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September 2004
Tar Heel Law firm Specializes In Serving Closely Held Businesses
By Ellison Clary

   Robert Norris remembers the moment he decided to be a lawyer. He was sitting beside his father at Sonoco Products Co. The other 20 people in the conference room represented Sonoco, and many were attorneys.

   It was 1972 and Norris was a week from graduating at Davidson College when his father drove him to the packaging company’s headquarters in Hartsville, S.C. He watched his father negotiate a merger of the family’s waste paper business into corporate giant Sonoco without the assistance of a lawyer.

   “I was fascinated by the deal, by what all happened and what all took place,” Norris remembers. “Although I realized how expansive and important the lawyer’s role for the public company was, my father didn’t see the need to have a lawyer for his small company.”

   For Norris, that experience led to what has become Wishart Norris Henninger & Pittman, a law firm with offices in Burlington, Charlotte and Mebane that concentrates on serving closely held (often family-owned) businesses and their owners. Norris is responsible for the Charlotte office, working closely with partner Josh Henninger. Partners Bob Wishart and Dorn Pittman run the Burlington and Mebane practice.

   The firm serves more than a thousand closely held businesses in North and South Carolina, focusing on all legal areas that affect them, from business law (including mergers and acquisitions) to business litigation, tax, estate planning, succession planning, commercial and residential real estate and family law.

   “Our focus – our passion – is representing closely held businesses and their owners,” Pittman says. “That’s the bulk of what we do.”

   But it didn’t happen overnight. After graduating from college, it took Norris a while to decide he’d work with closely held businesses. First, he enrolled in UNC-Chapel Hill’s MBA program, dreaming that he’d emulate his father by starting his own business. But the legal bug kept biting and pretty soon he was in a program that led to a law degree along with an MBA.

   A guest speaker in one of his classes discussed the difficulties faced by family businesses and Norris couldn’t resist the opportunity to corner with him afterward to talk about how he grew up in a family firm.

 As it turned out, the speaker along with his two brothers had a company near Burlington and he hired Norris part-time as a controller. Norris watched as the owners wrestled with issues that he’s since learned are typical of closely held businesses. He gradually decided he wanted to start a law firm to help these businesses and their owners.

   About that time, Wishart had just made partner at a small Burlington law firm. Originally from Vermont, he’d graduated earlier from UNC law school. A business litigator, he interviewed Norris when Norris was asked to join the firm. They became good friends and shared a vision to form their own legal practice for closely held concerns.

   “Burlington had all this manufacturing business, lots of textiles, packaging and distribution,” Norris remembers. “We decided there were too many entrepreneurs and business owners in and around Burlington who felt they had to go to Winston-Salem or Charlotte or Raleigh to get their legal services. We decided to create a firm that focused on closely held businesses and their owners, which would bring these businesses back home.”

   So Norris, Wishart and Charles Bateman, another attorney at the same law firm, formed Bateman Wishart & Norris in Burlington in 1976.

 

Filling His Father’s Needs

   Driving Norris was his vivid memory of how his father didn’t use lawyers until he was ready to document a deal and needed someone to take care of technical or tax issues.

   “I wanted to create a law firm that my father would have seen the need to retain early on,” says Norris. “We would provide not just legal advice but we would possess the business expertise and experience to become trusted advisers who would help these owners reach their personal and business goals.”

   Bateman left the firm in 1981. Prior to his leaving, Josh Henninger and Burlington native Dorn Pittman joined the inner circle. Henninger had been friends with Norris growing up in Statesville, was a Morehead Scholar at UNC, and had a law degree from Seattle University. He is now a Board Certified Specialist in Estate Planning. Pittman was a CPA with big eight experience who also had a Wake Forest MBA and law degree. His expertise includes business and personal taxation as well as estate planning.

   From three lawyers in Burlington in 1976, the firm grew to 75 employees, with 33 lawyers nearly equally divided between Burlington and Charlotte. It became Wishart Norris Henninger & Pittman in 1981. Henninger started the Charlotte office in the mid-’80s and Norris moved to the Queen City in 1992.

   “We realized Charlotte was a special place,” says Norris. “People had a can-do attitude and if you could do a job well, you’d get a chance here.” Even during the economic troubles of the last three years, the law firm has grown revenues by 40 percent, Norris says.

   Wishart vows the growth will accelerate in 2005. He cites the recent opening of an office in Mebane and points to success in client development. “We have never been so excited about our people and our potential,” Wishart says.

