Breaking the mould: leaving a major firm to start your own with Scott Moran

LUKE: Today's episode is sponsored by VXT, the phone system built for law firms. VXT integrates with practice management systems so that when lawyers make calls, their billable time and legal advice can be saved in the right place automatically. 20 percent of billable time goes unrecorded. A lot of that is phone calls that get forgotten about. Get some of those billables back using VXT. Go to vxt.co.nz or click the link in the description to find out more.

‍SOPHIE: So, Scott, you have had a massive shakeup in your life recently, making the decision to leave Duncan Cotterill, one of the largest law firms in New Zealand, after 28 years to establish your own law firm, Moran Law. I'd love to delve into the nitty-gritty of how and why you did this, but firstly, you've also had experience opening the Duncan Cotterill office in Wellington when it took a bet on you in your 20s. Can you share what that opportunity involved?

‍SCOTT: Yeah, well, I was just really a senior solicitor in our Christchurch office at that time. The firm had opened in Auckland in the late eighties and I thought that Wellington was a natural next step. They looked around the pool of solicitors and I was lucky enough to be approached to move. It was a pretty big call for us. We had a baby on the way, but the opportunity to open an office and move city was just too great really, and we jumped at the opportunity and moved up.

‍SOPHIE: Yeah. I imagine this isn't the type of opportunity that when you're in your twenties, you would really get today.So, what were some of the main challenges that you faced?

‍SCOTT: Yeah, I guess it took stride in terms of it being a new office but also backed by a national firm. So, I think the support we had from the firm meant that I felt as though I was supported and a number of the lawyers around the network would help peer review work that I was doing. I thought it would mainly be marketing in the first year or two and that I'd be playing a lot of golf with prospective clients and things but that only lasted a couple of weeks, unfortunately.

‍SOPHIE: Are there any key insights or lessons that you learned during that process that you've been able to use later on in the way you approach leadership or entrepreneurship?

‍SCOTT: The main lesson I had probably moving up to Wellington is that Wellington's a unique market coming from Christchurch, which is that stereotypical old boy or girl network and Auckland also being its own networks within itself as well. But I think in Wellington, a lot of people are from outside of Wellington. And so coming to Wellington and asking people, can we help you out? A lot of people were willing to give you a go see how you went and then relationships would go from there.

‍SOPHIE: What's the difference? Were you having to build up your own client base for the Wellington office when you got up there?

‍SCOTT: The firm approached the Wellington move with the idea of partnering with somebody. So, we partnered with a two-partner practice, John Hanning and Peter Connor, who were really looking for a succession plan. They had a client base that they were working with as they transitioned out. But generally, I didn't have a client base apart from a few good contacts. But, yeah, that grew pretty quickly. I've got some notable clients who I met in my first week in Wellington who are still clients today, so very lucky.

‍SOPHIE: And do you think that the way you approach finding clients in a new office is different from finding clients in an existing, more established office?

‍SCOTT: Yeah, it's interesting really when reflecting on the journey and some of the questions that have been posed to me over the last few weeks. I think probably the mindset is different. It's hard to articulate what the difference is, but I guess when you come to a new city or country to open a new office, you do come in with a different mindset and then I guess all your interactions with all your prospective clients or referrers are also just a bit of a growth new entity. This is what we're here for vibe and I think that then snowballs upon itself.

‍SOPHIE: And were there any strategies that you found most effective back then? And this might be similar to you now with your own firm.

‍SCOTT: Yeah, probably the principles of supporting clients haven't changed that much over the years. I think listening with empathy, understanding where clients are coming from, and giving prompt service. I've been a big believer in not overdoing things or at least matching what the client's expecting. Some clients do expect a detailed bit of advice and some people want a commercial stare and probably the secret sauce is reading which one each client wants.

‍SOPHIE: And so the Wellington office has grown significantly since you were sent up there to open it and now has 10 partners and another 60 people in the team. What do you think was your most significant contribution to the establishment and growth of that office?

