A lawyer without any business background in his credentials -- whether from family experience or through formal education -- David went after his passion to build his own company and successfully did it.
David Kelly, Founder and Managing Director of KHQ Lawyers, had one ambition that he truly desired: to be his own boss. Working for himself was something that he wanted from the very beginning and he felt that becoming an entrepreneur was natural to him. And so, without any previous experience in running a business and with no training to back him up, he went out to chase after his dreams.
The lawyer-entrepreneur admits, “I am not a very good employee. I do not enjoy working for someone. I've always had the ambition to work for myself. That is innate within me – the desire to be my own boss and not work for somebody else.”
He retraces those moments when he was still an employee and he had to absorb something new. “When I was working for somebody else, I think I always felt like it's something complicated. Whenever a new idea comes along, I sort of resented the effort that would take me to learn it and apply it because I always felt I was doing it for somebody else. But, as soon as I started doing that for myself, for my business, it felt like a pleasant challenge.”
David’s experiences during his employed years were not particularly remarkable. When he was working in large law firms and in a big corporation as a lawyer, David was feeling agitated in the environment where he was in. At that time when he was with law firms, he deemed them unhappy places, given the heavy burden placed on lawyers like him to bill enormous amounts of money. Apart from working under an enormous amount of pressure, he also had to spend long periods of time at work. When he moved to the other side of the fence, joining the corporate world and dealing with law firms, he found how law firms were providing services in a way that was a problem. They were extremely expensive, the work was not delivered on time, they were not easy to deal with, and if a client was not spending a lot of money on them, they wouldn't pay the client a lot of attention.
“I got the idea that I could do it better. With that in mind, I decided I would try to set up and run a law firm that could be a good place to work, where lawyers -- very talented lawyers, the best lawyers – could do really good work and work hard, but work in a way that was humane and balanced. Therefore, they could stay with me long term and form client relationships that could last a long time,” David avows.
The business didn’t take shape overnight, however. It took about 18 months before David’s ambition to run his own law firm came to fruition. While he was still employed, he was already thinking of his business, and thus, started sowing the seeds by planning and preparing for it. Good thing he found a business partner who felt the same way as he did about what a law firm should be like: one that could retain its high-quality members and could provide a better place to work in.
On the other hand, David had to face pertinent realities in his life, especially with a family to take care of. David recalls that particular stage in his life, “When I set it up, I was much younger, I was in my mid-30s. I had a mortgage and I had a baby. I had to leave a very secure job in a large corporation, with a good income, and start a new business. So, I ended up selling my house to get rid of the mortgage. I had a small amount of money left after selling my house and I used that money as capital to start the business.”
Financial capital was a major consideration when he was starting out and it exasperated David that he couldn’t access the resource that he needed at that time. “We only had a small amount of money to start the business, and none of the banks would lend us money. Having a small amount of capital meant we went really slow in the beginning. It meant that we didn't get paid for the first year because everything we made, we used as capital to get a better office, get another computer, get an employee, and pay the bills.”
It didn’t help that the financing industry was a harsh environment as David would describe it. “It frustrates me that when you begin a business and you start to employ people, you face problems around being able to borrow money to have more capital to continue to grow and invest in your business. And, although government and banks say a lot of nice things about supporting small businesses and investing in small businesses, it's actually very difficult to access support.”
David’s family believed in him and supported him in his entrepreneurial endeavour. However, since his family were not well-off, they were not able to help with investing in the business or loaning him some capital. “But my family were very supportive. I think without that, it would have been extremely difficult,” he adds.
That bit of family history enabled David to comprehend the relationship between work and money. “I've had a job since I was 13 years old. When I wanted something, even as a kid or teenager or through university, I could only get it if I would earn the money to buy it. My parents bought my clothes and my food, but if I wanted anything else, I had to work to get it. I understood that unless I work to make it happen, no one was going to give it to me.”
The first few months of their company were the most worrying for David and his partner. After six months of operation, they had to employ the first person to join their company. “It was the scariest we've ever done. Employing our first person was the terrifying thing we ever did because we realized that we would have to pay him regardless of what happened. And we had a law firm that was only 6 months old, didn't have many customers, and nobody knew who we were. Lawyers earn a lot of money so when we employed our first lawyer, I was very, very nervous. But I realized that employing other people was the key to having a business because if it's just me or just me and my business partner, that's all that will ever be. We'd never be a proper business.”
With no business background, David and his partner steered through the journey, learning the ropes only by experience. Neither David nor his business partner had any family member who had a business background. They were the first in their respective families to start a business. Although their training as a lawyer did give them a lot of useful education because they understood how contracts work, the laws they needed to comply with when having a business, and what they shouldn’t be doing. But when it comes to managing people, learning about profit and loss, and balance sheets and cash flow, they had to learn those from scratch.
Given that limitation, David considers employing the wrong people as their biggest mistake. “Not acting quickly when an employee doesn't work, that's a big mistake. It's a mistake for my business, but it's also a mistake for that person. If a person joins my business and, for whatever reason and it might be nobody's fault, they don't fit and they're not going to work out, it's best for everybody to act quickly. And the mistakes that I've made had been when I haven't acted quickly and I've tried to change the person or change myself. With more wisdom, I realized that that doesn't work. It's best to act quickly while things are still pleasant and then move on.”
Back in 2006, when David didn’t have a mentor to guide him through the ins and outs of running a business, he and his partner were alone, braving the corporate jungle and becoming the fittest in order to survive it. But when he joined EO Melbourne, he found that EO performs that role for him. He heard of EO from two of his clients who told him he would get value out of it.
Something happened at that time which David had to surmount that led him to join EO Melbourne. “What really made it urgent for me to join was when the guy whom I started the business with back in 2006 decided to leave. And he did leave. So, that left me alone as the only founder of the business and that felt like my support and my help had been taken away. That caused me to really get serious, so I joined EO with the view of learning more and getting some support.”
When his co-founder and another key person left the business in 2014, it was a trial that David has metamorphosed into a victory. It was a threat that he was able to turn around as the company’s biggest opportunity. He saw it as an opening to redesign the company, making it eventually a bigger, better and more profitable business. He also made it an even happier and more focused place to work.
But David doesn’t take all the credit. “I was very lucky that among the people who were left there were very talented people and very successful lawyers. And so, it was an opportunity for them as well to join me in owning and running the business. So, I really can't claim that it's my success alone. We came together as a group of four. I might be the leader or I'm first among equals, but those people were very smart, very clever and have the same vision for this business as I do.”
He was also thankful for the additional knowledge and business support he got from EO, which has taught him how to deal with people, to have a vision and a strategy, how to execute a strategy, and the confidence to be able to do all these. David now sees the difference. “In the early years, we didn't set a future vision and a future strategy. We really didn't know how to do that. We didn't understand or appreciate how important that was. Since joining EO, I've learned how crucial that is. If I was to do it again or if I was to help other people do it again, I would say, first, let's set, instead of a one-year, a 3-year and a 5-year vision.”
David is applying that learning now in KHQ Lawyers. This year, they have set the vision for their business for 2022. The plan enabled them to know exactly what size they will be then, what services they will offer, how many partners and lawyers they will have, and what systems and processes they will need.
Looking back to his entire entrepreneurial journey, David sums it up in two words: persistence and resilience. Had he stayed in the comforts of a secure job in a large company, earning a good income, he wouldn’t have established his business. But he persisted and he faced all challenges just to achieve what he is set to achieve: to be his own boss.
More of David Kelly in his LinkedIn profile. Read about KHQ Lawyers at http://www.KHQApproved.com.au.