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As a partner at Reed Smith, Bob Gallo managed multiple deals, each worth tens of millions of dollars, while at the same time juggling numerous clients, conference calls and deal closings, and directing the many associates under his management.
Moving in-house to become the general counsel of a private company should have made his life easier, right?
Wrong.
At the beginning of this year, Gallo left Reed Smith to become executive vice president and general counsel - and a law department of one - for MED3000 Group, a Pittsburgh-based national health care management and information technology company that helps physician practices, hospitals and health care systems improve the delivery of health care services.
"We are helping our clients improve health care by managing them more efficiently and allowing them to do what they do best - that's to provide health care," explained Gallo. "By looking to MED3000, they don't have to worry about the business aspect of their medical practices."
Leaving a successful practice at a reputable and well established law firm for a company with no legal department was an entrepreneurial leap of faith for Gallo, who became a partner at Reed Smith in 2004, at a time when making partner was becoming more difficult. In fact, he was the only associate to be elevated to partner in the firm's Pittsburgh office that year
"It was tough leaving Reed Smith," he said. "I loved it there. It's a great law firm. But I couldn't pass this opportunity up. At the law firm, I worked on big deals, but I primarily implemented the business decisions of my clients. I'm in a position now where I am part of the decision-making process from the beginning. I take it very seriously and it has been a rewarding experience."
While he was at Reed Smith, Gallo provided outside legal counsel to MED3000 for more than five years. As MED3000 grew and began acquiring companies, he became the company's de facto general counsel, he said. About two years ago, the management team approached him to join them on a full-time basis.
"As they kept growing, I became more and more excited about the direction they were going. I was working so closely with senior management, that they approached me about coming over to be their GC," said Gallo. "Once I saw the chance to be part of the senior management team at a well respected, fast growing company and the opportunity to get equity in the company as part of my compensation package - which law firms can't offer - I thought it was just too good to pass up."
Gallo handles the legal affairs in-house for the company - which now has 55 employees in its Pittsburgh headquarters and nearly 1,500 employees overall, primarily located in Florida, California, Connecticut, North Carolina and Arizona - including mergers and acquisitions, as well as compliance with the Heath Insurance Portability and Accountability Act (HIPAA). Gallo says he relishes his role because he is not just the company's GC, but also a member of its executive management committee, along with the CEO and the company's two other executive vice presidents.
"We run the day-to-day operations of the company," he said. "Being on this committee, I am much more involved in the business aspects of the company. Although I do enjoy the legal work and that's primarily what I do here, it's exciting to have input into business decisions. That was what initially drew me here."
The role of solo general counsel is not without its challenges, said Gallo. As a partner in a large private law firm, Gallo dealt with the sophisticated and high-level legal issues, delegating smaller issues to associates. At Med3000, he does not have a department of associates to rely upon. Additionally, like many small companies, MED3000 tries to keep its costs down, so he must be careful about when he picks up the phone to enlist the help of outside legal counsel.
"I just do it all at this point, because that's how this management team operates," he said. "We're lean, and it forces us to make efficient decisions. I'm more hands-on and, like everyone else at the company, I roll up my sleeves and dive into it. I think I've worked harder here in the last six months than the past year at Reed Smith, but I'm OK with that because I'm invested in it and it's more rewarding."
Being lean also forces everyone to pull together to get the job done.
"The management team will do whatever it takes to get the job done," said Gallo. "I'm not above anything. That's why we do so well. We do not have a lot of corporate fat and overhead. Everyone pitches in."
Since MED3000 is experiencing a growth spurt, Gallo's main responsibility is to lead the acquisition team, taking a leadership role in identifying acquisition targets and leading the due diligence and integration teams.
"I'm on the front lines meeting with the principles of the targets, making the decision along with the other executive team members whether or not it is a good acquisition target, and deciding as a team on the terms of the transaction," he explained. "Then I'm principally in charge of completing the transaction. Not only the legal documentation, but the due diligence - making sure that it's the right fit culturally and look for ways to integrate that position target with the company."
"Another goal is to streamline these acquisitions," he added. "When I was the outside counsel, I felt like the company wasn't as focused as it could be in the acquisition process. That's one of the ways that I saw I could add value by moving in house - by paying more attention to due diligence and by making the entire acquisition process more efficient."
Gallo is also responsible for the HIPAA compliance programs at the company, as well as negotiating contracts, employment agreements and joint venture agreements for nearly 500 of their customers. He generally answers their questions and addresses any legal matters that come up daily.
His top priorities for the company have been to ensure that the company complies with the law in all respects and protect the company from all legal liabilities. One of his major accomplishments to date has been the revamping of the HIPAA policy that they had in place when he arrived in February. "I worked with outside counsel to do that," he noted.
As he heads towards his one year anniversary with MED3000, Gallo said he's learned quite a bit - for example, not looking at issues from only one point of view.
"I used to view problems from a legal point of view first, and deferred the business aspects of a problem primarily to my clients, because that's what they wanted" he said. "I always came at it with a pure legal standpoint. I'm much better now and consider all of these different constituencies and how one decision will affect other operations of the company and how it affects our clients and suppliers. Not only am I providing legal advice, but I want to be able to offer sound business judgment."
MED3000 has an ambitious goal to grow the company and revenues by 20 percent per year. That is a daunting challenge for any company, to be sure, but Gallo is fully invested in that goal.
"Our main goal is to be the best healthcare management and technology company out there," he said. "Right now, we are one of the largest private billing companies in the country as far as revenue and employees and we are the fastest growing company in our field. I think we made great strides, but we still a lot more work to do."
