Michael Donahue, Managing Shareholder, Stark & Stark
Michael Donahue, managing shareholder at law firm Stark & Stark, spoke with Invest: about harnessing young talent and leveraging AI to deliver client services. “We continue to grow because we have the resources, a tremendous amount of experience, and an exciting group of younger people interested in developing new, innovative, and more effective ways of servicing our clients,” Donahue said.
What were the firm’s most significant accomplishments or initiatives from the past year?
We had a record-breaking year, both in revenue and profitability. From an internal standpoint, it was a satisfying result. Our firm’s reach in many of our practice areas is growing at a good rate. Many of our younger lawyers are becoming market leaders in their various practice areas.
With economic uncertainty and evolving regulations, how are law firms adapting their business models to better serve both corporate and individual clients?
Law firms are at the intersection of operations and regulation in many industries. Helping businesses navigate increases in regulation is extraordinarily important in our service delivery. A central component of our client services in many of our practice areas is managing increases in regulation and ensuring that any increases in regulation do not negatively affect our clients’ operations. We try to remove that responsibility and weight from our clients.
How have recent legislative and policy changes in New Jersey impacted client needs and firm operations?
Regulation is constantly present and changing in investment management and securities. We represent clients in various aspects of those fields, and regulation affects them differently at both the state and federal levels, depending on their particular services. It’s an omnipresent issue. Our banking clients, similarly, have faced difficulties with changes in regulations, but it’s mostly in the investment management and securities areas that we see the regulatory environment impacting their daily lives.
From your perspective, what are the biggest challenges facing New Jersey businesses today?
All businesses, regardless of size, face challenges in the pool of available employees at all different skill and education levels. When New Jersey becomes too expensive to live in, or when other states are less expensive to live in, that affects the labor pool. Unless we are attracting the best and the brightest and making it affordable for those people to live here, New Jersey businesses are all going to suffer. Affordability is vitally important to ensure we have the labor pool we need to successfully deliver services for our clients.
How is Stark & Stark addressing the ongoing challenges of talent recruitment, retention, and mentorship in such a competitive legal market?
It starts with identifying exceptional, excited, and engaged legal talent and getting those folks inside our ecosystem and understanding our culture. We offer whatever we need to offer so they feel supported, comfortable, and psychologically safe inside our institution. We then identify and provide opportunities for them to learn management and leadership skills that we either provide directly or by matching them with opportunities outside the firm through professional associations. Community service is also an integral core value at Stark & Stark. Through all of these avenues, we grow future leaders by getting folks engaged early and as often as possible. This allows them to be in a position to lead as early as possible. I’ve been in my current role for 10 years, and I think it’s time for my successors to start to take the reins. The firm has succeeded throughout the generations because we have always believed that the firm belongs to the younger generations, not the older generations.
What partnerships or cross-sector collaborations has the firm developed with businesses, nonprofits, or public institutions?
Our lawyers and professional staff serve on over 100 community nonprofit boards and many professional associations. It’s important for everyone who serves here to get involved and take their time, talent, and resources and put them where it matters to them and where it can make a difference in the community. We encourage our people to get involved in the things they care about because when they care about something, they work harder and make a greater difference. Our lawyers and professional staff have been involved in, for example, leading a recent breast cancer awareness event, a YMCA 5k and charity walk, leading the New Jersey Conference for Women, and a suicide awareness event.
Could you describe the strategy behind the recent partnership with Anytime AI and how this partnership will enhance your service offering?
Anytime AI is an exciting, young, growing company in the AI space whose service offerings are particularly tailored to our consumer litigation practices. We found them to be uniquely suited to help our lawyers help our clients. Not only are they providing a product, but they are also interested in learning how we use the product and showing us how we can better use the product. There is a lot of cross-pollination, information exchange, and learning on both sides that allows us to better use generative AI in our day-to-day practice and develop models in such a way that they are leading in what can be delivered. It’s a constantly evolving area.
What are your top strategic priorities for Stark & Stark, and how do they align with the broader shifts in New Jersey’s legal and business environment?
In the legal industry, we are seeing a fair amount of consolidation with M&A. The primary reason is that resources are abundantly necessary to be able to serve client needs. Not all firms are perfect for all people. Our practice is more of a specialty boutique for several practice areas rather than a general service practice. There are things we don’t do, and we gladly pass the work onto other firms through our partnerships. We continue to grow because we have the resources, a tremendous amount of experience, and an exciting group of younger people interested in developing new, innovative, and more effective ways of servicing our clients.
