Jim Kaplan and Bill Zeena had none of the basics needed to run an office when they told Wilson Elser Moskowitz Edelman & Dicker of their plans to open a new firm in a few months.

Abruptly, the Miami attorneys were told it was their last day, and their long-range plans were instantly compressed.

"We were willing to stay up to three months, if the firm chose to keep us," Zeena said. "After we told them what our intentions were they made the decision that it wasn't in their best interest to have us there that long. We started with no office space, no phones, no computers and no guarantees that our clients would decide to transfer the work to us."

In retrospect, both attorneys said the decision to open Kaplan Zeena last September was worth it, even though the prospect of being on their own after years of working in a large firm was stressful at first. They worked quickly, using cell phones to snag the essentials -- subleased space at One Biscayne Tower in Miami, a phone system, computers and office furniture.

Over the course of three days, other Wilson Elser partners and associates agreed to make the leap with them. The firm now has five partners and seven associates, all formerly with Wilson Elser.

"It's been very rewarding," Zeena said. "The first month was challenging. We were starting from scratch, but every month it gets easier."

Not only did the pair not have any of the things necessary to launch a firm, such as office equipment and computers, they also had to call clients quickly to inform them of their departure, create a payroll for the firm's new employees and find and negotiate a lease for office space.

"There were a number of things we had to do in a very short period of time," Zeena said. "There were very long days, a lot of stress. Eventually, we had a to-do list, and we kept knocking things off of it one day at a time."

For many lawyers, the comfort of being in a large firm with many practice areas allows them to effectively serve the varying needs of large, highly sophisticated clients. But lately, a string of partners -- including some top rainmakers -- have left the south Florida offices of large firms to start their own shops.

One unanticipated hitch is the quickly deteriorating economy. With inflationary pressures, Kaplan said, "salaries are higher, rents are higher, everything from office supplies to insurance -- all of those areas have experienced some upward fluctuation, and the price of oil doesn't help. It, certainly, is a challenging environment in which to do business."

But Kaplan Zeena also sees an upside in a down economy with more lawsuits and more protracted litigation, which is a good thing for them.

"In a slowing economy, cash is king and people are more willing to pay legal fees to contest a potential liability than they are to make a significant payment in order to resolve the matter," Kaplan said.

The prospect of launching a firm in a soft economy presents its own set of challenges. But Alcides Avila, who led a startup by six Holland & Knight partners last August, said he wasn't worried about the financial side of the new business.

"The concerns about the economy had absolutely nothing to do with our decision," he said. "We were confident the type of work we did, the type of specializations we would have in a boutique firm, were not the type that would have been affected by the economy."

Avila said the firm, Avila Rodriguez Hernandez Mena & Ferri, is focused on the perennially strong practice areas of litigation and immigration, but he also said the firm's corporate and financial institutions practice is also thriving.

Dwight Hill, executive vice president of BNY Mellon, said it's difficult to gauge the impact a slowing economy is having on new law firms. But he noted the slowdown has not lowered office lease rates, particularly in downtown Miami, with its tight supply. Hill works almost exclusively with law firms.

"You cannot generalize about the impact of a downturn in the economy," he said. "Each attorney needs to evaluate their own situation. There are opportunities in up markets and down markets."

DESTINY IN YOUR OWN HANDS

Working in a big-firm environment has its perks. But for some, the ability to control their own destiny has a strong attraction.

Kaplan and Zeena are both former managing partners in their former firm's Miami office. Like other groups of lawyers who, recently, left larger firms, they said they found themselves limited in practice growth because of client conflicts of interest and philosophical differences with firm managers about how to grow.

"My own personal interests and the firm's interests were not nearly as perfectly aligned as they once were," Kaplan said. "It led to conflicts in terms of business that had to be turned down. There were differences in terms of their idea of the business model and the kinds of work we wanted to do."

The pair wanted to narrow their practice to securities arbitration and litigation; litigation in insurance coverage, construction defect, employment, discrimination claims and bad faith disputes; and malpractice defense for attorneys, accountants and insurance brokers.

