About five years ago, Michael Best set out to expand its presence beyond the Midwest. The 173-year-old firm had a strong position and lots of clients in the region but, according to Milwaukee-based firm managing partner David Krutz, they were “getting worried about conflicts.”
The firm looked for growth markets where it had some clients and could compete for talent. Denver was among the cities that fit the bill, due in large part to its growing tech scene, as were emerging industry hotspots Salt Lake City, Austin and Raleigh, North Carolina. Washington, D.C., also made the cut as a center for intellectual property and regulatory practice.
“These are centers of technology and centers of emerging business and allow us to really bring our model beyond the Midwest to these new markets,” Krutz said.
But the expansion is “not a game of takeaway” meant to supplant existing law firms, Krutz said. Instead, the firm has played to its advantages, including its competitive rates and fixed-fee services.
“We found that we could compete for talent in terms of our rates are not the highest,” Krutz said. “We promote to our middle market clients that we don’t have the highest rates because we’re not based on the West Coast or the East Coast where you need to support the machine, if you will. We’re a lot more flexible than that.”
According to Krutz, the firm established a foothold in Colorado in 2017, when a few of the firm’s attorneys relocated to Denver from the Midwest. In 2018, the firm brought on a group of attorneys from Modus Law, a Boulder-based firm focused on start-ups. Modus Law founder Shawn Stigler now serves as managing partner for Michael Best’s Denver and Broomfield offices.
“That really kick-started it because Shawn came to us with that great market niche of emerging business, serial entrepreneurs [and] the technology play for both the venture capitalists and private equity,” Krutz said.
Michael Best now has about 20 attorneys in its Colorado offices, and “ideal growth would be 30 to 50 within the next two years,” Krutz said. The firm has grown at a similar speed in Utah, where it had eight attorneys in 2014 and now exceeds 30.
While the firm’s growth plans were slowed down by COVID-19, Krutz said, “it really didn’t stop.” There was a slowdown during the first two or three months of the pandemic, he said, but the firm later saw a “very good rise” in emerging business, intellectual property and transactional work.
Earlier this month, the firm’s “Venture Best” practice was recognized as a leader in venture capital transactions in Pitchbook’s annual Global League Tables, which tally deal counts for a given region or category. The practice group, which is co-chaired by Colorado managing partner Stigler, ranked third for deals in the Mountain region, first in the Great Lakes region and 11th globally based on 2020 deals.
“I think it validates our thought that we could play this market niche, especially in areas like Denver, but also nationally,” Krutz said. “There’s a tremendous need for firms who are not charging at the very top of the hourly rates but still give you A1 service and also work with your clients directly with relatively small teams.”
According to Krutz, the fact that the firm doesn’t rely on international business and had already adopted pandemic-friendly practices such as flexible work schedules and office hoteling has helped it survive largely unscathed during COVID. The firm’s ability to offer a full range of services at competitive rates also helped it hold on to business during uncertain times, he added.
“We did very well. But part of that was our clients don’t look at us as just the added expenditure that they can cut,” Krutz said. “We were helping them through their tough times.”
He expects the firm’s growth in Denver to stay on track due to the continued flow of talent, start-ups, incubators and capital from California and elsewhere to Colorado. Denver’s proximity to outdoor attractions and less dense living quarters is likely to be an even bigger pull post-pandemic, Krutz predicted, as more people might seek an exurban or rural lifestyle.
The firm plans to play off its strength in advising entrepreneurial clients from the start-up stage through their exit strategy, Krutz said. It will increase collaboration with affiliates such as Michael Best Strategies, a business consulting and government relations firm, and Best Workplace Solutions, a human resources consulting service, to provide comprehensive advice.
“That part of it is where we’ve made some investment in the past few years, and it’s really paid off because we see the collaboration between the lawyers and those consultants,” Krutz said. “We are bringing to the client the right expertise, which is sometimes legal, and sometimes it’s the business and the marketplace.”