Two floors below the gleaming law office of Foley & Lardner, lies a work space called Catapult, where dozens of young people sit at tables and tap away at computers. Foley is an established 161-year-old law firm, with 900 attorneys in 21 cities. Catapult is a two-year-old startup incubator furnished with spartan block-shaped chairs donated by a sponsor. The two entities represent a contrast in cultures, yet they are connected by more than the elevators that rise and fall within the 35-story downtown Chicago skyscraper, at 321 North Clark Street, that they occupy. Together, Foley and Catapult are launching emerging companies.
“There’s a long-standing feeling that lawyers and entrepreneurs are like oil and water,” says Thomas Morsch, Clinical Professor of Law at the Small Business Opportunity Center, Northwestern University School of Law, in an interview with the Kauffman Institute — a foundation devoted to entrepreneurship. “Lawyers look backwards and say no, and entrepreneurs look forward and say yes.”
In the summer of 2011, two enterprising Foley partners — Galen Mason and Christopher Cain — convinced their firm to say “yes” to the idea of launching an incubator which would be populated by a handful of new companies with high-growth potential. Mason says they began brewing the idea in 2009 when, like many other firms hit by the great recession, the partners began looking for other ways of expanding their client base to bring in additional revenue.
“Foley came out of the economic downturn. We hadn’t grown to where we thought, or we had even shrunk a little bit,” says Mason. “[But], inspiration [came at] the right time, right place. Groupon was going through some meteoric success here in Chicago, and we had attorneys very interested in that.”
For more than a century, the Midwest-based firm had offered a myriad of services to traditional businesses. The next logical step was to offer services, capital, and working space, to emerging companies dabbling in various sectors.
“There’s so much opportunity here [in Chicago], and a lot of the big West Coast firms are not here, so what we’ve started really makes Foley very unique,” says Christopher Cain, Catapult co-founder. “A lot of large laws firms would like to do work for startups but it’s really too cost-prohibitive. We’re very blessed that the management has been very supportive in, not only funding Catapult, but, allowing us to do the deferred fee packages, and the other things, that give us the flexibility that most other larger law firms can’t do, or won’t do.”
In May, TechStars Chicago, the local affiliate of TechStars — considered by many entrepreneurs and investors to be the premier startup accelerator worldwide — named Foley as its premium law firm sponsor in 2013 and 2014. Mason, Cain, and another partner, Lisa Conmy, lead Foley’s entrepreneurship team. Conmy brings startup expertise and West Coast connections, gleaned from working at the Silicon Valley law firm, Gunderson Dettmer, and from working with Foley colleagues at the Boston office.
“At Foley, we can use our matchmaker system. [When] there’s a great client here in Chicago, we can use our partners on both coasts to say, ‘put this in front of one of your great VCs,'” says Conmy. “I see so much promise in what’s been developing here, in the past 18 months. I’ve been back in Chicago for nine years and I can tell you that I was not doing this kind of work nine years ago. Now, there’s an event every night and you can see what’s happening within the startup community.”
Cain says that giving advice to an emerging company differs greatly from counseling a large firm. The small startups, he says, need a lot of help. Yet, he cautions against offering too much legal advice preferring, instead, to spend time getting to know founders and their companies.
“The best lawyers spend a lot of time, investment time, in understanding their client,” says Cain. “And, if you understand your client, and understand their business, what you hopefully become is a trusted advisor so they call you for everything.”
In our video interview with Mason, Cain, and Conmy, we learn more about the dynamic, but mutually dependent, relationship between the attorneys and their entrepreneur clients. ❒