"We're five months into this experiment, and it seems to be working out very well," Kaplan said.

Zeena, who was designated managing partner at Wilson Elser's Miami office last summer, said he wanted to focus more on his practice and less on the administrative tasks that position required. Kaplan is managing the new firm.

But most partners who leave large firms to start their own often face more management and administrative work -- not less.

For litigator Larry Silverman, who left Akerman Senterfitt, it was an easy trade-off to be able to avoid conflicts and get more control of his practice. He departed along with partners Scott Cosgrove and James Sammataro in January to form Silverman Cosgrove & Sammataro.

Silverman attributed his move to a desire to escape client conflicts of interest at the 463-attorney firm. The trio, which primarily performed defense work at Akerman, is now handling a mix of plaintiff and defense work in complex business disputes and entertainment law.

CLIENTS FROM DAY 1

The newly departed say the process of leaving a firm with a healthy book of business is key to the success of a startup. If the lawyers have work to do from Day 1, they can be as profitable at a small firm as they are at a larger firm.

"A well-run boutique firm like a breakaway from a larger firm can be wildly profitable. Their overhead factor is reduced tremendously, there's higher profitability and there's better tax benefits," said Joseph Ankus, a lawyer and executive director of Fort Lauderdale, Fla.-based legal recruiting firm Ankus Consulting.

Avila, who left his post as head of Holland & Knight's banking and finance group, said the launch of Avila Rodriguez benefited from an instant client base.

"We were fortunate in that we have very loyal clients, and we had tremendous client support," he said. "We were very fortunate in that, essentially, all of the clients that we were working with followed."

Past clients of the partners include Ocean Bank, Sony, MasterCard, Marriott International, Spain-based Caja Madrid and Commerce Bank.

Avila's partners include Eugenio Hernandez, former head of Holland's national immigration practice group, and Wilfredo Rodriguez, former chair of Holland's international litigation and arbitration practice. International banking attorney Patricia Hernandez, litigator Daniel Mena and finance attorney Marco Ferri also joined as partners, along with Asnardo Garro, who is a partner in the firm's corporate and financial services group.

Avila also attributed his departure to a desire to have more control over the growth of his practice.

There's "more flexibility in terms of not only the practice but also more flexibility in terms of the billing structures," he said.

Hernandez added that flexibility can include contingency work or monthly retainers. He said as an immigration attorney, he had always billed a flat hourly rate at Holland & Knight, but now he said there's more flexibility.

"Sometimes you felt you were a square peg being put into a round hole," Hernandez said. "The benefit of working with a small group ... is there's not that big of a bureaucracy you have to work with."

Silverman said he also has the ability to be more flexible in fee arrangements by offering clients a mixture of hourly and contingency fees, but the process of leaving a firm with clients in tow is a delicate proposition.

"You don't want to betray trust at a firm and, quote, 'steal clients,' " he said. "You want your old firm to be happy, and you want your clients to be happy. ... If it was a close call and it would hurt someone who was still there, I wouldn't want to take that client away from them."

In Kaplan and Zeena's case, they left the same day and informed clients of their departure. A few hours after Kaplan and Zeena told their old firm of their intention to leave, they had a powwow to hash out the details of how to launch their new commercial litigation shop.

"After we left having no place to go, we went to Perricone's and set up shop at a table and, over some coffee and lunch, decided what we'd try to accomplish," Kaplan said. "We went back, made some lists and started to phone people later that day, the next day, and, over the course of the next week, contacted most of the clients we worked for and notified them we left the firm. They had a choice to stay on with Wilson Elser or move with us, and the vast majority" made the move.

E. Stratton Horres, managing partner of New York-based Wilson Elser's southern region, said the firm is recruiting to replace the departed lawyers. It has been approached by lawyers interested in joining the firm and will be announcing new hires soon.

"We've been very busy since the day the other guys left, whom we wish well, [but] we're moving on," he said. "It's giving us the opportunity to grow the office in many ways."

