The Lion in Winter: Pat Fallon

Namesake Fights to Bebuild Agency After String of Downturns

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CHICAGO ( -- He wouldn't want your sympathy, but Pat Fallon sure knows the pain of breakups.
In the wake of a series of client losses and exectuive defections, Pat Fallon must rebuild his agency.
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Client defections
His time as one of the last name-on-the-door ad legends has been dogged by a succession of splits. They've run from the early exit of his co-founding partner Tom McElligott through several painful client defections to the 2004 departure of his creative chief and protege, Dave Lubars. His dismissal last week of Mr. Lubars' successor, Paul Silburn, was the latest.

Mr. Fallon has sometimes seemed angry about those twists and turns -- those who have worked with him say he takes business very personally --but has remained uncommonly resilient. "Anybody that thinks I've been kicked in the nuts and am taking a standing 10 count, I ain't doing it," he said last year after parting with two clients. And, regardless of the revolving door, his agency has produced famous work such as the Rolling Stone "Perception/Reality" campaign of the 1980s or BMW Films.

But, at age 60, when he might have thought he'd be enjoying more of a figurehead role-watching his chosen ones supplementing his legacy -- he instead finds himself fighting on the frontline, rebuilding again.

Internal memo
The extent of the agency's issues, and Mr. Fallon's challenge, showed last week in an internal memo sent to staffers following Mr. Silburn's dismissal: "As most of you know I have not been satisfied with our progress as a company. I'm particularly disappointed by the performance of our headquarters office in Minneapolis. We can't be the great agency I expect us to be until Minneapolis once again prospers. "

An exodus of talent has thinned the bench. Besides splitting with long-time client BMW-Mr. Fallon pulled his trademark "you won't fire me, I quit" stunt when the marketer called a review-the agency has also lost Dyson and Lee Jeans. It's struggled to reel in new business. On top of that, Mr. Lubars' exit robbed Mr. Fallon of an heir apparent, and came as the creative kudos seemed to be shifting from Fallon to Crispin Porter & Bogusky, which is run by Mr. Fallon's childhood friend, Chuck Porter.

While some of the old campaigners who made Fallon a creative force are still around-planner and Minneapolis President Rob White, creatives Bob Barrie and Dean Hanson-Mr. Fallon will have to manage this turnaround without some trusted lieutenants who've left in recent years. Former chief marketing officer Mark Goldstein. Former lead planner and New York head Anne Bologna. Design guru and Mr. Fallon's longtime friend, and one-time college roommate, Joe Duffy.

What he needs to prove
So Mr. Fallon, a wrestler in his youth, needs to prove he still has the tenacity to rescue the agency that represents his life's work. It stands to be his final act. A single father of three grade-school age children, Mr. Fallon acknowledged in a recent statement that he "would not like to be working at this pace five years from now." No public date for his retirement has been set.

If he prevails, he could position his eventual successor for a great run at a legendary agency. But if problems persist, the agency's fortunes likely would worsen after Mr. Fallon-whose personality is inextricably linked to the agency he created-eventually moves on.

People who know Mr. Fallon warn not to bet against him. Rich Stoddart, one-time Fallonite and current president of Leo Burnett USA, cautioned: "Do not count that man out or underestimate him."

Apart from a few comments made through a spokeswoman, Mr. Fallon declined to be interviewed for this story.

Mr. Fallon is as idiosyncratic as the agency he created. He's an account guy, but has a sharp eye for creative. He's famously intense, yet fond of practical jokes. He's candid if something displeases him, but he can be exceptionally warm; he surprised former Lee Jeans client Kathy Collins by attending the funeral of her niece.

Loyal to a fault
He is loyal to a fault to those who've been loyal to him, but some of those who've left have been frozen out.

Perhaps such a strong reaction can be explained by the fact that Fallon is as much an extended family as a business to its founder. He's nurtured the agency's culture over the years by demanding high standards and encouraging risk-taking. He regularly invites a cross-section of employees to dinner at his house. Burnett's Mr. Stoddart recalls seeing him organize magazines-all published by clients-in the agency lobby.

