Q&A: Henry Kalus – "There's no point having lawyers who work from 7 o'clock in the morning until 10 at night and who have no private life and are miserable"

In this Q&A, Kalus Kenny Intelex founder Henry Kalus explains why putting people before profits is crucial for a firm’s success; why his embrace of flexible work practices is a throwback to his childhood; and why there are synergies between owning race horses and running a law firm.

You recently celebrated the 25^th anniversary of your firm after setting it up in 1993 with partner Jonathan Kenny. What does such a milestone mean to you?

“It means that the approach we took 25 years ago, of putting people first, has worked.  I’m proud that even though we grew from two to 40 people, we maintained the firm’s values. I’m proud of the long-term relationships we have enjoyed with clients. I’m proud of the fact that the environment among staff is so collegiate, that everyone is in it together, that everyone works hard but has fun. And I’m really proud that Jonathan and I have been together for more than 25 years. For us, it’s been like a marriage – it’s not that we don’t ever disagree, but we genuinely want the best outcome for each other. All that is an important model for the younger partners of the firm.”

How have you achieved such collegiality?

“For a start, we’ve grown the firm off the back of good-quality people. We’ll hire quality people, even if we don’t have a need, or their skillsets aren’t in the right area, because we believe we can develop good people and find a role for them. But it all starts with the character of the person. This is a values-based business and if we talk about those values enough and live them, it works. For example, we’ve never been interested in bringing lawyers into the firm because they had X million dollars in fees, which is something that happens in large firms. We’ve always believed that you build the practice from having good people, but if you just bring in people because of their fees you won’t have the synergies you need. Without those synergies, what holds you together? Without those synergies, we wouldn’t have had a successful business for 25 years.”

Kalus Kenny Intelex has made its name in the property sector and you have been a trusted advisor to many of Melbourne’s most successful developers. But the firm also handles matters relating to commercial law, intellectual property, litigation and dispute resolution, employment law and estates law. How do you determine your target markets?

“Our branding has been strongest in property, but we’ve made it clear that we do much more than that. We see it as important to be really well-rounded lawyers for our clients. We never wanted to be lawyers who just did property because to be a trusted advisor to enterprising clients you need to be both an expert in a field and broadly capable as well.”

What else is crucial to long-term success?

“At our firm, I’ve never allowed profit to be the No. 1 driver. Yes, we all need to make a profit and a living, but I’m a real believer that making profit the No. 1 driver encourages bad practices. Look at the banking royal commission. Any organisation in which the share price is the No. 1 driver must focus on money and therefore encourage poor behaviours. So we’ve said from day one, ‘Let’s look after our staff and our clients and do what we do as well as we can do it, and then see if profit follows’. And it definitely has. We measure success in qualitative ways, which is around having a really happy client, having longevity with staff, who develop as people and professionals, being proud of handling a matter really well, and getting a great outcome for a client. Success is ultimately about being proud of your behaviours. Success is about seeing staff look after a colleague in a crisis. Success is also about being known as high-quality people and professionals.”

So people come before profits?

“Any business should work for its staff as much as the staff work for the business. People deserve freedoms. We work so hard in the law that it’s important that your professional life fits into the life you want outside the firm. There’s no point having lawyers who work from 7am until 10pm who have no private life and are miserable. Once we have confidence in our people, we tell them to practise law in a way that works for them. So if you’re bringing up young children and you want to come in late, do that. If you want to work from home, then work from home. If you want holidays, have them. If I think back to 25 years ago when I was a partner at a large firm, I remember that the partners were in their own world and the culture was competitive in a way that I thought was unproductive. A lot of them had young kids and you’d never find anyone leaving work to go and watch their child play sport and come back to work and talk about it. Whereas when I grew up every time I played football or competed in athletics I’d look up and I’d see my dad watching – and this was often during the week. I wanted that for my life. I wanted to talk proudly about my kids at work.  And I want that for our staff. It’s a whole-of-life approach.”

So you adopted a flexible approach to work long before it became a selling point for modern firms.

