William Cobb, President of the legal consulting firm, WCCI, Inc., which consults in 55 metropolitan areas, finds Norton's practice atypical of today's corporate practice.
Carl L. Norton is an extraordinary man. Packing three degrees into his briefcase in the time it takes some to obtain one, Norton has risen to the pinnacle of the legal profession with the same level of energy. Norton's intensity is so evident, it takes on nearly a physical presence in a room.
Described as a "lawyer, accountant, business advisor and quasi-investment banker," Carl Norton wears any number of hats throughout the day. In the process of wearing those hats as managing partner of the growing Houston-based law firm Norton & Blair, he might well be redefining boundaries for legal practitioners in the 1990s.
"Norton & Blair is attempting to redefine the term 'major' law firm. Expanding our services and offering contingency fee arrangements, instead of having a large number of attorneys is a major way for us to compete with the name brands of the legal industry."
By being involved in an array of corporate finance transactions and offering clients contingency fee arrangements for acquisitions and financings, N&B has rapidly gained the interest of the corporate and venture capital community while raising the eyebrows of their legal brethren.
A Houston resident for the past 17 years, Norton is a former CPA (obtaining the third highest score in the nation on his CPA exam) with roots in Philadelphia and Wall street who holds both MBA and JD degrees. At first blush, one might consider that Norton possesses a curious inclination for the strict regiments and ivory-towered meditations of academia. Instead, Norton is guiding the members of the firm's corporate/securities department in pioneering the expansion of the traditional services offered by a corporate legal practice - and he's found time to become a leading figure in the venture capital industry.
The requirements? A vision capable of alternative solutions. Norton is, in fact, an unorthodox, creative innovator.
William Cobb, President of the legal consulting firm, WCCI, Inc., which consults in 55 metropolitan areas, finds Norton's practice atypical of today's corporate practice.
"When someone goes into a deal with him, the greatest distinction is that N&B assumes risk," says Cobb. "Norton's practice fits the client's value system better. Value is added by getting the deal done. If you're not adding value, the client will wonder why you're involved."
Norton believes that offering expanded services and alternative fee arrangements, normally the province of litigators, is a step into the industry's future.
"Norton & Blair is attempting to redefine the term 'major' law firm. Expanding our services and offering contingency fee arrangements, instead of having a large number of attorneys is a major way for us to compete with the name brands of the legal industry," says Norton. "It's the value added that counts. We sit down and structure a client's deal as opposed to coming in late in the game and just papering it up. The contingency fee arrangements conveys to a client the fact that we are willing to take a risk with him. That makes us different," Norton concludes.
John Christman, president of Whitestone Products, Inc., a New Jersey-based manufacturer of disposable products, found the contingency fee attractive and Norton's background essential to the $25 million acquisition of a NYSE company he and Norton engineered. "Carl counseled us beyond the scope of our expectations," says Christman. "He was in the trenches from the very start and structured the deal to the end. Without his guidance, we wouldn't have completed it."
Christman believes that Norton's knowledge of accounting and finance created a distinction from the opposing counsel. "Carl's understanding of the accounting and financial worlds gave us a distinct comfort level at the negotiating table. There was a definite irony in the fact that a major New York law firm simply couldn't keep up with his performance."
A contingency fee arrangement was agreed to between Christman and N&B in which N&B would write off a substantial amount of fees if the transaction failed, or mark up fees if it succeeded. "That's how N&B will assume risk. If the transaction is successful, the firm will also reap the fruits of the client's success," says Cobb.
A MULTI-DISCIPLINED APPROACH"There are a number of $10 million to $100 million revenue companies out there with in-house counsel, but who still need expertise on complicated financial transactions. I think I foresaw a need for someone like myself who brings a number of disciplines to the table," says the energetic Norton.
"That's when I became interested in representing venture capitalists. I thought by background in accounting, finance and law would offer an attractive commodity to the growth companies."
In late 1982, Norton began courting the venture capital market in Houston. "I sensed that there were quite a few attorneys who didn't understand corporate finance to their client's satisfaction. That still appears to be true too often," said Norton.
Interestingly, Norton offers this comment while the number of Houston area attorneys continues to mushroom. According to the Houston Bar Association, more than 13,000 attorneys practice in Harris County alone. Now with more mergers occurring with out-of-town and out-of-state firms, the more companies expanding their in-house counsel, law firms competitively vie for business.
"My approach differs from the traditional corporate practice in that I'll often be involved in selection of target companies in acquisitions, due diligence investigations, search for additional capital, and structuring the terms of a deal. Most corporate lawyers don't get involved to this degree."
This strategy is apparently paying off.
Fred Ziedman, president of Houston-based Enterprise Capital, a venture capital company and a leading venture capitalist says, "The seeds have been planted for somewhat of an explosion in Houston's venture capital market in the 1990s. We have a good labor supply, good distribution reputation, a low cost of living, the Texas psyche...and probably no one in Houston has more venture capital work than Carl Norton. He went after the venture capital market in a very giving way in the early 1980s while others ignored it. Now, where there's a deal there's Carl," Zeidman adds.
Norton's practice has developed to the extent that his schedule is often filled with venture capitalists who previously witnessed him in action representing the other side of the deal.
"One of the great things about venture capital work is that it leads to other transactions - public offerings, private placements, commercial loans, real estate and even litigation," says Norton.
Norton has a penchant for doing things differently. "I often do things differently or more aggressively, but that's what makes Houston a great place to do business," explains the 48 year old managing partner who still sets the pace at the office with twelve hour days, six days a week. That philosophy has also helped N&B grow from a small law firm founded in 1982 to a midsized innovator with offices in Houston and Austin.
"The firm tries to look at different and better ways to consummate transactions. We try to think in terms of what a client's needs are and how to remain cost-efficient in satisfying those needs," Norton says.
Transactions aside, he organized the "Venture Capital Breakfast Group" five years ago with Ernst & Young, an international accounting firm. These meetings were organized to introduce out-of-state venture capitalists to their local counterparts and assist in creating a greater flow of deals. National firms such as Clayton & Dubilier, Morgan Stanley Venture Capital Fund and Alex. Brown & Sons have presented their strategies at the breakfasts.
Norton has also made a habit of forwarding parts of business plans to financing sources domestically and abroad without expecting a fee - an unheard of practice among many traditional attorneys. But then, what would you expect from a man like Carl Norton?
"I'm not a genius," he hesitates, "but it's not genius that does it. It's working harder and longer. That's what I do, work harder and longer and think in terms of meeting client needs." Norton's eyes project intensity as he adds, "The busiest people get the best work. It's that simple." We at dba feel that highly-motivated genius is probably closer to an accurate description of Carl Norton