Lab Support Offers White Coats to Go : Temporary Worker Firm Specializes in Science

Debbie Brown, having just received a degree in marine biology from California State University, Long Beach, was looking for a job when a friend told her about Lab Support Inc., a Woodland Hills firm that finds temporary work for scientists.

She sent her resume to Lab Support and landed a four-month job at James M. Montgomery Consulting Engineers Inc., an environmental research firm in Pasadena, where she prepares water samples for analysis.

Brown, 24, figures that she would have found work in any case. But she said Lab Support made it easier to find the job she wanted. “I sent my resume one place and they sent it everywhere else,” she said. “They basically promote you.”

Last year, some 700 chemists, biologists, lab technicians and other scientists found short-term work through Lab Support, a 3-year-old private firm that rang up $3 million in revenue. Lab Support aims to be the Kelly Girl of science, providing laboratories with temporary scientists, just as Kelly Services and Manpower provide offices with secretaries and other clerical workers.

Lab Support is the brainstorm of Bruce Culver, a chemist himself, who is the company’s president and co-founder. Lab Support, which has 30 employees, tries to locate its offices near heavy research centers. At the moment, the company has five field offices: Costa Mesa and Burlingame in California; Englewood, Colo.; Morristown, N.J., and Chicago. Culver also plans to expand in the next few months with offices in Philadelphia, Boston and Houston.

No Profit Yet

For all of its innovativeness, however, Lab Support has yet to turn a profit--a common trait of fledgling companies.

Nevertheless, Culver is encouraged that Lab Support’s 1987 revenue more than quadrupled to $3 million from $650,000 in 1986, and he is tentatively estimating 1989 revenue at $8 million to $10 million. Culver won’t detail Lab Support’s losses to date, but said the firm should break even this year and post its first full-year profit in 1989.

At the moment, Lab Support is finding jobs for about 50 to 60 scientists a month, but receives 400 to 600 new applications monthly. Those who are hired typically work three to six months at one company. Overall, Lab Support’s IBM computers store more than 6,000 resumes, which are cross-referenced several ways so that Lab Support can quickly match a client’s needs with suitable candidates. Besides Montgomery Engineering, recent clients include Chevron, Shell, Westinghouse, Monsanto and Johnson & Johnson.

Culver said he gets resumes from new graduates like Debbie Brown who need work experience, and from scientists who quit their jobs or were laid off. Veteran scientists looking for short-term consulting posts also apply.

The firm’s executives, financial backers and some of its customers said the service fills a strong need among laboratories for specialized workers, as shown by the fact that 75% of Lab Support’s revenue comes from repeat business.

‘Unique Experience’

“It was a new and unique experience working with a supplier of temporary employees that was very cognizant of our business,” said Margil Wadley, lab director at the South Coast Air Quality Management District. The pollution-control agency is using nine Lab Support workers.

Lab Support appears to have this market to itself. “Offhand, I can’t think of any other company” that specializes only in scientific help, said Louise Gates Seghers, spokeswoman for the National Assn. of Temporary Services, an Alexandria, Va.-based trade group for 600 temporary help firms.

Lab Support works this way:

People looking for scientific jobs send Lab Support their resumes. The applicants pay nothing, but also are guaranteed nothing, except that their resumes will be entered in Lab Support’s computers and made available to companies looking for help.

Once hired, the scientist is not an employee of the company where he or she works, but rather of Lab Support, which provides the employee with a salary, insurance, a medical plan and other benefits. Lab Support bills the company using the employee’s services, pays the worker’s expenses and hopes to keep what’s left as profit.

Don’t Hire Unproven Help

Companies like this arrangement because they don’t have to hire unproven help. “We get that opportunity to investigate and find out before we make a commitment,” said Andrew Eaton, head of Montgomery’s laboratory.

If a company hires a Lab Support worker permanently and that worker had been with Lab Support for less than six months, the company must pay Lab Support what is essentially a recruiting fee of up to 25% of the worker’s first-year salary. If the worker had been with Lab Support for six months or more, no fee is involved.

Although Lab Support is still looking to make its first profit, it is competing in an industry where profit margins are slim. At such rival firms as Kelly Services, Olsten, Manpower and Volt Information Sciences, profit margins are two to four cents per dollar of revenue.

Still, Lab Support’s managers said the firm’s growth gives them hope that their long-term goals for the company--and for their own financial reward--will be met.

Culver, a native of Emmetsburg, Iowa, started Lab Support in January, 1985, with another chemist, Raf Dahlquist, now vice president of Lab Support. The two had worked together in the early 1980s at Applied Research Labs, a Valencia-based producer of scientific instruments. With the help of their wives--both hairdressers--each couple invested between $20,000 and $30,000 to launch the business.

After six months in business, however, they were running short of cash and needed more money to keep going. So Culver and Dahlquist began asking venture capital firms for financing. They were turned down by 20 different firms, Culver said. “Before the venture capital people came in, we were just at the point of having to call it quits,” he recalled.

Finally, after six months of hunting, the 21st venture capital firm Culver approached, Sierra Ventures, agreed to help. The Palo Alto company, which specializes in helping service companies get started, has invested $1.1 million to date and is now Lab Support’s biggest stockholder with a 40% stake. Culver and his wife still own about 10% of Lab Support, and the Dahlquists own about 7%, Culver said.

“They’re a service business and we back service businesses,” Peter C. Wendell, a Sierra general partner, said in reference to his firm’s investments.

The quadrupling of Lab Support’s revenues last year convinces him that the investment will pay off. “We wish they all went like this,” said Wendell, who has joined Lab Support’s board of directors. Lab Support “is even more attractive than we first perceived, in that the growth of temporary help is greater and the repeat usage has been higher,” he said.

Even though Lab Support has yet to make money, Culver is talking expansion. By 1990, he wants to have 25 offices nationwide.

To help finance that growth, Lab Support is interested in going public or in being acquired. Both strategies would also enable Culver, 42, and Sierra Ventures to cash in their holdings for big profits.

Culver said that as an alternative to going public or being acquired, Lab Support “may be in a position to acquire some businesses that we view as synergistic,” such as finding jobs for engineers with the same companies that now use its scientists.

But he also has set limits on Lab Support’s growth, saying, “We’re not looking to temp lawyers or doctors.”