‍SCOTT: Probably comes back to what we're talking about before in terms of the growth mindset of the office and then everybody. And I think that then rubs off on the whole staff in terms of how they approach things. And I think if also younger, ambitious staff know that they're joining an office that wants to grow, it also means that the office creates room for them. I think a lot of firms will stagnate or not grow when its partners are sitting in a seat and thinking I, I need to make sure I've got my fees and that's my main task here. But if everybody's got the view of we've been sent to a city with a view to growing the office, it means everybody's looking at what the opportunities are, whether that be from lateral hires or within.

‍SOPHIE: And what do you think the key things that a partner can do to stimulate that growth mindset in the firm, but then also on the flip side, what's something that junior lawyers could be doing?

‍SCOTT: Yeah, from a partner perspective, I think it is giving young lawyers the opportunity to grow, make mistakes, front clients, be involved in meetings and make good decisions. I think that's the key for them. And the other thing for young lawyers, it is, I think it is for them putting their hand up for anything that they can help with and really seeing where the growth of the office or the firm is coming from. And also finding an area of law that they are passionate about because I think without the passion about the area of law you're doing or the clients you're serving, you're really never going to be authentic enough.

‍SOPHIE: Yeah. And I know that you are very passionate about and recognized for creating and maintaining a positive law firm culture. In your words, what do you think a positive law firm culture is?

‍SCOTT: Yeah. In terms of what creates a positive culture, I think it is just enabling everybody in the office to be themselves and contribute towards the goal of the office. And again, if the office feels like it's successful and it's growing, I think then everybody is also more engaged. They're more likely to put in discretionary effort, whether that be in marketing or work. And I think that again, it's a snowball effect and it builds upon itself and can create its own culture. Just giving people the ability to have room and rise themselves in terms of their careers and growth is the key thing.

SOPHIE: And when we've previously spoken, you've mentioned the concept of angry achievers and the importance of alignment with a law firm's culture. Can you explain what an angry achiever is and how to navigate situations where there might be an angry achiever?

SCOTT: Yeah. I think that's a David Maister comment. He's written the Bible on managing professional services firms. And I chaired the firm for a few years in the mid, the teens and did a bit of reading around that. And I think it's the same in any team. I think if you have got someone who is actually a high performer, but it's disruptive from a cultural perspective then the right decision for that team is actually, despite that person being valuable, that it's probably better that they run in their own lane. And I think I've found that professional services firms, if everybody's moving in the same direction, that's what creates success and what can slow it down is being distracted by what might look like a really valuable contributor. On the numbers or using certain metrics, but if they're not contributing to the culture of the office, then that often slows the office down.

SOPHIE: Do you think that you come across angry achievers perhaps when lawyers are maybe at the start of their career or do you think it's more common later on in their career?

SCOTT: I think it's more common later on. I'm not thinking of any examples in my own firm, but I do know a lot of anecdotal examples about partners once they become a partner. So often young lawyers are very ambitious and they'll do everything they can to get to the top and play the game really well. Often you see their true colors when they get to partnership and turn into slightly different people and enjoy the, enjoy probably the perceived power too much. In terms of your question, I think sometimes it can be hard.

SOPHIE: And so now I kind of want to move on to starting your own boutique law firm, Moran Law, can you share a little bit about your firm, your offerings and what initially sparked your decision to open it?

SCOTT: I had a great run with Duncan Cotterill and the Wellington office and it's a great firm. But I guess it's probably an issue reflecting on me being sent up to Wellington a number of years ago that I really enjoyed that process and so doing it again, before the end of my career just was probably something that was a really nice pull and I really enjoy working in big teams but the ability, particularly at the start of the journey to be in full control and have complete control over the destiny and direction of the firm. Despite it not being a big difference from my practice was probably just really appealing and something I'd had in the back of my mind and wanted to do for a while.

SOPHIE: And how's it all going so far?

SCOTT: Five weeks in now and and it's going really well. I was lucky enough to be able to have a team on day one. And that really helps both in terms of the atmosphere of the firm, feeling like a startup and having a bit of energy. But also being lucky enough that we have had really good support from some clients I've known for a long time and also some new clients that have come.

