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Tim Damschroder - Building a Thriving Practice in Tough Economic Times

By Michael G. Cummings

Mr. Cummings is Managing Director of SAGE PDI, Inc., a firm that trains and coaches attorneys to market, sell, network and manage relationships. He is the co-author of Best Practices in Legal Marketing and Best Practices in Building Your Personal Network - for Attorneys. He can be reached at mcummings@sageprofessional.com or 630-572-4798. For more information, see www.sagelawmarketing.com.


Most attorneys have been facing a tough economy over the past two years. As a result, we have seen many top law firms shrink dramatically, laying off partners and associates as work has dried up in key sectors.  

In light of the economy, it is truly a buyer’s market for legal services. Clients who need to do more with reduced legal budgets are pressuring firms to reduce rates and scrutinizing their legal expenditures for a clear ROI. Lending is down and capital is scarce – so the flow of business from mergers and acquisitions as well as other corporate transactions is also down.

These dire economic trends may spell doom and gloom for attorneys who are passive, overly dependent on a few clients, reside in declining practice areas, or are reliant on other partners to feed them business. However, entrepreneurial attorneys and firms find a way to identify and capitalize on the profitable niches and emerging opportunities that always exist – even in the toughest of times. Our 2010 corporate rainmaker of the year, Tim Damschroder of Detroit-based Bodman LLP, exemplifies this spirit of pro-activity and entrepreneurialism that all attorneys should emulate.

As tough as times have been for the nation broadly, they have been even tougher, and for a longer period of time, in Michigan. Yet, Tim, who practices in Bodman’s Ann Arbor office, has built a consistently successful practice that has sustained its growth year after year. What is Tim’s blueprint for success and what lessons can we learn from it?

First, here is some background. Tim has a broad-based corporate practice, advising clients in matters involving mergers and acquisitions, corporate finance, general business, corporate governance, securities offerings and tax.  He has developed a reputation as a “get the deal done” attorney who closes deals efficiently and effectively. [For more detail on his practice and examples of his client work, see the end of the article].

As the examples show, the first aspect of Tim’s success is that he drives an extensive mix of work from multiple client segments. He has worked with startups, growing companies and established companies. And he has a unique value proposition for each these different segments. Let’s start first with the established companies he has recently landed.

Serving as an Outside General Counsel

“Bodman is known for doing extremely high quality work with direct, hands-on partner involvement. Since we are based in Michigan, our rates are more reasonable that the AmLaw 100 firms that are headquartered in New York, Chicago or Washington. So we are constantly on the hunt for Michigan companies that are using these higher priced firms.”

Tim successfully employed Bodman’s value proposition to land Key Plastics, a $400 million-plus global enterprise that provides a full range of engineering, program management and production services to the automotive industry. Their customer list includes most auto manufacturers and Tier One suppliers in both North America and Europe.

Tim noted, “We started to do some work for Key 10 months ago and proved our ability to match or exceed big firm quality at a fraction of the price. This past January, their CEO told us that he wanted Bodman to take on an active role in their business. We now serve as their outside general counsel, reviewing contracts, dealing with employment issues, and helping them to buy companies. By having resources dedicated to the client and working on site, we have identified many recurring legal needs and areas where they had been underserved. Over time, we have become part of their team.

“One critical aspect of getting to this point was proving our ability to handle work that was international in scope. Though we don’t have foreign offices, we have good relationships with top law firms in many countries and are very effective at managing their work on our client’s behalf so that the client does not need to worry about that aspect of their business. We have plugged them into our worldwide service network and have handled their international legal needs without the complexity and overhead of maintaining our own offices overseas.”

“Our relationship,” he added, “has evolved to the point that we have negotiated a monthly flat-fee based billing arrangement with their CEO that delivers more value than their previous law firm relationships.”

Serving Clients Outside of Michigan

“I have a strong relationship with a number of venture capital firms,” said Tim. “These firms value our expertise in working with high tech companies. From this we are often asked to service portfolio companies outside of Michigan. For example, we have been recently working with a software company in California and pharmaceutical spin off in Florida.

“You would think that it might be a bit tougher to serve these clients when you are not physically there. But, most of their needs can be served remotely and these companies are comfortable in working remotely with their business partners and suppliers.

