🎧 Listen: Castos | 📺 Watch: YouTube
This week on the Unscripted Small Business Podcast, host Jeremy Rivera sits down with Phil Crowley, founder and managing partner of Crowley Law, a boutique firm for life sciences and technology entrepreneurs.
Phil was a research physicist before he was a lawyer. Stevens Institute, then the PhD program in experimental physics at Harvard, working on superconductivity. He quit because of the math on impact.
“I could see I was getting about seven miles deep and only about a half an inch wide.”
Then Wall Street, then 30 years inside the Johnson & Johnson Law Department, about seven of them as chief FDA regulatory counsel for J&J’s biotech and high-technology products. So when he tells you where founders get hurt, he has watched it from both sides.
The $50,000 mistake was a download
Jeremy asked for the most outrageous thing he has been pulled into. Phil had one ready. A client needed to remove a non-performing partner from his LLC, and to save money he had gone and got the paperwork himself.
“He went out to the internet to get an operating agreement for his limited liability company. Only it turned out not to be an operating agreement. And he was not able to expel his partner.”
The business was a new brand of vodka. The client was supposed to run sales and marketing. His friend was supposed to run the still.
“His friend and partner got a little bit too fond of the juice and would be sleeping during the day at the plant, and nothing was getting done.”
So the client did both jobs, could not legally force his partner out, and then got sued by him for stealing money. He had put in the $50,000 that started the company. He nearly lost all of it.
Have the conversation nobody wants to have
Phil says the fix is not really legal. It is a conversation about the future, before anybody signs anything. Are you growing this to sell it, or is it a lifestyle business? How much is each of you actually putting in, and over how long? And the hard one: if we part ways, what does that look like?
“When people are in agreement and they’re all enthused about starting a project, they don’t want to think about it. It’s like getting married. And so it’s good to have a prenuptial agreement. And the prenuptial agreement is a founder’s agreement.”
He has seen what happens when nobody has that conversation.
“I’ve seen so many businesses dissolve, not because they didn’t have good ideas, but because people got so angry with each other that they did things that were in their own worst interest economically in order to spite the other person.”
We turned that conversation into a one-page checklist you can run this week: the Founder’s Prenup SOP, free, no email required.
The business plan will be wrong. Write it anyway.
Phil is not precious about the document. He is precious about the exercise.
“The business plan will be wrong. But the business planning process forces you to really think critically about who’s going to do what and what your financial constraints are.”
And on picking the lawyer, he gave the cheapest test in the episode. Call a few. Ask questions.
“If they become hostile and have the feeling that they are the expert and they can’t be bothered to talk to you, that’s a good indication that that’s not the right lawyer for you.”
If you are in tech, he also points at accelerators. He sits on the board at Ben Franklin Technology Partners of Northeastern Pennsylvania, and there are mentors and lawyers there who work with founders on purpose.
So how fast do you actually answer?
Jeremy read him the numbers from the Ignitvio Lead Response Study, which mystery-shopped 1,824 local businesses: 68 percent never responded inside 24 hours, the median reply took 68 minutes, only 5 percent replied inside 5 minutes, and 88 percent followed up exactly once and then never again. Then he asked Phil where his own firm falls.
Phil did not dodge it.
“We try to do it within twenty-four hours. We use a very well integrated CRM system called Lawmatics, which is kind of based on Salesforce, but it’s really set up for lawyers.”
What that buys him is not speed, it is that nothing falls out. One flight of emails for people who went quiet. Another for people who had a first call and have not decided. An evergreen monthly nurture for everyone who said no, because for the work he does, no often means not yet.
“We’re working on a system to have our outside receptionist call up people who sign in through the website within five or ten minutes afterwards. So we’re aspiring to the track that you have indicated, but we’re doing better than a lot of law firms.”
That is a better answer than most small businesses can give. He also mentioned the tell: prospects telling him he answered so quickly, because nobody else answered at all.
Red tape is cheaper if you design for it
Jeremy asked this one from his own client work. He has worked with an air monitoring company and figured the manufacturing regulations there came with a lot of red tape, so he wanted to know whether cutting through it is a service founders should be shopping for.
Phil’s answer came from the FDA side of J&J: pharmaceuticals, diagnostics, medical devices, all of it going through the same gate. His point was about timing, not paperwork.
“Those regulatory regimes, if they’re recognized early enough, can be designed into the product rather than having to run around and deal with them after you’ve already designed the product.”
He thinks the same thing is now arriving for AI and privacy, and that the founders who read the rules early will pay a fraction of what the ones who redesign later will.
The law firms that ban AI are going to lose
Phil was blunt about the split he sees across the profession.
“The law firms that embrace AI will be looking in the rear view mirror at the law firms that haven’t embraced AI.”
With a real caveat attached. Everyone has heard about the lawyers filing briefs full of cases the model invented, and as officers of the court they are supposed to check.
“The lawyers are so lazy that they don’t pick that up. They don’t review that.”
He expects sanctions to keep coming. What he does inside his own firm is the part small business owners can copy: he has his staff use private mode so client information never trains anything, and he tells them to go play.
“Try things and fail, because you learn more from failures than success.”
He is also open with his team about what he uses AI for himself, which is the part most owners skip.
Brett Schklar’s line, which Jeremy quoted to Phil: AI is “taking tasks that were easy away, making the hard tasks easy, and making the impossible tasks within your grasp.”
Put the stockholders last
Jeremy asked how a founder keeps a company pointed the same direction after they are gone. Phil said there is no such thing as future proofing, and then described the closest thing he has seen to it.
The Johnson & Johnson Credo, written by Robert Wood Johnson in 1943, ranks responsibilities in order. Doctors, nurses, mothers, fathers and patients first. Then suppliers. Then employees. Then the communities the company operates in. Stockholders come last.
“In 1943, when Robert Wood Johnson promulgated the Credo, he was the majority stockholder of Johnson & Johnson. So he was saying, put me last, but do all these things first, and you’ll do okay. So you’ll do well by doing good.”
The reason Phil rates it is not the wording. It is that it got used.
“If you look at the ethics and the goal statement of Enron, one of the most fraudulent companies of the nineteen nineties, you’ll see a wonderful statement of principles. But they were crooks.”
Robert Wood Johnson died in 1969. Phil’s point is that the Credo still runs meetings at Johnson & Johnson today, more than 50 years later, and that it does so because leadership kept coming back to it out loud rather than hanging it on a wall. A values statement nobody references in a staff meeting is decoration.
Pi and the Ace of Diamonds
So Phil built one for Crowley Law, and he did not write it himself. He put it to the team: we cannot have twenty-seven values, pick five most of us agree on. Then he made them memorable.
“Pi, P I, is for professionalism and integrity. And the ace of diamonds, and I always say the diamonds are my staff, is accountability, communication, and effectiveness, efficiency.”
They talk about them every week at the staff meeting, and when somebody actually demonstrates one, Phil calls it out by name in front of everyone. Two things come out of that. People stay, because they are part of something bigger than the task. And Phil gets to lead instead of micromanage.
“I mean, it’s worked for Johnson & Johnson for over a hundred years.”
Connect with Phil
- Crowley Law: crowleylawllc.com, and roughly 100 posts in the blog
- His book, Avoid Startup Failure, on Amazon in softcover, Kindle, Audible, and Spanish softcover
- His podcast, From Lab to Patient, Garage to Market
- LinkedIn: Phil Crowley
The Amazon link above is an affiliate link.
🎧 Listen: Castos | 📺 Watch: YouTube
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