clients to come out of the aging baby boomer population, as firms close and seasoned partners decide to strike out on their own.
Michael Estrada, the managing partner at Vasquez & Estrada, which opened in 2001, said his firm started with four attorneys. Now the insurance defense firm employs 25. Estrada said the firm has become the fifth largest in the North Bay area of San Francisco and broke into the top 500 Hispanic-owned businesses in the country.
"And no small part of that is attributable to [Charnon]," Estrada added. "He really helped us get where we are."