Ricardo Cata, managing partner of Wilson Elser's Miami office, said the firm understands Kaplan's and Zeena's reasons for leaving the firm.

"I saw it as a business decision they made," he said. "Conflict is probably one of them [reasons]. We are a big firm -- we have a lot of offices, lawyers and clients. Conflict is an issue from time to time. They made a decision based on what they felt was best for them and the people who went with them."

Adolfo Jimenez, recruiting partner in Holland & Knight's Miami office, acknowledged the departure of Avila's group had an impact on the firm. In response, the firm hired some replacements and moved some attorneys internally to shore up the most affected areas. Partner Jose Sirven was named to replace Avila at the head of the banking and finance practice, and the firm recently hired Brian Garcia, the former head of immigration at Akerman Senterfitt, as a partner in the firm's international transactions group.

"The first thing we did was evaluate, No. 1, what does it mean as far as the capabilities of the firm," Jimenez said. "Were they in any way affected? Do we have depth in certain areas? Do we need to shore up other areas? How do we meet continuing client needs?"

The most important thing was to communicate with clients and ensure their needs are served and the transition is smooth, Jimenez said.

"They did a great job at reaching out and promoting communication trying to ensure the trust wasn't broken between the law firm and them," Jimenez said.

Despite the loss of such a strong team, Jimenez said the departures were amicable, and Holland continues to work with Avila Rodriguez lawyers on various matters.

Many successful spin-off firms have strong litigation practices. Avila's firm has litigation and arbitration practices as well as corporate transactions and financial services practices.

The firm also is beginning to focus on real estate despite the slowdown, with the addition this year of a new partner, Maggie Barreto-Tercilla, a former associate general counsel at Florida International University.

"Wherever there are problems, there are also opportunities," Avila said. "We represent foreign banks whose clients are non-U.S. investors who perceive opportunities and are to some extent insulated" from an economic downturn.

DEALING WITH STARTUP COSTS

Mellon's Hill said a new firm needs other things besides ready clients. Typically, expenses mount during a lag time between a firm's opening and the arrival of the first checks from clients.

"Every attorney can tell you they know how well their clients pay them," Hill said. "Some pay quickly, and some pay slowly. You can have 120 to 180 days of overhead before you get paid."

Startup costs can range from $25,000 to $2 million. If a law firm meets a bank's lending standards, a bank can provide the financial tools to get started, he said. Options include loans, lines of credit and credit cards.

Silverman said he and his partners haven't used any bank financing to launch their firm.

"For us it was savings and capital contributions," he said. "You want to have two months of full-blown operating expenses in hand before you start."

Other lawyers from top law firms have successfully left to start their own practices and weathered economic downturns. Take the international litigation and arbitration boutique Astigarraga Davis.

Founding partners Jose Astigarraga, Greg Grossman, Ed Mullins and Edward H. Davis Jr. left the former Steel Hector & Davis in 2000 as Y2K fears were just starting to dissipate and the dot-com bust set in. The firm thrived during the economic downturn after the 2001 terrorist attacks and has grown to 20 lawyers.

Davis, who left Steel Hector before Astigarraga, Grossman and Mullins, said their move was motivated not because they weren't doing well but because they wanted to do better.

"Honestly, at the time we left, the firm [Steel Hector] was doing quite well," Davis said. "In a sense it was financial in that we thought we could do better. Our experience for all four of us was a positive one at Steel Hector. We wanted to have a more positive experience."

And the experience of starting a firm usually brings with it flexibility and control but also management and administrative duties.

Silverman said it's been a balancing act to juggle the demands of managing his new firm compared with practicing at a large firm. "You have to learn to limit yourself to what you're good at and then delegate," he said.

"You never know what's going to happen next. At a big firm you generally know what's going to happen next [in your practice], and if you don't know it will be something within your expertise. I have cases that may explode, but [now] the copier machine may explode. It adds a new wrinkle to the process."

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