BY SEAN MCFADDEN
JOURNAL STAFF

            “Timing is everything in life,” said Jeffrey Ross, recalling a lunchtime conversation he had two years ago with his long-time friend Jay Fialkow, a prominent and newly retired member of Boston’s legal community.  During that conversation, Ross, a former CEO who had overseen the successful turn-around and eventual sale of three companies, proposed that he and Fialkow join forces on a new strategic-planning firm focused on midsize businesses.

            Conventional wisdom would suggest that the two men could afford to rest on their laurels, but by the end of their conversation, it was clear that neither was ready to join the lunch-and-links set full time.

            “We both felt very young at heart,” Fialdow said.  “Most of our friends who’ve retired, retired because they didn’t like what they were doing.  All they wanted to do was go out and play golf or travel around the world.  Nothing about their lives interested me.  I like the action of the business world.”

            Fialkow, now 74, had amassed 48 years of legal experience, making his mark chiefly as senior partner at the firm of Kaye, Fialkow, Richmond & Rothstein, from 1951 through its acquisition by the Wall Street firm of Stroock & Stroock & Lavan in 1996, until his retirement in October 1999.  Additionally, he served as assistant attorney general of Massachusetts under former attorney generals Edward Brooke and Elliot Richardson, and as chairman of former Gov. William Weld’s privatization committee.

            And Ross, now 57, had served as president and owner of Stoughton-based Thayer Pharmacies for 17 years, turning it into a $60 million business with 31 stores and 600 employees.  In perhaps an even greater feat, he had subsequently transformed Canton-based Pet Supply Depot from a “failing late-state startup” to a 17-store chain with $31 million in revenue.

            And so, in October 1999, the partners formed RossFialkow Capital Partners LLP, renting two offices on the third-floor suite of the law firm of McDennot, Quilty & Miller LLP at 21 Custom House Street in Boston.  Theirs is a streamlined, two-man operation – the better, said Ross, “to keep overhead down, so that we can charge lower fees.”

            Fialkow noticed an immediate difference in his work life.  “I was used to having two secretaries and 35 lawyers running around for me, so this was a dramatic change.”

            Additionally, he said, “We don’t charge for time – which was a big change for me.  And if a client can’t afford it, we’ll look at other options, like taking a stock option.”  With 10 to 12 clients in place, Fialkow says his firm managed to generate $500,000 in revenue in 2000.

            Focusing on a relatively small, select group of midsize businesses in the $10 million to $100 million range, RossFialkow offers services pertaining to the sale or partial sale of a family or privately held business, as well as investment banker assistance, business-plan development and the creation of advisory boards – for a fee of “a retainer plus $2,500 to $5,000 a month.” said Ross. 

            And while Fialkow noted that “we can help midsize businesses get financing, and we can also help them to get sold when the market is hot,” both men insisted that they are neither consultants, in the traditional sense, nor liquidators.

            “We don’t consult.  We mentor.  We coach.,”  Fialkow said.  “We don’t try to compete with firms like Bain & Co., and we don’t try to compete with law firms.”

            Added Ross, “We don’t do any actual selling.  We’re not a slash-and-burn company.  We don’t do what very competent turnaround companies are capable of doing.”

            Instead, given their prodigious contacts in the business community, they act as middlemen for clients in such industries as consumer goods, manufacturing, and technology, looking to connect with the appropriate lawyers, accountants and bankers.  “We’re good at synergy,” said Fialkow.  “We’re able to bring two or three very different firms together.”

            Recent projects for RossFialkow have included handling due diligence for the clients of a quasi-public organization and helping the members of a family-owned business weigh options related to the possible sale of their business.

            Paul Karofsky, executive director of the Center for Family Business at Northeastern University in Boston, has referred several people to RossFialkow in the past.

            “They’re both good guys with quality reputations,” he said.  “Their strengths come from life experience.  They’ve been there, done that.”

            And, Karofsky noted, the partners could find themselves busy on the sellers’ side of their business, given the current economic climate and changes in attitudes about family-run companies.

            “Many of our businesses are exploring the option of sales because they may not see their children as the next likely leader of their business,” he said.  “Increasingly, many family businesses are choosing to own, but not necessarily operate, their business.”

            Fialkow himself cited a recent client situation in which two brothers from a successful business had sought his advice because, “one brother had fallen out of love with the other.”  In some matters of familial dispute, Fialkow stated, resolving the matter ultimately doesn’t require much work on his part.  “Often times, the solution comes from the client.  We try to be intelligent listeners.  We’re counselors and coaches, and we try to help them.”

Reprinted with permission of Boston Business Journal. ©2001, all rights reserved.

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