“Definitely. We were doing it without giving it a name. Of course, you can’t have every staff member coming in at 11am and leaving early, but if you know what people want to do and how they want to lead their life you can make it work really well. The people who make it here are so respected and valued and we know they are going to contribute. We don’t have to worry about them clocking on and off or hitting financial targets. With flexibility, a lot of the larger firms are talking the talk, but I’m not convinced that they’re really standing behind what they say. With a lot of younger lawyers there’s almost this robotic model of what they should do to become a partner and it involves working enormous hours, exceeding financial targets, marketing and specialisation. We say to staff that if you want to be involved in marketing, then we’ll help you. But if you don’t, then no problem. Not everyone has to find 10 new clients a year.  We value staff for the different things they bring to the practice. It’s so important for firms to find a way for the firm to work for talented people who have other priorities in their lives. If you think you should get seven or eight billable hours out of every lawyer, every day, irrespective of what’s going on in their lives, that’s a recipe for disaster.”

What do you expect of your lawyers?

“We expect them to practice law the KKI way. That means being really valuable to clients. One thing being lost in the practice of the law is that a lawyer should give a client his or her opinion rather than being a fence-sitter. To be really valuable you need to say to a client: do this or do that. It’s not about presenting options and saying, here you go, you choose. Clients pay lawyers a fortune. They want an opinion and they are entitled to it. We also expect our lawyers to earn the respect of counterparts in other firms. To be honourable and pragmatic. To always find sensible solutions rather than escalate disputes.  Here at KKI we are problem solvers.”

You must have had some failures over the years. Can you tell us about them?

“Of the lawyers who haven’t worked out for our firm, many of them had been lawyers in large firms for too long. Here they failed to win the respect of the staff and, irrespective of what the partners think, if lawyers don’t win the respect of the conveyancing clerks, the PAs, the accounts team and the receptionist, then they don’t survive. If you come in here on a high horse and don’t treat people with respect, you don’t survive. We have had success with people who have been trained well in the larger firms, but who haven’t been there too long, because it can become difficult to change their way of looking at law and life.”

On the back of a merger with Sven Burchartz and some of his colleagues five years ago, Kalus Kenny Intelex now has a team of about 40 people. What impact did that merger have and what are your growth plans?

“It gave the firm great impetus and fresh ideas. Growth is not something we’ve sought, but it’s been a by-product of what we’ve done. We’ve never wanted to have the issues that larger firms have, and even with 40 people maintaining consistency of culture can be a challenge. Forty is a very nice number, though. In our early days we found that some clients shifted to bigger firms even though they loved us. They all came back, but I was determined to not let that happen again. So basically I took the view that if I ever met anybody I liked and thought they’d be a good addition to the firm, then I’d bring them on, whether I needed someone or not. The truth is that when you need someone it takes a long time to find them. Our best staff are people who joined us when we didn’t need them. A firm has to be sufficiently resourced to handle the bigger cases. You can’t do it without a team. It doesn’t have to be a big team, but it has to be a quality, dedicated team who are all on the same page. We have that, and in a number of different areas.”

Sven is a motor racing driver and handles private clients in that sport, while you have been involved in horse racing through your part ownership of successful horses such as Stratum Star and Native Soldier. What’s with the sporting theme?

“My interest in horses is a lovely distraction and I may well be Australia’s luckiest horse owner, having owned just two and with both being successful. I bought Stratum Star on a whim for fun and, despite everyone telling me that it just costs money having a horse, it won two Group 1 races and the Magic Millions in Queensland and was then sold to stud. I’m not a gambler and never bet, but I just love the journey and it dovetails into my philosophy about work and life. It’s really important to know why you’re doing something. I know why I have a law firm. It’s not because I was in love with the law or always wanted to be a lawyer. It’s because I found a way to be valuable to people and to enjoy working with people. I found a way to be proud of what I do, and provide for my family as well. I went into horse racing with Stratum Star with friends, knowing we were doing it for the journey, for the experience, to share something.  We pretty quickly got a million-dollar offer from an overseas group. A number of people who’d had horses before said that you don’t get a million-dollar offer very often for a horse, so you have to take it. But I fought like crazy not to sell the horse because we didn’t do it for the money; we did it for the journey. In the end everyone agreed it was for the fun and the journey and so we kept the horse. Anyway, in its next race, Stratum Star was abysmal and I wasn’t very popular, but he went on to have great success and we had great times.  Even with the law firm now, all the decisions we make are about what will make us proud of the firm and happy in our lives. I’ve always had clarity that it’s not about the money, it’s about enjoying life, and being collectively proud! It’s easy to make decisions when you are clear about why you do something.”

www.kaluskennyintelex.com.au