SOPHIE: Yeah, that's great to hear. Can you walk us through the steps that, and the timeline that you went through from conceptualization of you wanting to start a firm to the official launch?

SCOTT: Yeah. I guess probably, yeah, conceptualization probably happened over three or four years listening to motivational podcasts from people Yeah, over three or four years, but probably the switch in terms of determining that I've got to stop thinking about it and actually do it was probably seven months ago from now. And then once getting over the hurdle of making that really hard decision and having to give notice in my previous partnership then it's been all hands to the pump really in terms of preparing. And so there haven't been many weekends or evenings off in the last four months.

SOPHIE: Yeah, what was some of the practical steps or more operating things that you had to go through or anything that might have surprised you of being actually quite hard or difficult?

SCOTT: Yeah, I think a lot of the a lot of compliance. I guess I was probably relatively well prepared in terms of the steps I needed to take to find a practice management system. Accounting systems legal systems, and being supported by the LawPlus group and the way that I've sourced some of the other suppliers. Probably the biggest challenge for me was the Trust Account Supervisors course. I've been working with trust accounts and money for Decades, but actually going back to school almost and having to put in 50, 60 hours of study for that course. And then complete a manual test only two weeks out from launch, which was, and it was pretty critical. I passed that was probably the most stressful part of the process.

SOPHIE: And how did you go about selecting your practice management system? And what did you end up landing on?

SCOTT: Ended up landing on Actionstep. And probably the key driver for that was the foreign currency ability that it has. We do a lot of trademark work, which means we are billing and receiving money in foreign currencies and so forth. So having that native to our system was probably the key point. Certainly looked at Leap and OneLaw. And OneLaw in particular I think is a really good product. But probably the foreign currency part meant that the Actionstep was probably the only realistic option for us.

SOPHIE: And have you noticed quite a big difference using something like ActionStep compared to what I assume is a bit more of a legacy or bigger system that you'd use at Duncan Cotterill?

SCOTT: Yeah, we're basically given, I'm having to be in the back end and the front end of this one. And I think the team are finding it relatively intuitive in terms of the way that it works and it can be a bit more agile in a smaller firm and you can add and change things and so forth. We're going through our first billing cycle right at the moment, which is proving to be a little bit of a challenge, but we're going to get there.

SOPHIE: Yeah,do you think that you're operating in a competitive market and the niche that you're offering as a law firm in New Zealand? And what have you done to differentiate yourself from other law firms?

SCOTT: Yeah, that's a good question. I think it feels like I've been lucky in my career to have an abundance of demand, and being able to supply that. I think from a macro level, I think there's definitely less activity in the market at the moment with the state of the economy and so forth, but intellectual property has always been something that is following the new economy as it progresses. The private client work we do, we were protecting significant assets and so forth As, as important as it ever was. And then with a number of local businesses and charities and so forth that we support yeah, they keep doing their thing. Yeah, I think in terms of differentiating, I think still personal relationships and brand stand out to me and are the most important aspect particularly in mid to small to medium sized law firms in terms of How you form relationships, retain clients, and attract them.

SOPHIE: And so you mentioned the work area that you're in with private clients and IP law, what made you want to get into this area of law when you first started practicing?

SCOTT: Yeah, my, I first started my career in Queenstown doing resource management work, actually, and then that morphed into private client property work. And then I did take an interest in intellectual property work probably 20 years ago now, and just tried to be intentional about upskilling that. When you're in a large law firm, you've got the ability, you've got a number of officers and other people who are effectively your internal clients. So if you can raise your profile internally, you can slowly start building up internal referrals and get to the point where you're confident enough to source external referrals and then start employing people who are really good and growing the team. But branding work, in particular, is just good fun. I think it's often seen as a sexy area of law because you're dealing with really cool brands. And as my career in that area has developed, it gets even better because it's an international market. We're off next week to the International Trademark Association Conference in the U.S., and there's about 12,000 trademark lawyers going there. It's one big sales conference where you're selling to each other, which probably sounds horrific, but I really enjoy it. It's just one big networking event. You make lots of friends from different countries, you've got lots of things in common. There's a group that plays football one morning. There's also some people who are going to play volleyball. So it doesn't matter what interests you, you can find people who are interested in the same thing, make friends, and then doing business is almost the secondary part of it. So I just fell into that world, but really enjoyed it. And it makes it easy to do your job.

