Riding solo to the rescue of her beloved nonprofits

Chris Mondics, Philadelphia Inquirer, April 17, 2012

It wasn’t long after Morgen Cheshire was named a partner at Schnader, Harrison, Segal & Lewis L.L.P. that she realized she would soon face a wrenching decision.

Making partner at a big firm is a dream for many young lawyers, and finally she was there. In that role, Cheshire wanted more than anything to represent the rich tapestry of foundations, institutes, and other nonprofits that call Philadelphia home — she had been working hard to develop that client base. The ties to Schnader, moreover, were strong: The firm had warmly embraced her, nurturing her professionally over the seven years it had taken to make partner.

But it was clear to Cheshire that many of the nonprofits that might be her clients could not, over the long term, swing the hourly charges that fuel bigger law firms like Schnader. Her rates were approaching $400 an hour and were sure to go higher. Many of the institutions in her target group didn’t even report legal expenditures on their form 990s to the IRS, their budgets were so tight.

So the choice was stark:

Stay at a prestigious firm with an office on the 32d floor of a building at 16th and Market Streets in Center City, where for generations lawyers have been advising some of America’s top companies, and risk losing the nonprofits that needed high-end legal representation but couldn’t afford it.

Or say goodbye to all that.

Cheshire, now 37, took the plunge in early 2011, and after a short stop at a smaller firm, she’s out on her own. It’s been a breathtaking roller-coaster ride, but she says the new venture has gained altitude and has now achieved a pleasant cruising speed.

She has a part-time administrator and plans to take on an associate soon to keep up with the legal work that keeps coming in the door. Her income is on track to match what she earned in her last year at Schnader, and her clients, meanwhile, are paying less and seeing more of her. One of Cheshire’s innovations is making house calls — life in many nonprofits is so frenetic, and resources are so stretched, that she finds that clients appreciate her coming to their offices, rather than traveling to see her.

It helps, too, in an odd way, that she lists her business address as Mount Airy, where she lives, a bastion of progressive politics, rather than Center City, a corporate redoubt. The better to market to socially minded nonprofits.

“For my clients, but also for me, I didn’t see it as a sustainable business model,” Cheshire said of her goal of exclusively representing nonprofits at a big firm. “The rates were so high. Unless you have a lower price line, they are going to use their pro bono resources.”

In truth, the dilemma Cheshire faced is one that many partners at large firms must confront. Sure, it’s absolutely fabulous after years of toiling in the trenches to be made a partner, even a so-called compensation partner without an ownership interest in the firm. But along with that comes the high chargeable rates and the need to find clients who can afford to pay them. That places exceptional pressure on lawyers, and the grind to develop business can be wearing.

Cheshire, who declined to identify her current clients, also had an entrepreneurial drive, though, and a high level of confidence that she could develop her own small business if she pursued the things that most piqued her interest. She graduated with a degree in history from Iowa’s Grinnell College in 1997 and soon found her way to a job in the Philadelphia Museum of Art’s publications department. She spent her lunch breaks devouring material on the intersection of law and art, then enrolled as a first-year law student at Temple University.

After a summer internship at Schnader, she spent her third and last year at Columbia University law school, where she focused on art law. There, she studied the litigation battle over the move of the Barnes Foundation, with its vast and exceedingly valuable collection of early modern and impressionist and post-impressionist paintings, to its new home on Benjamin Franklin Parkway. After clerking for a federal judge for a year following law school, Cheshire joined Schnader and eventually was named cochair of the nonprofit practice group.

Cheshire’s departure from the firm was emotional. Former chairman Ralph Wellington, one of the city’s top litigators, hugged Cheshire when she broke the news. She hopped on a train to New York to personally inform one of the partners there with whom she had worked closely that she would be leaving the firm. Senior members of the firm huddled to see if there was some way to keep her.

But there was no turning back. Within a few months, Cheshire began setting up shop at her large stone home in Mount Airy, where she lives with her husband and two young children. She reached out to clients — one significant nonprofit made the jump with her from Schnader — and now has a website. She financed her start-up out of pocket, and took out no loans. Her costs now are malpractice and health insurance, office equipment and other outlays, and soon an associate.

She’s confident the business will grow. These are difficult and dicey times for nonprofits. Financial pressures have intensified, and some institutions are considering mergers with other nonprofits or affiliations with for-profit businesses, raising thorny legal issues that perhaps are not handled best on a pro bono basis, or by a volunteer on the board. The beauty part is that these strategies can save money, or result in new revenue-generating ventures.

“I am not concerned in the least,” she said about the long-term viability of her practice. “I bill out at a lot less, and my overhead is a lot less.

“How lucrative is this? I don’t do it because it is lucrative. I do it to make a good living and to make these organizations better,” Cheshire said. “There is a sense of serving the public good and affecting social change and getting organizations to be better and stronger and more business-minded.”

Contact staff writer Chris Mondics at 215-854-5957 or cmondics@phillynews.com

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