"He just cares about every single thing that agency does," said Mr. Stoddart, who joined Fallon in 1995 and headed account services by the time he left in 2001.

Terry Block, president-pet foods, North America, of Nestle Purina PetCare and a client of 15 years, said: "His name is on the product when it comes out the door and he takes that very personally."

The man behind the nameplate was born in an Army hospital in Columbus, Ohio, but he was raised in Minneapolis. And he remains-despite a penchant for searching out hip Manhattan restaurants-thoroughly Minnesotan. He hunts pheasants, he fishes, he has a cabin up north. He can be spotted jogging around the lakes near his house in the city.

Universally praised as a doting father, he goes to his kids' school events and watches his two young sons play hockey (in all the thrice-married Mr. Fallon has five children, including a daughter who plays ice hockey at Trinity College in Connecticut).

Midwestern ego
And, all the cliches about Midwesterners -- hardworking, honest, unpretentious, humble -- apply to Mr. Fallon, according to current and former colleagues and clients. "Pat's ego has remained decidedly Midwestern," said Brad Jakeman, managing global director of advertising for Citibank.

Mr. Fallon was born to Katherine and Jerome P. "Pat" Fallon. His father enlisted at the outbreak of World War II and flew 50 bombing missions in a B-17 through the flak-filled skies over Germany and France.

Mr. Fallon grew up in southwest Minneapolis, a neighborhood of leafy streets that wind around two small lakes. He met Chuck Porter at junior high school and they were "best friends" during the first two years of high school, Mr. Porter said.

Mr. Porter remembers Mr. Fallon as a mischief maker, mature beyond his years and smart. At Mr. Porter's house they'd fire .22 rifles on a makeshift range in the basement cellar. They would hang out at the Fallons' house after school.

"Once we knocked over a giant Christmas tree," Mr. Porter recalls and "didn't get it up in time before his mother got home."

Dark side
But there was a dark side. Mr. Fallon's father suffered from alcoholism and ultimately his parents' marriage broke up. According to the (Minneapolis) Star Tribune obituary, the elder Mr. Fallon "eventually lost his family, friends and material possessions to alcoholism." (He later got sober and became active in treatment programs in the Twin Cities.)

Mr. Fallon attended the University of Minnesota, where he double majored in philosophy and humanities and was a member of the Sigma Alpha Mu fraternity. He dived into advertising after college, heading to Chicago to be a management trainee at Leo Burnett. After just a year he returned to Minneapolis.

He wound up at Martin/Williams and worked his way up to VP-marketing services. Mr. Fallon impressed, even then, with his drive, his work ethic, his eye for great creative, and his knack for new business. "He wasn't the smoothest guy," said David Floren, a contemporary who later ran the agency. But clients "could see the belief in his eyes." Mr. Floren added: "He would be the first in the parking lot most of the time, it's safe to say."

Mr. Fallon could have had a safe career. But he wanted something more.

Partner Tom McElligott
Mr. Fallon had been freelancing with Tom McElligott, a highly regarded creative at Bozell & Jacobs. They liked their moonlighting gig more than their day jobs and decided in 1981 to hang up a shingle. Along with Fred Senn, who headed account services, Art Director Nancy Rice and Chief Financial Officer Irv Fish, they opened Fallon McElligott Rice. The agency opened for business above a greasy spoon in downtown Minneapolis.

Besides holding the title president, Mr. Fallon cleaned the restrooms.

The new agency sought to work closely with clients, not be bound by bureaucracy and produce uncompromising creative that would sell product by cutting through clutter. A newspaper ad for the agency that doubled as a manifesto announced Fallon as "a new advertising agency for companies that would rather outsmart the competition than outspend them."

The work backed up the bold words. Singing bankers for Minnesota Federal Savings & Loan. Parachuting chickens for Gold'n Plump.

To gain notice the agency entered, and dominated, award shows. Advertising Age named the upstart 1983 Agency of the Year.

