When Is a Law Firm Not a Law Firm?

Tweet

Yet Johnson has already begun to tinker with the nature of VLG's practice, positioning the firm to be a big player in the upcoming Internet company Garage.com, which he's launching with former Apple Computer Inc. heavyweight Guy Kawasaki. (See "Anatomy of a VLG Start-up," below.) Johnson says he's also intrigued by the idea of building up some capital to expand VLG, rather than cashing out the business every quarter. "If there's money on the table, there's always pressure to distribute it," he says. "But I would love to be part of a business where we had $5 million in the business to build it the way we want it to be built."

And Johnson does have ambitious plans for expansion. VLG is now poised to pursue his dream even further. He has begun to ponder something controversial and potentially groundbreaking: making VLG the first law firm ever to go public. In fact, Johnson points out, VLG structured itself from the outset to allow for that possibility--although at the moment, many obstacles, including the lawyers' professional code of conduct, prevent law firms from going public. Johnson is reluctant to discuss any details of his plan, but the mere fact that he is thinking about it demonstrates the breadth of the firm's ambition and its skill at eschewing traditional labels and limitations. As Yahoo! founder Yang puts it, even in a community known for offbeat and groundbreaking ideas, VLG still manages to stand out as "a new kind of firm."

D. M. Osborne is a former senior reporter for The American Lawyer and is a contributor to the soon-to-be-launched magazine Content.

Anatomy of a VLG Start-up

Guy Kawasaki sat down for lunch with lawyer Craig Johnson last September, eager to talk about his latest brainstorm. Kawasaki, the former Apple Computer director of software product management, sketched out his vision for a series of snazzy Web sites about hot cities like Kuala Lumpur and London. But Johnson, who knew that Web sites supported by advertisers were notoriously iffy, was less than enamored with the concept.

Instead, Johnson steered his client in another direction. The lawyer started describing his idea for an alternative to the ad hoc, word-of-mouth network that most entrepreneurs rely on. Johnson envisioned a system that would work like an elite matchmaking agency. A venture like this needed a Silicon Valley celebrity at the helm, Johnson explained, and Kawasaki--who had made his name as one of Apple's more visible evangelists--would be ideal. By the end of lunch Kawasaki had changed plans.

Beginning this month, the 43-year-old Kawasaki will be headlining the two-part introduction of Garage.com, a Web-based venture that will introduce carefully screened entrepreneurs to venture capital. (The name refers to the humble birthplace of companies like Apple and Hewlett-Packard.) The main feature will be a password-protected area called "Heaven" (which will be on-line at the end of the summer), where investors can check out the business plans of Silicon Valley high-tech start-ups.

CEO Kawasaki says Johnson wielded his "platinum Rolodex" to attract the right people to the project. The lawyer helped recruit Web-site sponsors Silicon Valley Bank and Coopers & Lybrand, as well as some high-profile directors, including Silicon Valley Bank president John Dean. (Johnson will sit on the board, too.) Johnson also took steps to register the venture, which will start off with about a dozen employees, with the Securities and Exchange Commission as a broker-dealer.

A few Web sites, such as the Small Business Administration's Angel Capital Electronic Network, already expose entrepreneurs to potential investors. But Johnson claims that most of these sites simply act as bulletin boards and don't add much value.

"Garage.com will be quite selective," Johnson says, estimating that only a few dozen plans at a time will be on display in Heaven. Finalists will be chosen by professional screeners from Coopers & Lybrand, a few Garage.com staffers, and outside industry specialists. "If you want to interest serious angels, you can't have them wading through hundreds of plans," says Johnson.

How will Garage.com make money? Along with charging investors for access to the site, it will take a 3% to 4% cut of the financing it arranges. But the payoff lies in equity. Garage.com will take stock in each venture it helps finance. And in the VLG tradition, Johnson will participate in the action through his equity stake in Garage.com. -- Susan Beck

 PREV  1 | 2 | 3 | 4 | 5 

Read more:

Sign-up for our Leadership and Managing Newsletter

Email Address: