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SBA Express helps former Air Force medic open new Omaha law partnership
The two partners had a great idea and needed a little capital to make it happen. So they got a bank to loan them the money, leased an office, made some improvements to it, and jumped into business.
Wait. There's a little more to the story than that.
Always had a big heart to help the helpless
Let's go back to when John F. Carroll (above, left) was a boy, long before he shook the hands of his law partner, Steve Watson, to celebrate their new practice, before he started raising San Clemente Island Goats, before law classes at Creighton, before nursing school, before he was a star on the CBS reality TV show "Survivor," before he enlisted as a medic in the Air Force and served for nearly three years at Scott Air Force base near St. Louis.
Back to when he brought home wounded dogs and birds home to nurse back to health, back when he started an Explorer Post with a few of his grade school friends at the Henry Doorly Zoo in Omaha. That's where the seed was planted, an idea that Carroll would spend his life as an advocate for those in need.
After he left the Air Force, Carroll headed off to Los Angeles to work with AIDS patients at the second-largest clinic of its kind in the country. This was long before the miracle cocktail of drugs which today allow people to live with the syndrome; the best Carroll could do was to offer comfort and ease their suffering. But after eight years, during which he raised money and devoted time and effort to various AIDS advocacy organizations, the work took its toll.
Carroll returned to Omaha where he worked as a sales consultant and corporate trainer for Qwest Communications; in return, the company helped him pay his way through Bellevue University and a summa cum laude in criminal justice, and where he delivered the senior commencement address. But he wasn't done with school. He then finished what he had started in Los Angeles, his nursing degree.
"As a nurse, I watched the health care system go from having time for a bedside manner to a corporate machine," Carroll said. "And in that process, I saw people getting hurt, people without recourse, people who needed help. All I wanted to do was give them a voice." So he applied to Creighton's law school.
But Carroll made a small detour in his law studies. He was asked to join the cast for the fourth season of "Survivor" on the island of Marquesas in the South Pacific. Cast by the show's producers as one of the bad guys, Carroll relates, a decade later, the tale of his time spent in the tropical elements for a chance at $1 million. He didn't win, but he did last 24 grueling days in the game.
He returned to Omaha and as he finished his law studies, he worked as a Legal Nurse Consultant, using his experience in medicine reviewing documents and records for a local firm, and later joining as a full-fledged plaintiff's medical malpractice attorney.
How the partnership came together
At the same time, Watson (above, right) was working at a white shoe law firm in downtown Omaha. Every so often, the two would meet at legal conferences. "We were like two dorks always sitting up front and taking notes. As time went on, we'd get together and talk about our own cases, shooting ideas back and forth," Watson said. Of such conversations, a natural professional friendship and soon a business partnership was born.
That brings us to April 15, 2011. Carroll had just been let go from his firm, and called Watson to discuss a potential client's case he was considering taking on. The conversation turned from the case to Carroll’s decision to strike out on his own. That's when Watson, with 30+ years with his firm, decided to do the same, and join his friend.
"When you have same desire and drive as the other person you can build on it," Watson said. "You can try new things, while more established firms look in the rear view mirror, smaller firms are more willing and able to embrace the rapid changes occurring around you. Being on your own is more fun."
A lunch and a handshake later, a new partnership was born. But it is one thing to form a partnership; quite another to open the doors and turn on the lights. And for that, the two first turned to Cliff Mosteller at the Nebraska Business Development Center in Omaha for some business plan advice. Mosteller offered advice to make their plan more "bankable," including work on cash flow projections and then correcting some line items; he then provided a list of bankers who might look favorably on a start-up law firm.
Turning to the SBA to make it all happen
One of those was Katey Lenczowski at Enterprise Bank, whose bank had experience financing plaintiff's attorney firms. She was brought aboard due to her experience with the SBA including her work with the Nebraska Economic Development Corp. (NEDCO) working deals through the SBA’s 504 program. Enterprise Bank had done very few deals over the years with the SBA, but when Lenczowski joined the bank, she worked with Lead Lender Relations Specialist Mike Niehaus to ensure the lender was signed up for the complete list of SBA Express programs.
Upon learning that Carroll was an Air Force Veteran, Lenczowski knew the Patriot Express program, which allows for up to $500,000 for a project with a 75 or 85 percent SBA guarantee, would serve to provide the firm with a loan for $20,000 for computer equipment and a larger amount for a line of credit.
Lender Relations Specialist Suzanne Stearman from the Nebraska District Office also played a role, helping sign up the bank to use the E-Tran system to file applications electronically and receive a quick response from the Sacramento processing center, and Stearman, along with Niehaus and Deborah Wilson on the lender relations team, answered the banker's Patriot Express program questions.
"We have just three commercial lenders in our bank, and we do most of our own work," said Lenczowski, who never had completed a Patriot Express loan before and needed the streamlined application to complete the deal quickly. How quick? The partners went from their handshake April 15, to closing their bank deal May 13, to signing the lease to their office at 160 Centre Place on 160th St. and West Center Road on May 17, to opening their doors June 6.
Understandably, Lenczowski is a strong supporter of small business. She owned a coffee shop in West Omaha for about five years, and received a 7(a) loan herself through the SBA. "It helps me be a better banker because I can relate to challenges of starting and owning a small business. It really does make me feel good to put people in business."
Continuing to help those in need
As plaintiff's attorneys specializing in medical malpractice, Carroll and Watson consider themselves investigators, examining suspicious injuries and deaths as part of their role in oversight of the health care system.
"The problem is when great care doesn't go that way," Carroll said. And other than product liability and mass torts, he added, "often medical malpractice cases are the most expensive cases to litigate, due to the need for practicing medical and nursing experts and other resources."
These cases sometimes take a year or longer to reach a verdict, Lenczowski said, and the line of credit will help the firm survive those long gaps between payments.
"A $5,000 or $10,000 medical bill due to medical negligence means the patient is left holding the bag," Carroll said, "That often leads to ruined credit, or a second job they'll have to work for the next five years to prevent bankruptcy. And those are the lucky ones that survive or are not permanently injured. All I want to do is give a voice to those injured and to help the families of those killed by medical mistakes."
"Without the Patriot Express program," Carroll said, "I don’t know what we would have done. Certainly, the process would not have been done as quickly. I was working out of my farm kitchen, surrounded by fresh farm eggs and medical records. We had deadlines to meet if this firm was going to survive and I needed a place to meet them." He told the Omaha World-Herald that the program "rescued" him from a potentially disastrous situation.
"That's what it's designed to be there for, for the veterans," he told the newspaper. "All you have to do is access it.”