Fallon was almost never fired. It quit first. In that 1983 award write-up Mr. Fallon-known for his great vocabulary as well as his sometimes blue language-said it resigned its first client, a local TV station, because it was "very penurious."

It went on one of the great runs in industry history, vacuuming up prestigious accounts such as The Wall Street Journal, Rolling Stone and others, and sold out to Scali McCabe Sloves in 1986.

Embarassing 'Dinka' incident
There were bumps along the way. The agency was humiliated -- and lost the U.S. West telecom business -- in the so-called Dinka incident in 1988, when Mr. Fallon and other executives sent ridiculing letters to a woman who criticized an ad as sexist. One of the letters included a picture of a boy of the African Dinka tribe kissing the backside of a cow. A letter from Mr. Fallon said the agency would pay half of her travel expenses to Africa, or "full expenses, one way."

It was an embarrassing and costly incident. Later that year Mr. McElligott left, prompting people to question whether the agency would survive without its creative leadership. Fallon persevered.

The agency finally hit a wall in the early '90s. It lost Porsche. It fell short in reviews for Compaq, MasterCard and Audi of America.

Mr. Fallon then proved he could do more than manage a rising tide. He made radical changes to get the shop back on track. He hired highly regarded planner Rob White to create a planning department, still unusual in the states. He hired noted rainmaker Bill Westbrook of the Martin Agency as his creative director, replacing longtime Fallonite Pat Burnham, who had left. And he brought in Mark Goldstein, president of Earle Palmer Brown, to oversee a marketing service offering and to be chief marketing officer. Amid this rebuilding, Fallon also bought itself back.

Fallon went on to be an unbeatable force during the mid 1990s, winning huge accounts. It victimized Leo Burnett, stealing United Airlines and Miller Lite and snagging the Arch Deluxe sandwich assignment from Burnett client McDonald's. It repeated as Ad Age's agency of the year in 1995.

McDonald's, Millers splits
The Fallon approach wasn't for everyone: It soon split with McDonald's and, after a few years, Miller. But even after Mr. Westbrook left and was replaced by David Lubars, the agency continued to win some big accounts-notably Citibank-and produced BMW Films. It was a highly desirable property when Publicis Groupe bought it in 2000.

Also, the question of who would succeed Mr. Fallon slowly resolved itself as Mr. Lubars assumed a higher profile within the agency. Mr. Fallon himself stepped back.

That seeming continuity and stability was ruptured when Mr. Lubars left, and despite Mr. Fallon once again actively inserting himself into agency affairs, Fallon had a terrible 2005. It lost clients. It did land on the Sony Electronics U.S. roster, but that relationship didn't last. Its new business results were lackluster.

On top of that, the agency closed its 10-year-old New York office. Some said it made sense strategically but it meant losing a creative hotspot.

Still Mr. Fallon is already hustling to get the shop back on track.

In the early days of January, veteran Fallon creative Mike Gibbs came close to bailing to take a top job at another Minneapolis agency. He was unhappy with the way the creative department was being run under Mr. Silburn, according to people familiar with the matter.

Mr. Gibbs, a group creative director best known for work on Lee Jeans, PBS and Holiday Inn, would have been a big loss for the roughly 50-person department. The agency has lost a string of high-ranking and talented creatives since 2004, particularly since Mr. Silburn joined in February 2005.

Mr. Fallon visited Mr. Gibbs at his home in the affluent suburb of Edina. They discussed his concerns about the creative department. Mr. Fallon promised changes were coming (it's unclear how specific he was, people familiar with the matter said).

After the conversation, Mr. Gibbs remained a Fallonite.

Mr. Gibbs declined to comment. But before Mr. Silburn's firing, Mr. Fallon said through a spokeswoman: "Mike came to [his] senses on his own."

It's one save amid a lot of bad news, but it might just be the start of another Pat Fallon comeback.

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Editor's disclosure: During the course of writing this story, James B. Arndorfer accepted a job with Miller Brewing Co., where he will be managing editor of Miller's Brew Magazine.
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