“Typical work for these clients includes items such as manufacturing agreements, establishing a VAR network, and protecting their intellectual capital, all of which we can do remotely.

“I have found that these clients value our track record, our team’s in-depth experience in their business issues, and our relationships with their funding sources. Plus, we have been successful at building and maintaining relationship with these clients through a combination of frequent electronic communications and periodic personal visits.”

Working with Start Ups and Growing Companies

Of course, Tim did not start out representing established companies with worldwide operations. He built his skills and reputation in large part by serving startups and growing companies. Being a lifelong resident of Ann Arbor and located near the University of Michigan’s main campus, Tim is positioned in a fertile area for this type of work.

“Our office is in the heart of Ann Arbor a high technology hot spot,” he said. “Early on several partners in the Ann Arbor office built strong relationships with business incubation groups like Ann Arbor SPARK and the technology transfer office at the university.

“Startups appreciate the ‘Bodman way’ of doing business – this involves being cost conscious and streamlined in the way we serve them. For example, we put together a starter kit that packages the key nuts and bolts services they need, including incorporation, employment contracts, options, etc.

“In addition, I work to train these clients on how to be entrepreneurs and how to wisely purchase legal services. They don’t need to use 5 hours of our time to answer basic questions. Instead we have to stay connected with their business so they use us only in the most critical situations.”

As Tim’s practice has grown and he has taken on a larger role representing established businesses, he has lessened his focus on startups. However, he continues to employ the lessons he learned in representing fledgling entrepreneurial businesses – providing cost-conscious, streamlined, and client-focused service – in all client relationships, whether large or small.

Maintaining the Network of a Mover and Shaker

“When I first joined Bodman in 1995,” Tim recalled, “I worked closely with Mark Griffin, a senior partner who was a brilliant rainmaker. He stressed that I should focus on building a professional reputation in our community right way and continue doing it and to let clients know that I planned to be here to serve them for a long time.”

Tim started out serving on ABA committees and became active in the Michigan state bar business law section, eventually becoming chair. Then, he targeted high level business and charitable organizations where he could develop relationships with “ideal” clients. He regularly reevaluates his outside activities, concentrating on those where he can do the most good while broadening his network of relationships.

He said, “I recently identified the local Red Cross as a charity I’d like to support that also has a great mix of local business leaders on its board. Through my contacts in the business community I was able to meet with the decision makers at the local chapter which then led to them inviting me to join their board.

“Nurturing my network continues to pay off and I make it a top priority. For example, I recently saw that a law school classmate joined a top automotive supplier as in-house counsel. I called her to congratulate her and learned that she was put in charge of reviewing their law firm relationships. I told her of the cost savings possible in working with Bodman and she immediately set up a meeting with her general counsel.”

Give Back to the Firm by Taking on a Leadership Position

By now, you may be getting the impression that Tim is a pretty busy guy. Yet, when firm leadership asked him to chair Bodman’s marketing committee, he agreed to take on this new responsibility.

“The firm’s chairman asked me to take this position,” he said. “Since business development is vital to our firm’s success and I enjoy working with my partners on business development projects, I agreed to serve.

“Teamwork is one of our core values at Bodman and we are good at it. We jump on projects and help each other out. Business development should also be a team effort. We have been successful at forming pursuit teams for high priority industries and clients and actively developing strategies to motivate partners to become even better team players.”

Bodman’s marketing committee has been particularly active over the past two years, coordinating the formation of the client and industry teams, undertaking a total revamp of the Bodman Web site, and producing a biennial firm report. Both the new Web site and the biennial report won their respective categories in February at the LMA-Midwest Your Honor Awards.

“Looking forward,” Tim added, “our next major project is implementing an ERM system, which will be underway by May. We are also in the process of expanding our use of client satisfaction surveys and providing more high-level client workshops on emerging issues.”

The Bottom Line: Simplify, Commit, and Market the Firm

Reflecting on Tim’s story, three big lessons jump out.

First, Tim has made a clear decision to simplify his business development focus. He streamlines the way he serves his clients, finds the leverage points where he can involve fellow partners, and handles deals with an intense business focus, closing transactions quickly and efficiently without overlawyering them, all components of what he calls the “Bodman way” of doing business.

