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For the money
LAW by Jean Gruss | Editor/Lee-Collier
REVIEW SUMMARY
Industry. Law
Firm. Morgan & Morgan
Key. A big-city law firm sees success after spending millions of dollars to recruit top lawyers and win new business.
Large personal-injury firms have mostly stayed away from smaller, more conservative areas of Southwest Florida. Not Morgan & Morgan, which hired top corporate lawyers, including Florida Lt. Gov. Jeffery Kottkamp.
Five years ago, John Morgan had just paid $1 million of television airtime in Fort Myers to advertise his law firm's personal-injury services.
From Tampa to Naples, you can't miss Morgan's "for the people" ads. They're everywhere.
While Morgan was well established in Orlando and Tampa, he gambled that Southwest Florida would be a lucrative market despite its much smaller size.
But for the first three months, Morgan's team couldn't find a good personal injury, medical malpractice or worker's compensation case. "We got calls, but not one case," Morgan recalls. "I started to think that maybe it wasn't such a good idea."
Morgan had been warned by other attorneys not to bother with Southwest Florida. Conservative juries and well-funded industry lawyers kept most out-of-town firms, well, out of town.
But Morgan quickly created a buzz in Fort Myers legal circles by hiring some of the best corporate lawyers in town, including Joe Linnehan and Brian Vigness from the Tampa-based firm Fowler White, and Daniel Sheppard and Michael Reese from Henderson Franklin, a local firm with impeccable credentials representing corporate clients.
Morgan also scored a coup by hiring Jeffery Kottkamp from Henderson Franklin. Kottkamp was a Republican state legislator representing Cape Coral when he joined Morgan's firm and is now Florida's lieutenant governor. He resigned from the firm when he was elected last year. Although Morgan calls himself a "passionate Democrat," he says he supported Republican Gov. Charlie Crist and raised money for his campaign.
Although it's impossible to independently determine market share or verify the firm's success, Morgan handles 300 to 350 new cases a year in Southwest Florida. "We had a couple million-dollar verdicts and many million-dollar settlements," Morgan boasts. The Fort Myers office delivers about 17% of the firm's $90 million Florida annual revenues. "The office is very profitable," he says.
What's more, the firm runs all its class-action lawsuits through the Fort Myers office where attorney Scott Weinstein is involved in massive cases such as the General Electric's recall of thousands of refrigerators and the recent Peter Pan peanut butter salmonella contamination case.
The success in Fort Myers encouraged Morgan to open offices in other small towns, including recently in Jackson, Miss. The next Florida office to open will be Sarasota next year, he says.
Small-town expansion
Morgan, 51, and his wife, Ultima Morgan, started their firm in Orlando in 1988 with three attorneys, two case managers and a receptionist. Today, the firm employs more than 100 attorneys and 600 support staff.
Morgan stuck to the big cities as he grew the firm, including Tampa and Atlanta. That's because they were big television markets and TV advertising is how Morgan generates new business.
When he first considered Southwest Florida, Morgan says other attorneys warned him the market was too small and the verdicts weren't generous. "I felt the opposite," Morgan recalls. "I felt it was one of the few areas of the state that lacked quality trial lawyers."
By contrast, Morgan won't venture to West Palm Beach because there are too many good personal-injury attorneys there.
Then, about five years ago, Morgan attorney James Kelleher agreed to open the Fort Myers office and together they began to recruit some of the most polished corporate lawyers in town.
"The insurance industry is well aware of who can try cases," Morgan says. "If you have marginal lawyers, all of your dominoes can fall really quickly."
Morgan hired attorneys who were skilled in defending insurance companies and their clients from personal-injury lawyers like Morgan, reasoning that they know how to squeeze more money out of their opponents during settlement negotiations. "You know what to put in the letter to get that extra," says Brian Vigness, the firm's co-managing partner in Fort Myers.
Only 5% of the cases go to trial, though Morgan says one key to success is to be prepared to go to trial. "Most lawyers are scared to death to try and they're scared to death to lose," he says. "And they're lazy."
When he was recruiting them, Morgan told the attorneys they could double or triple their salaries. "They get 25% of what the firm grosses," Morgan says. What's more, Morgan promised a more satisfying experience without the burden of billable hours - the bane of every attorney. "They don't have to answer to some jackass at an insurance company," Morgan says.
