New practice areas propel Eden Prairie law firm through recession

  • Article by: TODD NELSON , Special to the Star Tribune
  • Updated: February 24, 2013 - 10:41 AM

Fafinski Mark & Johnson, a business law firm in Eden Prairie, added and expanded specialties to counter the economic downturn.

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Robert Fafinski Jr., CEO and president of Fafinski Mark & Johnson, and his co-founders left a larger firm to start their Eden Prairie commercial law practice.

Photo: JOEL KOYAMA, Star Tribune

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Robert Fafinski Jr. sensed trouble ahead, even as business soared at Fafinski Mark & Johnson, an Eden Prairie business law firm perhaps best known for its commercial aviation practice.

Fafinski, president and CEO of the firm he co-founded in 1999, launched a strategy that would come to include investing in new practice areas and new people while cutting pay for himself and other partners to avoid layoffs.

The maneuvers ultimately guided the firm through the recession and positioned it for the growth it continues to enjoy, unlike practices that shrank or closed their doors when economic turbulence hit.

“In the mid-2000s, it felt like we worked around the clock month after month after month,” Fafinski said. “But in the back of my mind, I knew this wasn’t going to last forever. You’ve got to think not about what’s hot right now but what’s likely to be hot when things turn. You’ve always got to be thinking ahead.”

To that end, Fafinski and his partners brought in an experienced bankruptcy group to represent creditors in what would become a booming business for the firm. Fafinski also foresaw growth in estate planning and brought in a lawyer experienced in that practice who has been busy working with clients in the affluent southwestern metro suburbs.

The firm also bulked up its employment practice, adding expertise in noncompete agreements, an area in which the firm now is litigating cases across the country, as well as in employee stock ownership plans and employee benefits. The partners’ pay cuts lasted through 2009 and into 2010.

Less is more

“Everybody here as partners made less money, but we kept everybody employed,” Fafinski said. “When the economy did come back in 2010 for us, we probably took off faster than most firms because we had the team ready to go. We’ve ended up getting rewarded for our patience.”

Fafinski Mark & Johnson added four lawyers last year, raising its total to 29 among a total staff of 49. Fafinski said he expects to hire up to a dozen more attorneys over the next five years. Revenue rose 25 percent last year and is expected to increase again this year.

Before starting their firm, Fafinski and co-founders Donald Chance Mark Jr. and Kevin Johnson had worked at larger ones. Their model, summarized in the tagline “the power of the big, the spirit of the small,” means clients get lawyers with big-firm experience at a lower cost.

The partners keep costs lower by working in a suburban building with free parking, operating without debt and not overpaying new lawyers, he said. The firm’s starting salary for new graduates is $80,000, compared to $110,000 and up at bigger firms.

Work for the firm’s commercial aviation group, which has eight lawyers, had rebounded as the economy has recovered, Fafinski said. The aviation group is one of few in the country with expertise in representing airlines and leasing companies in transactions involving commercial aircraft, tracing its origins to work Fafinski did early in his career for Sun Country Airlines, where he now is a board member.

Northern Tool & Equipment chose the firm after a competitive bidding process, said Tom Erickson, senior vice president and chief financial officer. Last year, the firm assisted Northern Tool in its $215 million purchase of the Sportsman’s Guide and the Golf Warehouse. “When we did some due diligence on it, Fafinski came in well ahead of everybody that we talked to,” Erickson said. “We liked the size of the firm. It wasn’t big but it had big clients and impressive attorneys.’’

Peter Taunton, president and CEO of Chanhassen-based Snap Fitness, said he has “no reason at all to ever look for another law firm” after working with Fafinski Mark & Johnson for the past six years.

“They deliver a high-quality product and they’re very mindful of the time and cost they pass on to clients,” Taunton said.

The expert says: Neil Hamilton, professor of law and director of the Holloran Center for Ethical Leadership in the Professions at the University of St. Thomas School of Law, said Fafinski’s entrepreneurial approach helps him identify with business clients. Fafinski, whose firm has endowed a student award at the St. Thomas College of Law, was a student of Hamilton’s when both were at the William Mitchell College of Law.

“The leadership at the Fafinski firm always tries to put themselves in the entrepreneurial client’s shoes and work from there to help the client be successful at a fair price,” Hamilton said.

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