SOPHIE: Yeah, that sounds super interesting. And do you think that if you switched from resource management and moved into IP law now, it would still be easy to do at a firm like Duncan Cotterill if you started as a grad in resource consent management?

SCOTT: Yeah, yes, I think there are varying degrees of firms. I think at Duncan Cotterill, we have a rotation system which works really well for the grads. So they'll often spend some time in litigation. So, for one thing, they can get a taste of everything and then select what team they want to go into. And if you put your hand up to help another team, you've got the ability to do that. In some of the larger firms with more specialized teams, it's probably a bit harder, I think. But as a young lawyer not in that system, identifying the people doing the work you want to do in the country, whether that be music or environmental climate change work, you can seek them out if you try hard enough.

SOPHIE: And on the topic of recruitment, you've mentioned in an article and when we've previously spoken that you believe in recruiting talent that is better than yourself. With that in mind and with your emphasis on having a positive law firm culture, how do you approach recruitment for that? And how do you think you will approach recruitment at Moran Law?

SCOTT: Yeah, I've been lucky in terms of the people I've worked with here. I've worked with them before, and it's easy when you have complete trust and faith in your team. It is notoriously difficult to hire the right people, I think. But I think genuinely finding people who are interested in the organization and how you practice rather than necessarily just wanting a job is probably the hardest bit to identify. So when looking for somebody, making sure, trying to get some reassurance that they are there for the right reasons, and they want to be part of the team as opposed to just having a job is the hardest.

SOPHIE: Yeah. And looking ahead on that topic, what are your aspirations for Moran Law? Do you want growth and expansion or what does that look like?

SCOTT: Yeah, I don't think I've been able to help myself but grow because I enjoy that. I really enjoy seeing people around me and the team grow and progress. I haven't got any specific set plans or aspirations from a number point of view or a target point of view, but just to really start the journey, trusting that I've been on that before and think that it'll be fun and we can make it work.

SOPHIE: Awesome. And so setting up a completely new law firm also involves establishing a new culture for a firm. Can you share some of the initiatives that you've implemented to foster a culture in your own practice? Or I know that you're only five weeks in, so maybe you can draw on some things from Duncan Cotterill.

SCOTT: All the things my team have called me out for already are really just involving the whole team in the whole practice. At the moment, particularly in the Wellington team, we're all effectively in the same office. We're trying to embrace some of the things like social media and other things, and actually, everybody's involved in that. It's quite good fun to see that. Everybody's involved in the successes and the wins and the progress. From that point of view, I think that really binds people into feeling like they're part of a team and a movement. A bit of a startup gives that good energy at the start. So the challenge is to be able to keep that going beyond the first five weeks.

SOPHIE: Yeah, it's quite a unique opportunity when you may not have the whole resources of having a marketing team and an HR team and all those kinds of support networks that can do those things. So if the whole team can pitch in and do those, they definitely become a lot more passionate about the growth and prospects.

SCOTT: And I think I've heard some advice recently around that, actually. This is for any young graduate, not necessarily a young law graduate, but seeking out smaller teams and being part of those does actually give you a wider range, a wider skill set. People know how to format a Word document really well and get involved in social media and understand what it takes to attract a client. Whereas if you are in a larger organization, sometimes that's not your job, and you miss out on that. With AI and other developments as we move along, a well-rounded skill set is probably going to be valuable.

SOPHIE: Definitely. I imagine that area of IP law is going to evolve significantly with the development of AI. So I have some hot topic questions for you. First of all, how does IP law currently address the ownership of AI-generated content?

