Beginning in the early 1990s, R. Craig Scott, then a Newport Beach labor and employment lawyer at the five-person firm of Scott & Whitehead, began to notice an increasing number of executives coming through his door. They were either leaving their current positions, starting a new position, or facing challenges in their present circumstances.

For example, says Scott, "A client would come to me and say, 'I want to leave this company and go out on my own, start competing with my current company. Please take a look at my exit agreement for me: it has this nonsolicitation clause. Can I legally go after the customers I've been dealing with in the past?'" Traditionally, there have been lawyers for management and lawyers for employees, but there has been no place to turn for an executive looking for help with his own employment situation. Word got out that Scott was willing to help them. By 1998, there were so many executives moving from company to company that Scott had gradually developed a specialty in what he calls "executive law." Eighty percent of his time was occupied with executives. The firm of Scott & Whitehead acted as an incubator for his new Web-based legal practice, Executive Law Group, launched in July.

Scott says it is easy to see how this new specialty grew out of the digital economy. According to Execunet, an online resource for executives, the demand for general management has increased 49 percent during the first three quarters of 2000 alone. And not only has there been incredible growth in the number of executives, but the execs are moving from established economy jobs to dot.coms and back out again. Scott has seen some clients as many as three times in 18 months. He has one client who's been back six times, coming and going from one job to another. In the past, this movement didn't exist; an executive stayed with the company for life. In addition, Scott says, according to the Wall Street Journal, the number of executives who have employment contracts is going up. "People are seeing a need for the protection of an employment contract and, within it, provision for their exit."

Executive Law Group doesn't function like a traditional law practice. In fact, the lawyers don't meet 90 percent of their clients. Instead the firm relies heavily on the Internet to keep costs low and speed up the pace of work. Scott asked Clarence Carter, vice president of marketing and business development, to set up the firm's marketing tools, oversee the Web site (www.execlaw.com), and develop strategies for building a network of contract attorneys, first throughout California and then throughout the nation. In addition, Carter has become an operations manager dealing with attorneys and clients. A client will communicate with Carter before he ever talks to an attorney. He takes down their information, determines what type of client they are and sets up a billing structure. Only after that does a client come in contact with a lawyer for legal advice.

The firm uses the Internet several ways. It is a marketing tool. It is a communications device because people apply to become clients through the Web site and the network of contract attorneys is administered through the Internet. Finally, the Internet is a vehicle to move documents and comments, to interface with clients.

"It's also the way we get paid," says Scott. Executive Law Group operates exclusively on a credit card basis. "Of course we're willing to meet with the clients, but a face-to-face meeting is much more expensive than using phones, faxes and email. With the use of technology, communication is not only cheaper, but much more efficient. It's not that we care any less, but we work very quickly. Most of our clients need us to move fast. We can't say, 'Let me look at my calendar and we'll meet three weeks from now."

Carter adds that, because of the executives' expertise with the Internet, the technological aspects of the business have gone incredibly smoothly. "The reason it's gone so well is that our executives really appreciate the value of high-tech communication. It's what they're used to, and they find it easy. For the most part, we're not having to go to court for these guys. They don't want to sue. They want to get along with the company and move forward." In the typical case, there are three steps involved in using Executive Law Group's services. The executive applies to become a client online, then forwards an employment or severance document for legal review, and, lastly, receives a one-hour telephone consultation with an attorney. The firm's flat fee for these services is around $750.00.

As far as Scott knows, his is the only law firm that focuses exclusively on executives. Besides the five employees in its Orange County office, Executive Law Group works with 30-35 contract attorneys up and down California and in 21 states. Currently, they are well-established in the Northeast, Florida and Texas. Scott says the next area of expansion will be the Pacific Northwest. Because of all the dot.com movement, Executive Law Group wants to be wherever the high-tech industry is a force.

Executive Law Group trains all attorneys who want to become part of their network. Some of their contract attorneys have been recruited and trained by the firm, had their backgrounds checked, and are now ready for assignments. Others are currently working their way through training. "We feel there's a right way and a wrong way to practice this type of law, and we've learned some valuable techniques. We will not send assignments out to anyone who hasn't gone through our training."

Executive Law Group also wants to recruit a certain type of lawyer. They look for "handholding lawyers," who are able to respond sympathetically and empathetically to an executive's story, and give him the security that he's going to be helped. "Some of these people have never been through transition before," says Scott, "and they really need to know that you're with them, helping them, and will see them through the process. Not every lawyer can do that, and it's a skill we look for when we recruit."

Twenty percent of Executive Law Group's clients find them online; the rest are referred to them by outplacement services and executive search firms. For example, an outplacement firm has an executive wondering whether she should sign a separation agreement. She asks the firm if they can advise her on this. "No," they may answer, "you need a lawyer for that. And we can refer you to one." The firm also gets referrals from other lawyers who know about their expertise in the area.

Scott began his career working for large firms but quickly saw the advantages of thinking small. "I was excited when we started our own firm in 1993; we could offer first-rate services at a lower billing rate than a big firm. We saw a market, and we were able to seize it." Scott sees the same thing happening in his new venture. "There is no one serving this market niche. It's exciting to be creating something new."

Scott and Carter agree that the greatest challenge they face is letting people know they're out there. "We believe we have services needed by every executive who moves, and by most executives just facing challenges," says Scott. "At this point, we're not even a choice in the legal directory. There are labor lawyers and management lawyers, but no executive lawyers."

Carter agrees. "Our greatest challenge is to easily describe the value proposition of our services. To have them look not at our fee, but at the big picture." Scott explains: "I represented an executive who was leaving, and asked me to review his package. He already had a job lined up. One of the elements in his exit package was outplacement services. I said, "You already have a job. See if you can turn those outplacement dollars into a cash payment. Since you won't be using the outplacement services, ask the company to give you the $20,000 instead. I coached him on what to say, and the company agreed. My bill to him was $750. So on that one item, he gained nearly $20,000. I live with these agreements every minute of the day, and I have lots of ideas on how to help executives get the most out of them." 

OCM - Elizabeth Lund

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