Marashlian & Donahue, LLC: The Wrong Place at the Right Time.
Telecom lawyer Jonathan Marashlian insists it wasn’t a blinding flash of insight that let him foresee the major business and economic changes coming that would rock the legal profession – a full 10 years before many of his brethren even realized their world had changed.
Despite founding a law firm in 2005 with what, at the time, was a radical idea about how to deliver and price legal services, Marashlian laughs off the suggestion that he was prescient. Instead, he chalks his insight up to being in the wrong place at the right time.
“I was a young attorney at a firm that lost its largest client and shrunk from more than two dozen lawyers to a handful in a very short time,” the founding partner of Marashlian & Donahue, LLC, states from his fourth floor office in a six-storey building in McLean, Virginia, just off the toll road that runs from Washington DC to Dulles Airport.
“Out of desperation and fear, I saw what didn’t work,” says Marashlian.
Marashlian concluded that lawyers dealing with the rapidly expanding and changing telecom industry needed a totally different business model than a traditional law firm could offer. While some client matters are highly sophisticated and complex, much of telecom’s regulatory and corporate compliance work is routine, but carries stiff penalties if the company makes even a small, technical mistake in federal and state filings. Yet lawyer’s at large firms – even many boutiques – were charging $300-to-$500 per hour or more to complete standard forms for clients.
So, he created a new kind of law firm.
“I wanted to build an organization that could cater to hundreds, even thousands, of diverse clients,” Marashlian recalls.
Along with going after industry giants, he says, “From the outset, we provided services to smaller companies and new entrants to the marketplace, companies that might otherwise shy away from lawyers due to the legal profession’s well-earned reputation as being out of touch with the financial constraints of most small clients.”
Marashlian states that he sought out companies who may have never used a law firm before. The reason was pure economics: “If you don’t serve them now, when they grow, every firm will be going after their business.”
His firm began by doing regulatory and corporate compliance work, files handed traditionally to first-to-third year associates in large firms. He claims it is really a “pseudo legal service” in that consultants also do the same type of filings. But Marashlian says even a low-cost law firm has trouble competing with consultants because lawyers cannot disclaim responsibility for the work – something consultants do routinely.
“The disclaimers of liability are right in their consulting agreements,” states Marashlian. “Without the fear of being held responsible for their work product, many low-cost consulting firms churn out regulatory, corporate and transaction tax filings that carry significant legal and financial consequences without sufficient care” he insists.
Marashlian explains there’s a great deal of “garbage in, garbage out” occurring in the outsourced compliance cottage industry that caters to the heavily regulated and taxed communications industry.
In 2007, Marashlian set off to create a superior alternative. He embarked on a journey that led to the birth of The Commpliance Group, a consulting firm that delivers compliance services for affordable and predictable rates, but with the additional attributes required of any consulting business serving the highly complex and rapidly evolving communications sector, attributes including strict quality control, awareness and sensitivity to delicate issues (and their consequences), and willingness to put the reputational capital of his entre organization on the line in order to back up their consulting services work product.
“We provide rates and fixed-fee pricing arrangements that are on par with what most consulting firms charge,” Marashlian insists, “but because our consultants are educated, trained and influenced by the experience of the lawyers at The CommLaw Group, and because the work performed by The Commpliance Group is backed by the reputation of the law firm and its attorneys, we provide clients with real peace of mind that other consulting firms simply cannot deliver.”
Moreover, Marashlian explains, “when the consulting firm encounters the occasional sensitive, high risk, high consequence issue that requires an experienced telecom attorney, The Commpliance Group adheres to an escalation and referral process that ensures such matters are not glossed over or ignored.”
Even though he says that many clients have never used a law firm previously, it is not simply start-ups and smaller businesses that see the value in using a law firm and its affiliated consulting firm.
The chief executive of a regional exchange carrier agrees, noting the “legal counsel and business guidance are at rates far more competitive than any of the other numerous lawyers that I work with.”
He notes that even large companies have become unwilling to pay lawyers to do this kind of work. But consulting-only firms in the sector will not give the assurance that publicly-traded corporations require.
“In terms of our consulting work, we occupy a unique niche by straddling the line between where a consultant falls short and a typical law firm is too expensive,” notes Marashlian.
From its inception, Marashlian built his firm more on a corporate model rather than the typical partnership. He says “I am more of a CEO than a managing partner.”
One benefit of such a management approach is that it allowed him to create an Alternative Billing Structure at a time when ABS meant “Anti-lock Braking System” to most lawyers.
So, for more complex matters that telecom companies must deal with on both federal and state levels, Marashlian did something else that was all-but unheard of at the time among lawyers: Fixed fee legal work. Not surprisingly, he put his own twist on the approach, and it marks another significant difference from other firms as they grapple with client demands for more certainty in their legal expenses.
“We set a reasonable estimate for what fees on a project will be,” he explains. “But we also tell clients that if something unexpected arises, we will go back to them at once to explain why the cost will exceed our original estimate.”
Clients like the tactic.
The chief operating officer of a leading virtual system company enthuses, “These … value added services go beyond pure legal advice and make me think of (Marashlian & Donahue) more as a partner.”
“Our approach is to partner with clients,” Marashlian claims. “This allows us to provide boutique firm expertise and small firm attention to consistently deliver big firm results without the big firm fees.”
Marashlian differentiates his firm in another way: He does no lateral partner hiring, instead bringing in young lawyers he can train to deliver quality work and a high-level of service that has become the hallmark of the firm.
“From the beginning of their career, I want our lawyers to understand our cost structure and client service philosophy,” he maintains. “I don’t want someone coming out of a large firm who learned to see the world very differently, from billing practices to, especially, client service.
There is a partnership track in the firm. Michael Donahue became a partner a few years ago and Marashlian says several attorneys are close to being what he calls “partner ready.”
And what enables an associate to reach that level? According to Marashlian, it is doing high quality work and delivering superior client service consistently.
The emphasis on client service is paying off. And both the legal and telecom worlds are starting to take notice, too.
The firm has been named the “Customer Service Law Firm of the Year” in the United States three times, received the 2013 ACQ Law Awards’ “Best Communications Law Firm,” and “Leading Customer Service Law Firm” of the year awards in 2013 and 2014, Lawyer’s World Magazine and InterContinental Finance Magazine’s “Leading Customer Service Law Firm of the Year,” multiple Lexology International “Law Office Client Choice Awards,” and the 2014 Corporate International Magazine Global Award naming it “Telecommunications Law Firm of the Year in Washington, DC.”
As a result, from three lawyers 10 years ago, the firm now has 16 attorneys serving clients in every sector of the industry:
- Traditional landline service providers.
- Providers of Cloud communications, Software as a Service (Saas), Communications as a Service (CaaS) and other software-based communications and collaboration services.
- Broadcasters and Media Distributors.
- Wireless service providers.
- Information and other enhanced communications providers.
- Broadband and Internet Access providers.
- App services and developers.
- All forms of internet-based services including VoIP and other hybrid and convergent service providers.
- Communications equipment manufacturers.
- Business consumers of communications services.
But Marashlian isn’t resting on his laurels, instead saying, “I keep trying to anticipate where the market is moving.”
He is silent on where he thinks that might be. But if history is any guide, whatever his next move chances are the rest of the profession will start thinking about the same issues around 2025.