   For all the growth, Pittman credits a core value of the firm – forging relationships that last – with keeping him happy. “It’s so satisfying to me that I’ve been working with some of the same clients for more than two decades,” he says. “I’ve seen their businesses grow beyond all expectations – and we’ve become lifelong friends.”

   Henninger says he stays interested in his work because of the variety of the clientele. “We work with companies with hundreds of millions of dollars in revenue as well as small businesses just getting started, and it’s easy to see a common thread. All our clients are driven by an adventurous spirit, never satisfied with doing things in expected ways. They depend on us to help them reach the next level.”

   The closely held business market is huge, Norris says, and he cites statistics. Closely held businesses are 90 percent of all the companies in the United States and account for half the gross domestic product. They create 78 percent of new jobs and employ 60 percent of the work force.

   Norris’ law firm serves a wide array of business types, including manufacturing and distribution, textiles, service companies, real estate developers and contractors, and information technology operations. The typical size of business that latches onto the firm is between $10 and $50 million in annual revenue, but the range is from start-up operations to companies with hundreds of millions in annual revenue.

 

Understanding Closely Held Issues

   Norris traces the firm’s success to ‘walking the walk.’ “We are ourselves a closely held business,” he says. “We have six equity partners and nine other partners of various types. We have grown this thing and have faced the same challenges as our clients.”

   He and his partners have created what they call the 10 commandments for dealing with entrepreneurs. They include listening, communicating constantly, working proactively to earn trust, and making the legal experience fun.

   They try to simplify solutions, Norris says, and that’s an attribute Charlotte’s Alan Blumenthal especially appreciates. “Even though they’re attorneys, they talk in language that you can understand,” says Blumenthal, an owner and board chairman at Radiator Specialty Company.

   Also important is eliminating surprises. “Small business people like it better when they are never surprised as to outcomes or fees,” Norris says.

   For some of its best clients, the firm offers what it calls its in-house counsel program. For a set monthly fee, the firm will handle everything from business and corporate law to employment law to regulatory and tax matters, and will be on call at a moment’s notice.

   “They can budget their legal expenses,” Norris explains. “They know what it’s going to cost.”

 

Succession Planning Greatest Unmet Need

   Perhaps the most important service his firm offers, Norris says, is help in succession planning. Most closely held businesses struggle with preparing to transfer ownership from one generation to the next. “It’s the hardest thing to get entrepreneurs to think about,” he says. “They can’t envision themselves anywhere but working in their business.”

   Recently, a Charlotte-area client couldn’t figure how to transfer ownership to a daughter who was in the business. The owner didn’t want to slight her two brothers who were in other pursuits. The family almost sold the company with $15 million in annual sales before consulting with Norris.

   “It was a simple technique of recapitalizing the stock to make voting and non-voting shares,” he recalls. “The value transferred to each child was equal but only the daughter’s shares had voting rights. A simple charter amendment was all that was needed to meet the owner’s objectives.”

   Fifty percent of owners want to pass the company to insiders, but only 16 percent succeed in doing so primarily because of poor planning, Norris points out. “We have created our own process for succession planning which has proven very effective.”

   Norris says his firm worked out the succession plan he outlined because of adherence to another core value: open communication and listening carefully to the client’s explanation of his objectives. Then a solution can be found.

   “We make it our business to develop expertise in areas that are important to our clients,” he says. “We have regular communication. For some clients, I serve on advisory boards and we’ll meet once a quarter. That’s all part of this in-house counsel program.”

   Another core value for his law firm, Norris says, is to provide not just something that will do, but an “optimum” solution.

   Scott Hicks, president and an owner of Charlotte’s Environmental Drying Service Inc., remembers a solution that was particularly beneficial. “We had a key employee that left, and he was a minority owner,” Hicks says. “I could have been in a world of hurt, but it didn’t affect us because of the contracts and the way we set things up.”

   To make sure the firm continues to provide solutions that please clients, it has staff employees such as Maria Stidham in Charlotte whose job it is to communicate with clients and make sure they’re getting what they need. Concentrating on client relations, she is the contact who ensures accessibility to the lawyers, and says she enjoys running interference when necessary.

   Norris believes the future is bright.

   Three new attorneys recently joined the Charlotte office, a reflection of a swelling client load. New clients come primarily through referrals from current clients, CPAs and other attorneys.

   “We’ve brought in a lot of new clients recently,” Norris says. “We believe in the last couple of years we’ve probably doubled our business client base in the Charlotte office. Our goal is to be the law firm of choice for closely held businesses and their owners.”
Ellison Clary is a Charlotte-based freelance writer.
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