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In business for going on 200 years Focus is key to longevity, old firms say

It's no small feat for a company to survive 100 years in existence, but it's even more remarkable and unusual these days to approach 200 years.

The nation's economic woes have brought some of the country's largest banks, brokerages, retailers, automakers and other manufacturers to their knees, driving some storied names into bankruptcy and out of existence. Others are barely holding on to lifelines, hoping to make it another year, but not even comprehending the idea of surviving nearly two centuries.

Yet Buffalo has a number of companies well on their way to achieving, or even already approaching, that milestone, including one bank, two law firms -- both of whom counted former President Grover Cleveland as a partner at one time -- and several small businesses. They struggled as start-ups at one point, and endured multiple national recessions, the Great Depression, two World Wars, and in a couple of cases, even the Civil War, in addition to any internal struggles.

"Over the years, we have faced enormous challenges. We weren't always a 200-year-old firm with a solid book of well-respected, well-regarded clients with a brand name that everyone knows in the marketplace," said Gary Schober, CEO of Hodgson Russ LLP, Buffalo's largest and oldest law firm, which this year is 191 years old. "We were fledgling at one time, just like every other business."

Now, as the nation faces a severe recession and economic crisis not seen in more than 70 years, their current leaders have found that the same traits that got their companies through past trials are helping them survive the current downturn.

"We found if you narrow the things that you think are important and execute them consistently, then you can stay relevant [to your customers]," said Mark Czarnecki, president of M&T Bank Corp., which was founded in 1856 as Manufacturers & Traders Trust Co. by a handful of Buffalo business leaders. "That doesn't mean you don't change. But if you understand the things that are important to you, your customers and your employees, and you stay focused on them, you're going to be moving in the right direction."

And their lessons may prove invaluable for all others.

"I have very strong feelings that the only way to get through a difficult time, particularly when they are as difficult as the current economic crisis, is for the organization to have a clear view of what is important to it," Schober said.

"You may not all come out with the same answers to those difficult issues, but if you all agree on the broader principles, there will be more agreement than if you don't." These businesses stress the value of being conservative and cautious, not venturing too far afield from what they know best.

"Stick to your knitting and hire good people," said Michael Bonitatibus, president of Millington Lockwood Business Interiors, an office furniture and design company founded in 1884. "There's no silver bullet to this." But most of all, they stress the value of their customers.

"A lot of it has to go back to good values, a value system that concentrates on your customers," said Jim Eaton, chief financial officer of Prentice Office Environment, another commercial office and design firm, whose roots trace back to the founding of the Birge Wallpaper Co. in Buffalo in 1834. "Obviously, to be in the distribution and sales business, you rely on you customer base, and if you don't take care of your customer base, they will vote with their feet."

That's particularly important because one of those customers could be a future giant or success story on its own. By latching on to them early and demonstrating quality service and loyalty, a business could be pulled along on the coattails, leading to referrals and additional relationships with others down the road. "It was the strength of our clients and the diversity of our practice that helped us endure through challenging economic times and periods of war and turmoil in the history of the country," said David J. McNamara, managing partner of Philips Lytle LP, Buffalo's No. 2 law firm, which this year marks its 175th anniversary. The firm helped start Marine Bank, predecessor to HSBC Bank USA, and has counted DuPont Co., National Fuel, Dunlop, Rich Products and major drug makers among its clients for decades. "We've had these incredible relationships with blue-chip companies that themselves were so strong they were able to weather the changing economic circumstances over time."

>Keying on customers' needs

While all these companies cite internal culture, conservative values and steady focus, what's most critical is they've kept their customers through good times and bad, said Harold Star, a professor in the Department of Operations Management and Strategy at University at Buffalo's School of Management.

"The secret to all of this is a customer focus, the idea of making the customer a strategic asset," he said. "It's easy to do cost-cutting, but it's more important to do everything in your power to hold onto your customer." The trick is not to get sidetracked from preserving those customer relationships. That's what happened recently to most banks, as they ventured into riskier lending and other non-traditional areas instead of being satisfied with what they had always done well. M&T made some mistakes, too, Czarnecki admitted, but it didn't go far astray and pulled itself back on track quickly.

"It's that discipline that's so important. It's an easy thing to talk about. It's another to do," he said. "You have to stay focused on it when it's trendy not to, which is very hard."

M&T stuck to its traditional business of taking deposits and making loans, and remained a small, locally focused bank for much of its history. It survived the Civil War and a pair of small depressions, but also financed railroad consolidation and even supported the war effort in World War I.

It stumbled in the 1970s when it expanded outside its familiar territory, even making loans to Latin American governments. Current Chairman and CEO Robert G. Wilmers took control in 1983 and brought the bank back to its roots. Today, it's one of the nation's 20 largest commercial banks.

A long-term philosophy is also central to Hodgson Russ, established in 1817. Schober attributes the firm's longevity to its quality of service, its culture of inclusiveness internally, its respect for its attorneys and for other lawyers outside the firm, and a commitment to the community.

But perhaps most of all, Schober said, is the guiding principle that "we have a law firm that is developed for the generations." That makes the current partners stewards or caretakers, who have a responsibility to pass on a firm that is in as good a shape if not better than what was handed to them.

"It is not just for us today. It is not for the next generation tomorrow. And it certainly wasn't for the people who came before us," he said. "We want this law firm to last well beyond the lives of the current partnership."

For Millington Lockwood, staying focused and not going astray has also been a key factor. Named for the second-generation English immigrant who founded the company and ran it for 60 years, Millington Lockwood has sold office furniture and related items since it opened.

>Adaptability is important

But it has kept an eye on its customers, and changed with their needs and demands. Today, it serves not only the commercial office market, but also colleges, hospitals and medical offices. Besides selling furniture, the company now offers design services, and bought a company several years ago that handles used and refurbished furniture. It's also now a distributor for floor-to-ceiling modular walls.

Similarly, Prentice Office Environment's predecessor was established nine years after the completion of the Erie Canal and just two years after the City of Buffalo was incorporated. Fifty years later, William Prentice became a partner, and split off to start his own firm when the business was acquired in 1890.

The company remained focused on the residential market until the 1960s before shifting to commercial as the sole distributor locally of Steelcase office furniture. It was bought by Eaton Office Supply Co. in 1972, but operates separately. It also bought a custom millworks company and diversified.

Loyal customers and suppliers can also drive success if they themselves are highly regarded and well-established in their own right.

Philips Lytle credits its success to its 142-year-old relationship with Marine Midland, established in 1850. McNamara called that "a very significant development" in the firm's history that "laid the foundation for the commercial law firm that we've become."

As Marine grew up, so did the law firm, and its reputation for sophisticated work drew other blue-chip clients. At the same time, it's diverse enough to withstand the loss of some major clients who were acquired, went bankrupt, or moved out of town.

e-mail: jepstein@buffnews.com

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