Second, he follows the advice of his mentor, Mark Griffin. As he put it, “I let people know that I am going to be here for a long time – with the same client focus and the same geographic concentration in Ann Arbor and the greater Detroit area. Clients and contacts know where to find me and know what I do. I will also continue to nurture my base of contacts who are similarly committed.”

Third, he markets the true strengths of his firm – emphasizing the hands-on, high-quality, business advisor strengths and fee-conscious service that enable Bodman to thrive despite the tough local economy.

Follow Tim’s lead, even in a downturn, opportunities abound for the entrepreneurial attorney.


Background on Tim Damschroder and His Practice

Tim has a broad-based corporate practice, advising clients in matters involving mergers and acquisitions, corporate finance, general business, corporate governance, securities offerings and tax.

He is also active in matters regarding private equity and venture capital financing, joint ventures, commercial loans, complex business transactions (domestic and international), business formation (corporation, limited liability company and partnership) and corporate governance.  His active involvement with client transactions starts with pre-letter of intent negotiations and continues through to final closing. 

Tim has worked with hi-tech companies from start up, to transactions involving intellectual property, to venture capital financing, to eventual sale.  His corporate finance work includes debt and equity financing (private equity, venture capital and angel investments), and derivative transactions including ISDA documentation, master agreements, interest rate swaps, currency swaps and other foreign exchange transactions (FX transactions), and options.

Significant representative matters in which Tim has been active include:

  • He serves as outside general counsel to Grede Holdings, LLC (formerly Citation Corp.) and to Key Plastics, LLC. In this capacity, he handles all merger and acquisition activities for these companies, board of director governance issues, and corporate finance transactions. In many instances, he manages the companies’ other outside law firms, and also manages the non-corporate related needs of the companies.
  • He led a Bodman team that represented Grede Holdings in connection with its simultaneous debt and capital restructuring, combination through a bankruptcy sale with Grede Foundries Inc., and obtaining a new $60 million senior credit facility from Bank of America and Wells/Wachovia. The transactions included the elimination of about $110 million in debt and the infusion of significant new capital from two private equity firms, Wayzata Investors and GSC Group. The new company is expected to generate revenue of $600 million in 2010 and employ 2,700 workers at 14 foundries and 2 machining plants in the U.S.
  • He represented Accuri Cytometers in several venture backed equity transactions totaling $27 million over last several years. Participating venture firms include Fidelity Biosciences, Flagship Ventures, Baird Venture Partners, Arboretum Ventures and Michigan Growth Capital Partners.
  • He negotiated and closed 35 separate corporate finance transactions since June 2006 totaling more than $170 million including seed and follow-on funding, venture capital funding, mezzanine financing, funding from the Michigan Economic Development Corporation (MEDC), raising funds for a private investment entity, and investing in a large institutional fund.
  • He represented Seneca Partners, a private equity, investment banking and merchant banking firm, in the simultaneous purchase of two separate companies, Adesso Solutions and Gelco Trade Management, creating the market’s largest mid-market Trade Promotion Management (TPM) solution providers.
  • He successfully negotiated the sale of Sysware Health Care Systems, Inc., a software company with operations in the U.S. and in India to Eclipsys Corporation, and the sale of Leade Health, a leading health coaching firm, to Ceridian Corporation.
  • He represented a newly formed publishing company in a $30 million purchase of three business units from a public company. His work included assistance with raising the needed capital to fund the transaction. The transaction also included the purchase of a 170,000-square-foot complex located on a 60 acre parcel.
  • He represented a private investment fund in connection with the purchase of a multimedia company with operations in London, New York and Seattle.

© 2010 PBDI/SAGE PDI. This article comes from the April 2010 Issue of ORIGINATE!, the online monthly newsletter (with ongoing support resources) dedicated to helping individual lawyers develop business successfully in order to build their careers. Our February-March 2010 Rainmaker Issue, September 2008 anniversary issue and September 2007 inaugural issue are complimentary; otherwise articles are usually available to subscribers only. Find out more about subscribing at www.pbdi.org/originate.

 

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