At first glance, John Fallone looks a brute of a man. Near six-and-a-half feet tall and thick with muscle, the lawyer, Silicon Valley startup co-founder, Duke Law LL.M. grad and now startup law firm co-founder looks more at home as an extra in “John Wick” than attorney and entrepreneur. In fact, given that Fallone was once knee-deep into Secret Service training, he’s probably got some of the experience to back up the “movie bad guy” look.
His partner Katelin Kennedy is just as remarkable. The attorney, former litigator and de facto marketer might be bite-sized, but the glare she gives when someone in the room says the wrong thing belies any impression that she’s the “good cop” of the pair.
The sharp-eyed glances and quick tongue make more sense once Kennedy mentions her father was part of the NCIS—among other things—with his hands in high-profile cases like the murder of Jon-Benet Ramsey (spoiler alert, Patsy did it).
Kennedy is the shark here—the more calculating of the pair.
Fallone and Kennedy like to brand themselves as atypical lawyers, rejecting the idea of “white glove service” and instead opting to get their hands dirty. That’s the spirit of their new HQ Raleigh-based law firm Fallone SV, focused on transactional law for startups and small businesses in North Carolina and California.
While they’re fresh faces working in a field based on reputation and prestige, they hope to make up for it by rejecting the bureaucracy of larger firms and getting in the trenches with the businesses they work with.
Kennedy likes to measure her success with one simple rule, “If the client is growing, we’re growing.”
From chance meetings to drawing up plans
Fallone, who moved to the Triangle from San Francisco last year, explains the new partnership as “serendipity”. In what may be a first, the business started after a chance meeting at a TJ Maxx.
Fallone, a self-proclaimed fitness addict, started up a conversation at the store with a guy he’d seen at his local gym. The man turned out to be the significant other of Kennedy, a woman Fallone had heard about in legal circles.
A connection was made soon after, and the two lawyers decided to meet and chat about Fallone’s idea for a new sort of law firm. Soon after, Kennedy came back with an organized multi-point plan for how they could make things work.
Fallone was sold, and the pair spent the next eight months working with their individual clients—Fallone with San Francisco-based companies, Kennedy with NC businesses—while they secured the necessary certifications to launch a firm.
That happened only in the last two weeks. Now Fallone SV is a legal entity with a specialty in startups.
But the partners certainly aren’t alone in focusing on a niche in the legal market. In fact, niche practices are growing in popularity as larger firms grapple with competition from virtual law offerings and other legal tech trends. According to the 2017 State of the American Lateral Law Firm Market Report, the job market is most promising for specialists—for lawyers who are experts in their field.
Fallone and Kennedy believe their major selling point is their focus, which comes from experience working as or with entrepreneurs.
The good, bad and ugly of high-pressure, high-growth
Fallone became an entrepreneur after stints in real estate and law school (which he did, eventually, finish). After earning an undergraduate degree in housing, he took a job managing a high-rise apartment complex in Washington D.C. He quit just as the real estate bubble burst to get a more recession-proof degree at the Antonin Scalia Law School at George Mason University.
Never one to stay in one place for too long, Fallone took a break from law school to pursue a startup idea at the premiere Y Combinator accelerator in Silicon Valley in 2012. He and a team got some early traction for their business messaging company called SendHub, a sort of Slack before Slack was Slack. But despite raising $10 million from investors and growing the business to an acquisition by Cameo Global in June 2016, Fallone wanted out.
He was sick of splitting his time between the business, taking law classes at Santa Clara Law, working legal side-jobs and spending time with his wife and children over 65 miles away. He’d spent too many nights sleeping on the office couch and “touching toes” with whoever else was sharing the sectional that night.
With his wife and children the No. 1 priority, he wanted to leave the hustle and bustle of Silicon Valley for a place where he could raise a family. Fallone considers himself a “southern boy”, and the Carolinas his home.
And so by summer 2016, he’d moved to the Triangle to start an LL.M. program at Duke Law School. He’d landed a job as managing director of the new Duke Law Tech Lab and helped launch a nonprofit tech industry lobbying group called Lincoln Network. After starting his licensing process in North Carolina and putting down roots, it was time to get to work on setting up a practice.
Fallone wanted to put his time as a founder in a high pressure environment to good use. Growing a business to acquisition meant he’d seen the good, the bad and the ugly. Over time, he became particularly passionate about helping others get through the ugly.
He thought a law firm targeting startups could offer, among typical services, both legal and personal counsel on issues like founder disputes. Fallone spent years in a high pressure, high growth, high risk business and understands what that can do to founders and their relationships. How to leave, why to leave and the legal ramifications of abdicating from a business agreement are some of his less marketing-friendly, but most useful, skills, he says.
But he knew he needed a partner to complement his unique experience and skill set.
Overcoming “lack” of experience
Kennedy’s path to Fallone SV is a more normal and pragmatic. After finishing college with the intention of pursuing a physical therapy career, she became frustrated with the hard ceilings inherent in the career path and enrolled at Wake Forest Law School in 2011.
After a couple of years working as a legal intern for the U.S. House of Representatives and an associate at Teague Campbell Dennis & Gorham, Kennedy was sick of the bureaucracy of traditional firms, likening her experience in the industry to “running on a hamster wheel”.
Just as she was working to strike out on her own, Fallone had his chance meeting with her now-fiance at the discount clothing emporium.
While the two have only officially been in business together for a matter of days, Kennedy is excited about the potential for the practice.
“Without decades of experience to rest on, we know we have to evaluate the details more closely and work harder to make sure we aren’t overlooking any better solutions or hidden risks,” she explains.
In fact, the firm’s relative “lack” of experience is becoming a good thing, she adds. “It makes us more thorough and has helped us develop an approach of never getting comfortable with our existing knowledge.“
Keeping costs down, while hedging bets
Clients are joining them nonetheless. Joshua Miller, founder of the AgTech startup Farmshots, describes the pair as a “deadly” combination. Missing from past relationships with lawyers, he says, “was the ability to understand the contexts that we come from as founders.”
“I admire so much how they want to help people like me who are on the rise with their business and walk me through a lot of ‘firsts’,” says Headbands of Hope founder Jess Ekstrom.
Both Miller and Ekstrom stress that the pair doesn’t just help with questions laser-focused on their specific subgenre of transactional law. When Miller was looking to break into South American markets, Kennedy spent a day walking him through Brazilian legislation.
The pair say they can offer that time and attention at rates affordable for startups because they skimp on the expensive office space, client lunches and print or digital advertising tactics typical at larger firms. And one of their main selling points is the automation or commoditization of the more mundane aspects of the job, like filling out certain forms, billing and invoicing and completing basic tasks.
Fallone immersed himself in the legal tech field working at the Duke Law Tech Lab, and so the firm is experimenting with blockchain and “smart contract” technology as well as AI tools that review legal documents. They’re also helping clients navigate a variety of open source legal automation tools, like automation of privacy policies and incorporation, and term sheet and convertible note generators.
Additionally, and as Fallone will be happy to talk your ear off about, the pair is working to master the “legal implications surrounding cryptocurrencies and the ICO (initial coin offering) market.”
By cutting menial tasks—for themselves and clients—they’re hoping to spend more time working directly with clients to solve problems and save both parties time and money. They didn’t share specific rates.
The partners are committed to growing the firm’s local and San Francisco client base from dozens to hundreds. They believe they’ve got the diverse and business-centric backgrounds, connections to the local startup scene and the energy required to serve this high-growth market.
And when asked where they might find themselves in five years, Kennedy said that while “five year plans are bullshit”, they hope to still be in the trenches, hedging bets on businesses they believe in.