I.  Introduction

    At first glance, it looks as though lawyers and entrepreneurs don't have much in common.  The legal profession "offers a low-risk (if high-stress) means to a long, relatively well-paid, and tightly-controlled career at a privately-held law firm or government position." [1]  The path of an entrepreneur, on the other hand, offers a high-risk means to a career with no guarantees or definite returns on investment. [2]  Yet, more than ten percent of the CEOs in the Forbes 500, a list of the 500 largest public companies in the United States, are former lawyers. [3]  How did this happen?  According to Gregg Engles, former lawyer and current CEO of Dean Foods, Inc., the discrepancy is simple. [4]  "Many lawyers let knowledge of risk paralyze them.  They focus exclusively on risk, while entrepreneurs focus primarily on opportunity.  The person who can simultaneously perceive the opportunity and the risk has a competitive advantage." [5]

II.  Characteristics of a Lawyer-Turned-Entrepreneur

    There are certain basic characteristics that are innate in both lawyers and entrepreneurs.  For example, both careers require energy, initiative, motivation, creativity, and the ability to juggle multiple tasks, deal with time pressures, and pick up new information quickly. [6]  Both careers also require an objective approach to problems, such as focusing on performance and accomplishment rather than personal feelings. [7]

    Despite the similarities, lawyers and entrepreneurs can be very different.  Three characteristics distinguish lawyers-turned-entrepreneurs from their peers who remained in the legal sector: their risk tolerance, their optimism, and their leadership abilities. [8]  Most lawyers are skilled at risk analysis and avoidance. [9]  There are exceptions, such as personal injury or product liability lawyers that often take enormous risks in hopes of yielding a huge reward; however, most people choose the legal field because of its predictability. [10]  The lawyers that separate themselves from the majority are the ones that have an innate attraction to challenge. [11]  It is this need for challenge that makes the lawyer-turned-entrepreneur more risk tolerant. [12]  Put differently, it often seems as though entrepreneurs are taking high risks, but in actuality they have assessed the risks thoroughly, and this assessment is a function of entrepreneurship that lawyers are more than equipped to handle. [13]

    The other distinguishing characteristics of the lawyer-turned-entrepreneur are optimism and leadership.  Optimists experience unforeseen challenges as opportunities, not setbacks or frustrations. [14]  Optimists are self-assured, but not self-focused. [15]  As for leadership, strategic thinking and the ability to take decisive action is a crucial skill of an entrepreneur. [16]  Jeffrey Kindler's experiences as GE's former head of litigation (and as general counsel of McDonald's and CEO of Boston Market) taught him the difference between leadership and management. [17]  Today, as Pfizer Inc.'s general counsel, Kindler continues to interpret this distinction.  "Managing implies supervising people and telling them what to do, but leadership inspires creativity and self-initiative among the talented people who comprise the team." [18]

III.  Career Paths after Leaving the Law

    Over the years, lawyers have left the legal field for all sorts of business ventures.  Corporate lawyers often have the easiest transition because they already work so closely with large companies. [19]  For example, Edward Kelly III began his career as general counsel of J.P. Morgan and now works as CEO of his former J.P. Morgan client. [20]  "Really effective successful corporate lawyers have to think like CEOs of Fortune 500 corporations who are their clients," says Kelly, "...[and] as a result, strategic, tactical, and business skills develop naturally." [21]

    Corporate lawyers are not the only lawyers with an appetite for business.  While working as federal prosecutors, Rick Rosenfeld and Larry Flax gave up the courtroom to open up the first California Pizza Kitchen in Beverly Hills, California. [22]  California Pizza Kitchen has since grown to ninety-two locations in twenty states and two countries. [23]

    Other lawyers have added "entrepreneur" to their list of accomplishments without actually leaving the legal field.  For example, David Nachman designed "legal briefs," underwear for lawyers, and "law suits," track suits for lawyers, while in law school to pay for his attendance. [24]  He then went on to practice law, eventually starting his own practice in business immigration law. [25]  Along the way, Nachman successfully started two companies, a restaurant and a bar, and is now preparing to launch his third venture, a food tour in France. [26]

IV.  The Benefits of Having a Law Background

    If entrepreneurship is the inevitable career goal, then why not skip the "lawyer" part and go straight to business?  The most common scenario for the lawyer-turned-entrepreneur is to become an entrepreneur after practicing for a few years. [27]  This chosen path, however, is not entirely based on a need to pay off school loans.  Entrepreneurs with legal training have the ability to draft contracts, choose a corporate structure, and deal with investors with confidence. [28]  Moreover, law school and years of practice in the legal field creates a strong background in negotiation, communication, legal analysis and research, and problem-solving. [29]  Lawyers are trained to generate creative solutions, and as an entrepreneur, this skill translates into an ability to develop a plan of action, implement the plan, and keep the planning process open to new information and ideas. [30]

    The lawyer-CEO, like most CEOs, has a deeply ingrained sense of principle and fiduciary duty to shareholders.  However, the lawyer-CEO has the additional training to proactively use the law as a creative tool to shape the rules of industrial engagement, craft innovative deal structures, and navigate successful business solutions through complex regulatory environments. [31]  "Also, inevitably in business, some yahoo tells you he's going to sue you, and you learn how groundless such a threat usually is." [32]  As such, the benefits of having a legal background are more than evident.

