Founder Q+A: Luke Malek of Smith+Malek

Photo via smithmalek.com

Luke grew up in Northern Idaho and went to College of Idaho where he got his start in politics. He was student body president, where got to know several Idaho politicians. This ultimately served him well when he wanted to get into politics and law. Prior to going to law school, Luke worked for Larry Craig back in Washington D.C.  

He then worked for former Governor Jim Risch as a Regional Director. This positioned him well to work as a development director in Coeur d’Alene. This foundation paved the way for Luke to eventually go back to law school and start his own firm which he did in 2015. In partnership with Peter Smith, Luke set out to change the world for the better by starting a new type of law firm. 

What galvanized you to create something new? 

"Traditional partner track law firms burn women out disproportionally; it burns women out due to the partner track. There are some real problems with law which we recognized as well. It's not team based; law is centered on billable hours so it's all about having a stack of work on your desk and is not focused on the customer. We had this concept that if we built this team around clients, saying here’s the best person to do the work for you, we’d be able to turn around a higher quality product. We have created something a little bit different which allows folks to succeed and have family balance in life and not compete against each other. We have a client-centered approach to the law and a structure that supports women, parents, and a work live balance."

What is the difference between the traditional partner track model and your profit share model? 

"In a traditional law firm, there are many definitions of partners. Whatever a firm wants to emphasize. It is all about billing as many hours as possible and you are rewarded for the revenue you bring in that way. With us, we said we can be successful if we all set targets and help each other meet our targets. We are really focused on the timeliness of work and the quality of work. If you're not the best person to do it or you don’t have the time to do it right away, give it to a team member who does. If people are focused on their billable hours, it’s focused on incentives that aren’t based on the client. We've been successful in our growth because we’ve encouraged people to help each other and not compete. 

Our profit share system kicks in right away. We let new attorneys get up to speed for six months, then they automatically join our profit share. This helps to align incentives, focuses everyone on our clients, and encourages everyone to be good teammates."

With your model, are they able to grow their equity? How do you manage incoming attorneys and growing shares? 

"Salary is still based on your amount of revenues, and there are still other factors that go into that, as well as the leadership that you take on as well. If you’re overseeing attorneys and helping perpetuate that model, then we’re going to reimburse you for that. There is a tremendous amount of room for growth."

What other unique benefits do you provide? 

"We saw a labor crisis coming a long time ago. Looking at the statistics and saying that there’s an untapped labor market worth billions of dollars that are pushed out of the market, which is largely women but parents in general. There’s always been this struggle for parents; you either feel like you’re succeeding at being a parent and failing at work, or you’re succeeding at work and feeling like you’re not spending enough time with your kids. Also looking at statistics around postpartum depression where the incidence is much higher if the dad goes back to work right after birth, it's things like that. We’ve implemented a really aggressive parental leave policy which includes not only births, but also adoptions, fosters and isn’t only for mothers. We started it at 12 weeks, it’s now at 16 weeks for women who are carrying the child. Because we don’t have a partner track model, there’s no disincentive for staff to take time with their families."

Do you do a lot of work to publicize your model and the associated benefits? 

"I think leading by example is the best way to change. You're so much more impactful by what you do than by what you say. At the end of the day, you still have to communicate it. We do intentionally share what we’re doing because we started the firm back in 2015 because we wanted to change the world for the better. You have to walk the walk before you talk the talk. We’re focused on walking the walk right now. But I do think we’re having an impact in the market as well, because law firms take notice when an associate leaves and has a better quality of life."

When you first started, what were some resources did you use? 

"The unique thing about law is that it’s not super capital intensive. It was just me and Peter in a room when we first started. Our revenue streams were good enough that we didn’t need capital, it probably would have complicated our lives more. I probably would have lived more comfortably in those early days. The one resource that I would say has been absolutely instrumental is the SBDC. I serve on their advisory board now because I believe so strongly in what they do. We still meet monthly with our business coach, and he still cracks our skulls together. It's nice to have someone with an outside perspective. You don’t often get someone with a 30,000-foot perspective."

Any advice to folks that are getting off the ground? 

"We work with many startups, and we see partnerships all the time that struggle. If you’re going into business with somebody, you have to understand how complicated it’s going to be. You have to be willing to be humble, you have to be aware of your insecurities and be open with those, and have a plan to deal with those places where you don't have strengths.  

I think coaching was really helpful to Peter and I in those early days and coming into that awareness. Having somebody to give you an appraisal of your strengths and weaknesses, and a clear objective of what your business is going to do."

If someone were to ask, what's your why and what's your vision for the long term, what would you say? 

"We started a law firm because we believe that we can change the world for the better. We set a good example for how the world could be better, and we try to live that every single day. Money can only get me out of bed for so many days. Our vision is we want to be a regional leader in the pacific northwest and mountain west of what a law firm should be. That means that we need to have an impactful presence, somewhere around 50 lawyers. We will be the example of a business law firm."