Finding a balance: Indy firm built on 1-principal business model

It all began when his son got sick. Suddenly, the pressure of being both a devoted father and productive lawyer became too much, and Indianapolis attorney Tony Paganelli discovered he wasn’t performing at his best in either role.

Though Paganelli loved his work, he also valued time spent with his family, time that became even more important as he and his wife and son traveled the country, searching for answers to his son’s illness. So in 2013, Paganelli resigned as a partner at Taft Stettinius & Hollister LLP and moved his practice into the spare bedroom of his house, hoping to find a temporary solution to his need for a balance between making a living and caring for his son.

Today, Paganelli’s son is healthy and his temporary fix has become the hallmark of his business plan for the Paganelli Law Group. Paganelli leads his firm as the only principal, removing the pressure of running a law firm from the other attorneys and instead enabling them to have the same work-life balance he was seeking four years ago.

“I’ve tried to create something where people can spread their wings and really do their own thing,” Paganelli said.

The firm has gone from just him to nine other attorneys using a business model that he described as like that of a Silicon Valley startup.

When he realized it was time to expand, Paganelli said he wanted to create a firm environment that would allow his attorneys to do the work they love without the pressure of meeting billable hour requirements or the internal competition to become a partner.

He set up a system in which billable hours are a goal, not a requirement. The advisory goal is 1,440 hours, and there are incentives in place for attorneys who exceed that goal. However, the incentives stop at 1,700 hours because Paganelli said he doesn’t want his employees to devote too much time to work.

Business development also is incentivized, and the firm’s attorneys, many of whom came to Paganelli from larger firms, often use their large-firm connections to get new client referrals. But when 5 p.m. rolls around, Paganelli said he reminds his employees that it’s time to go home.

Gibson

Like Paganelli, Raegan Gibson said she found it difficult to strike a balance between being a mother and a productive attorney at her previous law firm. Though she enjoyed working there, Gibson also said the demands of a large-firm practice didn’t fit in well with her desires to spend more time with her children.

Gibson had previously spoken with Paganelli about his family-oriented law firm, so she decided to make the switch to his firm. Now, coming to work feels easy because she said she knows she’ll be able to do her job without the bureaucracy of a large-firm culture, while also getting to spend ample time with her children in the evenings.

Gibson’s story is not uncommon, as the conversation about work-life balance in the legal profession has grown louder in recent years. Beth Woods, managing director in the Chicago office of legal recruiting company Major Lindsey & Africa, said flexible, informal work arrangements are becoming more common as attorneys have begun to speak up about their desire to have a life outside of work.

Wanting a healthy work-life balance does not mean an attorney doesn’t want to work hard, Woods said, but instead indicates that every attorney has a specific situation that could create a need for a non-traditional work schedule.

For example, an attorney might want to work standard office hours, yet also be home in time to pick their children up from school and feed them dinner. In that situation, a firm could allow the attorney to log back into work once their children are settled for the evening, enabling them to get work done on their own time, Woods said.

In another instance, she said a work-life balance could mean allowing an attorney to bill only 1,600 hours versus 2,000, a system employed by Indianapolis firm DeLaney & DeLaney.

When her firm interviews a potential new employee, Kathleen DeLaney said she asks them up front about how many hours they want to work. From there, DeLaney said she builds their salary based on their desired number of hours, allowing the attorneys to make as much money as they want while also considering other demands that might hold their attention in their personal life.

Grass

Though Paganelli attorney Stephanie Grass does not have children, she said she enjoys spending time with other family members in the area, and the firm’s work schedule allows her to do so. Additionally, Grass enjoys traveling, and she can thanks to the Paganelli system.

In Indianapolis, Paganelli’s one-principal system is a unique business model, but Lewis Wagner LLP senior partner John Trimble said he knows of firms in Michigan and Illinois that take similar approaches. Technology is the common thread that runs through all alternative firm structures and work arrangements, Trimble said, as attorneys can now complete tasks on an iPad or other similar device that previously would have only been completed on an office desktop computer.

Paganelli embraces technology at his firm, employing a paperless model in which all data is stored in the cloud. That way, attorneys who can’t make it into the office can telework and complete tasks for their clients and address any issues outside of the office. Further, Paganelli said he gives his employees access to high-functioning technology to ensure they can work as efficiently as possible.

When he first began to expand his firm, Paganelli said he did not expect it to grow as large as it has. He credits his success to his emphasis on a healthy work-life balance and, from an entrepreneurial standpoint, on his ability to predict the needs of the legal market.

Specifically, Paganelli said his North Meridian Street office enables Indianapolis clients to receive large-firm quality work without having to drive downtown to meet with their attorney. Further, Gibson and Grass both said the collaborative relationships the Paganelli attorneys have with each other and with other attorneys help them provide high-quality work to their clients.

But Paganelli knows that the market can be fickle. He keeps a BlackBerry on his desk and uses it as a paperweight to remind him that even the most popular items or businesses can become obsolete.

Looking to the future, he plans to stop his firm’s expansion once he has a team of 15 attorneys, a cap he said is necessary if he wants to maintain his one-principal model. Though that model is unique right now, Paganelli’s approach to running a firm reflects an overall trend in the legal profession that is likely here to stay, Trimble said.

“I think what Tony is doing is completely consistent with the move that is sweeping the country, of lawyers of all ages and all walks of life who want to have an interesting, fulfilling legal career and decent money and good benefits,” he said. “They want to have flexibility without having the responsibilities of running a firm.”•