V.  Conclusion

    Lawyers-turned-entrepreneurs use risk tolerance, optimism, and leadership, combined with their deep knowledge of law and legal process, to accomplish business objectives.  [33]  Lawyers know how to identify the gaps, extrapolate from existing information, and create unique ways of looking at things.  All of these skills are at the heart of the work of a successful entrepreneur.  "Where is there a gap in the marketplace?  What is the best way to fill that gap so that consumers will respond to my product?  How can I uniquely position myself in this space to maximize my returns?" [34]  All of these questions are asked by entrepreneurs and can be readily answered using a lawyer's analytical toolkit.

Endnotes

[1] New Jersey Technological Council, The Lawyer as Entrepreneur, Jobcircle.com,http://jobcircle.com/career/articles/x/njtc/3018.xml.

[2] Judith Glick-Smith, Successful Entrepreneurs, Soc'y for Tech. Comm., Feb. 26, 2006, available athttp://www.aw-wrdsmth.com/FAQ/characteristics_successful_entre.html.

[3] June Eichbaum and Victoria Reese, The Entrepreneurs, The Consiglieri, The Public Servants, Lawexec.com, Fall 2002, http://www.heidrick.com/NR/rdonlyres/4626B911-D7F2-4636-B898-841753A255DF/0/HS_EntrepreneurConsiglieriPublicServant.pdf.

[4] June Eichbaum and Victoria Reese, The Lawyer-CEO: Role Model for a Strategic Business Partner, Lawexec.com, Summer 2002, http://www.heidrick.com/NR/rdonlyres/4746CE30-D105-400C-B5F2-FE11C9783FFE/0/HS_LawyerCEO.pdf.

[5] Id.

[6] Ruthe Ashley, Creating the Ideal Lawyer, A.B.A. J., Apr. 2003, available athttp://www.abanet.org/genpractice/newlawyer/2003/apr/ideal.html.

[7] Judith Glick-Smith, Successful Entrepreneurs, Soc'y for Tech. Comm., Feb. 26, 2006, available athttp://www.aw-wrdsmth.com/FAQ/characteristics_successful_entre.html.

[8] June Eichbaum and Victoria Reese, The Entrepreneurs, The Consiglieri, The Public Servants, Lawexec.com, Fall 2002, http://www.heidrick.com/NR/rdonlyres/4626B911-D7F2-4636-B898-841753A255DF/0/HS_EntrepreneurConsiglieriPublicServant.pdf.

[9] June Eichbaum and Victoria Reese, The Lawyer-CEO: Role Model for a Strategic Business Partner, Lawexec.com, Summer 2002, http://www.heidrick.com/NR/rdonlyres/4746CE30-D105-400C-B5F2-FE11C9783FFE/0/HS_LawyerCEO.pdf.

[10] New Jersey Technological Council, The Lawyer as Entrepreneur, Jobcircle.com,http://jobcircle.com/career/articles/x/njtc/3018.xml.

[11] Judith Glick-Smith, Successful Entrepreneurs, Soc'y for Tech. Comm., Feb. 26, 2006, available athttp://www.aw-wrdsmth.com/FAQ/characteristics_successful_entre.html.

[12] Id.

[13] Id.

[14] June Eichbaum and Victoria Reese, The Lawyer-CEO: Role Model for a Strategic Business Partner, Lawexec.com, Summer 2002, http://www.heidrick.com/NR/rdonlyres/4746CE30-D105-400C-B5F2-FE11C9783FFE/0/HS_LawyerCEO.pdf.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] June Eichbaum and Victoria Reese, The Entrepreneurs, The Consiglieri, The Public Servants, Lawexec.com, Fall 2002, http://www.heidrick.com/NR/rdonlyres/4626B911-D7F2-4636-B898-841753A255DF/0/HS_EntrepreneurConsiglieriPublicServant.pdf.

[22] New Jersey Technological Council, The Lawyer as Entrepreneur, Jobcircle.com,http://jobcircle.com/career/articles/x/njtc/3018.xml.

[23] Id.

[24] Mary Waldron, Lawyer Turned International-Restaurant Owner, Lawcrossing.com,http://www.lawcrossing.com/article/index.php?id=2757.

[25] Id.

[26] Id.

[27] New Jersey Technological Council, The Lawyer as Entrepreneur, Jobcircle.com,http://jobcircle.com/career/articles/x/njtc/3018.xml.

[28] Id.

[29] Ruthe Ashley, Creating the Ideal Lawyer, A.B.A. J., Apr. 2003, available athttp://www.abanet.org/genpractice/newlawyer/2003/apr/ideal.html.

[30] Id.

[31] June Eichbaum and Victoria Reese, The Lawyer-CEO: Role Model for a Strategic Business Partner, Lawexec.com, Summer 2002, http://www.heidrick.com/NR/rdonlyres/4746CE30-D105-400C-B5F2-FE11C9783FFE/0/HS_LawyerCEO.pdf.

[32] New Jersey Technological Council, The Lawyer as Entrepreneur, Jobcircle.com,http://jobcircle.com/career/articles/x/njtc/3018.xml.

[33] June Eichbaum and Victoria Reese, The Entrepreneurs, The Consiglieri, The Public Servants, Lawexec.com, Fall 2002, http://www.heidrick.com/NR/rdonlyres/4626B911-D7F2-4636-B898-841753A255DF/0/HS_EntrepreneurConsiglieriPublicServant.pdf.

[34] New Jersey Technological Council, The Lawyer as Entrepreneur, Jobcircle.com,http://jobcircle.com/career/articles/x/njtc/3018.xml.