SCOTT: Yeah, that's a million or billion-dollar question at the moment. OpenAI is subject to a number of lawsuits in the U.S., and similar entities like it, particularly with the large language models, using other people's copyrighted materials to generate content. It's going to be really interesting to see how that evolves over time. There's also a patent case that's gone through a number of courts whereby AI has generated a patent, and in most jurisdictions, that's been ruled out or refused as being original material that's capable of being protected under the relevant patent statutes. That's a really interesting topic, particularly when you often have a human who's manipulating the AI behind the scenes to get towards a result. There is actually some human capital involved in making sure the AI can create the invention or the copyright work. So again, that will be a really interesting topic, but I don't think anybody in the world has clearly settled on that yet.

SOPHIE: Yeah. Do you have any personal opinions on, I know that some authors of books have had issues with OpenAI skimming all that content and using it. Do you have any perspectives or opinions on that?

SCOTT: Yeah, I guess my initial personal opinion is, I think this is probably like a lot of things in life, particularly in the digital age, where we probably have to adapt to the pace of that change. Trying to protect what might be considered in a few years as archaic text is not futile, but I think everybody has to adapt and move forward. Trying to exclude the use of that data as much as possible is not going to get us far, I think.

SOPHIE: Yeah, and given the global nature of AI development, what do you think the challenges and opportunities might be with harmonizing IP laws across different jurisdictions since it's such a connected system?

SCOTT: Yeah, it's interesting. I think the ability for governments and agencies to harmonize themselves and the pace that takes compared to the pace of technology as it just moves into exponential growth is going to be really interesting to see. I don't think the governments and teams will be able to keep up with it. It's going to be a continuous struggle. We've only really just had in the last few years copyright law reform that's trying to take into account some of the digital technologies which were coming in 20, 30 years ago. It's going to be a real challenge, and I see it as difficult for law to keep up unless there is actually a global approach to big tech, particularly globally.

SOPHIE: Yeah, it's interesting. I feel like the next five, ten years, anyone who has AI platforms is just going to do what they want, and then it will be pretty much afterward that we find out if they're going to be done for stealing everyone's content or whatever the outcome is.

SCOTT: Yeah, OpenAI's defense lawyers are going to be busy for a long time.

SOPHIE: Very much. And on top of that, on the topic of AI and the law profession generally, how do you think lawyers will be able to use AI in the future?

SCOTT: Yeah, it's already interesting when you're coming to a new practice and you're picking up products like LexisNexis, which have already got some of these AI tools built in. As a more senior practitioner, you hadn't really accessed that product for 20 years. So it's really interesting to see that it's already here. And no doubt, some of those tools are only going to get more useful over time. Coming back to some of the earlier points, that's why I think lawyers' own personal brands and relationships are going to be really all that they've got moving forward. The proliferation of precedents and freely available precedents over recent years, in the same way that Xero has done with accounting in terms of taking out some of what used to be a core role, as that continues to develop, I think lawyers have got to stand out themselves. But I think there will definitely still be a place for lawyers, but it will just look quite different in terms of interpreting the data. It's going to be important for everyone to keep on top of it. It's been nice to start a firm with all its products in the cloud, so we're not having to rely on servers and so forth. We are participating in an internal AI product pilot, and I think it's important for small firms to be proactive around that.

SOPHIE: Yeah. Like you said, personal branding is going to be super important when more legal activity can be completed using AI. Sales and marketing will become a lot more important in New Zealand. When you look at America, law firms have ginormous marketing and sales teams, whereas that's not common at all in Australia and New Zealand. So it'll be interesting where that goes in the future. Law firms have always been quite slow to adopt new technology. COVID definitely advanced the industry significantly. Hopefully, they don't get left behind on the AI front as well, given that it's a very difficult piece of technology to use in law firms, given its unpredictability. That was all my hot topic questions for AI. Now I wanted to talk a little bit about the governance roles that you have held outside of your legal practice, such as serving on the boards of New Zealand Football and Special Olympics New Zealand. How do you think these roles have complemented your legal career, and what have you gained from them in terms of skills?