Morgan brushes off any concern that an attorney might be sealing the fate of his career in corporate defense work by switching to personal-injury law. "Great lawyers can always go back and get the same old job somewhere else," Morgan says.
"Here, when you do a good job, you get a hug," says Vigness. "With an insurance company, you get a 10% cut off your bill." What's more, he says, corporate lawyers live in constant fear that they'll lose insurance clients even if they do a good job. "There's not much loyalty," he says.
When Morgan recruited Kottkamp, the Cape Coral Republican was in line to become majority leader in the Florida House of Representatives. "We just hit it off as friends," Morgan says.
But Morgan says he was shocked when Kottkamp became Crist's running mate. "I never thought this would happen," he says. The election forced Kottkamp to resign from Morgan & Morgan, though Kottkamp is still listed as an attorney (without a photo) on Morgan's Web site, Forthepeople.com. His biography on the site makes no mention of his current status as the lieutenant governor.
Besides recruiting some of the top lawyers from Fowler White and Henderson Franklin, Morgan brought in others as well. That included luring Craig Stevens, the managing partner of Miami's George Hartz Lundeen law firm to handle the medical malpractice cases in Southwest Florida.
Morgan & Morgan now has 13 attorneys in Fort Myers and Vigness says it'll grow to 20 in the next two years. "I probably have received 100 other resumes from Fort Myers and Naples because of the fun we're having and the success we're having," Morgan says.
Slow business at first
Some of the Morgan victories in Southwest Florida have included $1 million for the death of a 30-year-old father of four children who was killed in his car by an out-of-control dump truck and $700,000 for the death of a 15-year-old girl with undiagnosed diabetic ketoacidosis, a life-threatening complication of untreated diabetes.
But Morgan's first year in Southwest Florida wasn't easy.
Despite the million-dollar advertising blitz when Morgan opened the Fort Myers office in 2002, business was slow at first. "Advertising is only half the battle," says Vigness. Just as important is word of mouth, he says.
Because every personal-injury firm uses the standard Florida Bar-sanctioned contingency compensation scheme, it's hard to compete on price. Under that standard, a firm retains one-third of the awards if it settles a claim before a lawsuit is filed and 40% after a suit has been filed. More than half the claims are settled before a lawsuit is filed, Vigness says.
Over time, as Morgan's lawyers started winning cases, the firm began to gather more clients in Southwest Florida. "It took us about three years to go from in the red to in the black," Morgan says. About 20% of the firm's business is from people of Hispanic origin, he says.
Morgan isn't letting up. The firm spends about $2 million a year in advertising in Southwest Florida out of a total budget of $22 million. "You can come in with a little bit of money and saturate a place quickly," Morgan says of the Fort Myers-Naples market. "I'm probably sure the people of Southwest Florida have seen enough of me."
Morgan is confident that Southwest Florida's growth will place it in the top 50 television markets in the country within five years. "The pie just gets bigger," he says. "There is so much money and growth."
Jury Duty
Picking a good jury is arguably the most important part of a trial. That's why personal-injury firm Morgan & Morgan has three lawyers who specialize in picking juries.
That relieves the firm's other lawyers from having to worry about picking the jury and lets them focus on the case they will present.
Initially, firm founder John Morgan had some trepidation about Southwest Florida's conservative residents but has since been pleased with the verdicts, especially in Lee County. "There's ways to kick the tort reformers off," he says.
Still, Brian Vigness, the co-managing partner of the Fort Myers office, says Collier County juries tend to be more conservative than Lee County juries. Out of 25 potential jurors, there's nearly always a retired CEO.
But even in Collier County, working-class people sometimes bear hidden grudges against their wealthy employers and that comes through in a trial. Naples claims to have the highest concentration of retired Fortune 500 CEOs in the country.
Vigness cautions that in some cases it's easier to pick a jury in Collier, especially when someone has caused harm because they were driving drunk or committed a similar offense. By contrast, it's much harder to win a medical malpractice suit in Collier because juries are more friendly towards doctors.
Charlotte County juries are closer to Lee than Collier and Hendry County cases are neither conservative nor liberal. "Everybody knows everybody out there," Vigness says, noting that it can be hard to empanel a jury in Hendry because of that.
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