SCOTT: Really interesting. I've added so much; it's quite hard to articulate why. When you're doing your legal role on a day-to-day basis, generally, you're aligned with your clients, helping them, on their side, and dealing with the other side. Sometimes that might be adversarial, but generally, you're on the same team. You don't have some of the conflict that you actually have in a sports environment, where you've got a number of different stakeholders with lots of different demands. Getting exposure to different board member perspectives and other stakeholders' perspectives has been really valuable. Developing emotional intelligence, understanding how one decision might impact another part of the system, and having real-life experiences to fall back on has been invaluable. It's added a huge amount of value for me in terms of advice to clients and personal growth.

SOPHIE: Yeah, it must be nice when you've been having to think with your lawyer hat on all the time to go to a different environment where you can think a bit more strategically or as a business mind and hear from people from different sectors and areas.

SCOTT: Yeah, and I think it's really important. Lawyers often do get called upon to put their hands up for boards. It's important for lawyers to try to take their hat off because you do hear war stories from other boards of lawyers who end up being the fun police, who want to regulate everything, slow things down, and ensure all the regulation is complied with without taking into account the commercial side of the organization. Lawyers can be really valuable if they take a commercial lens together with their legal knowledge into those board roles.

SOPHIE: That's a good piece of advice. How did you become a part of those boards? At what point in a lawyer's career do you think they could start looking to join a board?

SCOTT: To the last point, I think as early as possible is really good. Aspirational lawyers will try aspirational board roles, and trainee board roles are more and more common these days. Taking the opportunity to be involved in one of those is great for knowledge building and networks. So I think it's really important for young lawyers to get involved as much as they can.

SOPHIE: Yeah, there's also been a lot more emphasis in recent years on having younger board members because of that diversity of perspective. A lot of the issues companies might be facing now are quite different from what they might have looked like 20 years ago or even five years ago.

SCOTT: Yeah, it's really invaluable. It's all part of diversity.

SOPHIE: Is there any specific accomplishment or memory from your governance roles that you think has had a significant impact on your personal growth as a leader?

SCOTT: New Zealand Football went through a review a number of years ago, which was really challenging. It's unusual for a lawyer because, typically, you can control the outcome. Whereas, with board roles in a public review, you can't control what the papers are printing or what other stakeholders are saying. That was the most challenging time in my governance career but also the most educational. When dealing with stakeholders trying to position themselves, you become much more savvy and alive to it. That was a real growth period in retrospect, but rocky at the time.

SOPHIE: Interesting. Thank you for sharing that. Now to wrap up the episode, I have some quick-fire questions that you can answer with a word or a sentence. What do people not understand about the law that you wish they did?

SCOTT: I wish they understood how law firms actually work and how they charge. There's such diversity in how many people a firm will bring to a meeting compared to another firm. Understanding the implications of how a firm works is quite important and underrated.

SOPHIE: Do you think there's anything you can do to help people understand that more?

SCOTT: Yeah, I think communicating in plain language about how we actually work. Often it still is a mystery and probably shouldn't be.

SOPHIE: What element would you change about the legal industry today?

SCOTT: More transparency around how each law firm works, and perhaps including that in our regulation.

SOPHIE: If you could give advice to someone in a similar position as you were at the start of your career, what would it be?

SCOTT: Put your hand up, take any chance you can get, get involved, and make sure you are following a journey you want to be on. That'll serve you well in the long term.

SOPHIE: If you weren't a lawyer, what would be your dream job?

SCOTT: Probably a marketing manager. I love marketing.

SOPHIE: Interesting. You don't often hear that from a lawyer. Thank you so much, Scott. I'm sure our listeners will be able to take away some real advice from this episode. If anyone wants to check out Moran Law, where can they find you and how can they get in touch?

SCOTT: The new firm is online at www.moranlaw.co. All the details are there. Thank you.

SOPHIE: Great. Thanks for coming on the show, Scott.

SCOTT: Thanks for having me.

ELLA: Thanks so much for joining us for this episode of File Notes. To keep up with the latest episodes and content, follow us on LinkedIn and YouTube at File Notes Podcast. You can also visit us on our website at vxt.co.nz/podcast/filenotes to subscribe to our email list and never miss an episode. See you there.

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