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Full-Service Practices Aren't Just for Megafirms
Zack Needles
The Legal Intelligencer
October 30, 2009
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As smaller firms have become increasingly specialized, is there still something to be said for housing a diverse array of practice areas under one small-to-midsize roof, especially following a year of economic turmoil?

The heads of many of Pennsylvania's small and midsize general practice firms certainly think so.

"Having [a number of services] under one roof and being full service has been very useful, especially in this economy when clients are looking for both pricing and service," said Kerry S. Schuman, managing shareholder of Friedman Schuman Applebaum Nemeroff & McCaffery in Jenkintown, Pa., adding that his firm has started to see "a migration of medium-sized business."

Schuman said being a general practice firm "levels out peaks and valleys in various practice areas."

"We've always felt there was a place for midsized firms and it's more important now in this economy," said Mitchell S. Kaplan, managing shareholder of Zarwin Baum DeVito Kaplan Schaer Toddy in Philadelphia. "I think midsized firms with much less overhead are much more attractive for most companies."

EVERYTHING TO EVERYONE?

The phrase, "You can't be all things to all people," is a popular one among legal industry watchers, especially in reference to small and midsize firms.

But while some critics may view smaller general practice firms as being, by definition, guilty of not heeding this advice, the heads of those firms see it differently: It's true smaller general practice firms can't satisfy every need of every type of business, they say, but they can offer businesses of all sizes an array of affordable services.

"I think you have to be as deep as your clients; I think that's the answer," said Kevin F. McKeegan, managing partner of Meyer Unkovic & Scott in Pittsburgh, which maintains a roster of about 50 attorneys. "If someone comes to us and says, 'Can you represent Microsoft?' No, we clearly don't have the depth to do that, but if you ask if we have the depth to handle a $50 million acquisition -- yeah."

The crucial ingredient to being a diverse but strong midsize general practice firm, those interviewed said, is quality lawyers.

But the ratio of attorneys to practice areas at any firm will dictate the way it views depth.

For example, Kaplan, whose firm has 48 attorneys, said he strives to staff his firm with specialists, each focused on a specific area of law.

"It's not like the old solo practitioners or small firm groups where attorneys would handle more than one practice area; we try to limit attorneys in our office to handling one practice area," he said. "What we've tried to do is create departments with highly skilled practitioners that are as skilled as attorneys in bigger firms."

Similarly, Joseph H. Jacovini, chairman of Philadelphia-based Dilworth Paxson, which has around 100 lawyers, said his firm favors skill over size.

If you focus on hiring a few quality lawyers in each practice area, "your top five attorneys are going to be as good as the five at any given firm," he said. "You may not be able to field the third and fourth teams, but you have the first and second teams and it's very rare that you need a standing army in reserve."

Schuman said his firm also prides itself on being "nimble enough" to transition between practice areas— a trait that comes in handy when navigating market shifts.

But unlike Zarwin Baum and Dilworth Paxson, Friedman Schuman only has 23 attorneys, so it's an asset to the firm to have lawyers who can wear more than one hat.

"We have people who can also do multiple types of law," Schuman said.

But Schuman warned that firms need to know how many different practice areas they can handle or they risk becoming overwhelmed.

"It's very difficult to be a solo practitioner or a very small firm [doing general practice work]," he said. "It's more a function of the rate of change of knowledge required in various practice areas. The rate of change of what one needs to know in order to be able to practice ethically for clients has increased. It's harder for a smaller firm not to be specialized."

But Schuman said that once a firm's staff reaches double digits, it shouldn't shy away from expanding its range.

"There are lot of really great places with 10, 15, 20 lawyers in Philadelphia," he said.

FITTING IN

Lance J. Nelson, managing partner of 30-lawyer MacElree Harvey in West Chester, Pa., said there is unquestionably a market for smaller general practice firms.

It's knowing what that market is that's essential, he said.

"I think that the key to our success is that the practices that we offer sort of mirror the needs and demands of our clients and our clients are small to medium-sized businesses, and individuals," he said. "They need a variety of legal services -- everything from general corporate work to employment-related counseling. Individuals need services like estate planning, administration work and general litigation work."

Joel A. Rose of Joel A. Rose & Associates said the existence of midsize and smaller general practice firms is essential to smaller privately held companies and wealthy individuals who can't afford megafirm rates.

"Many of these privately held corporations are very successful and they have a very strong need for quality legal services in a variety of the legal disciplines," he said, adding that in many situations smaller general practice firms will assume a role akin to general counsel to their midsize and smaller clients.

But Rose and the firm leaders interviewed for this story were quick to point out that even though smaller businesses and individuals are often their bread-and-butter clients, that's not to say smaller general practice firms are precluded from working with huge, publicly-traded companies.

McKeegan said his firm has recently begun doing leasing work and litigation for a few publicly held Pittsburgh corporations.

"Our rates and talent level are exactly what they need," he said.

According to McKeegan, a firm of Meyer Unkovic's size would never have been offered that type of work by that type of client five years ago, but things have changed dramatically, particularly within the last year.

"It's not bet-the-company litigation, but it's work we can handle efficiently and economically for them, and achieve good results," he said.

Jacovini said his firm is "involved in most of the big deals that go on in this particular market region."

"I was talking to a GC of a very, very large bank and he said that what he's seeing is that 75- to 150-person firms are sort of the sweet spot where a lot of their work is going; where they can get work done at equal if not better quality and at 35, 40 percent less than they're paying at firms 10 and 20 times that size," Jacovini said.

Kaplan said he still feels most large companies tend to gravitate to megafirms but is certain his firm has the capacity to do much of what is still considered by many to be strictly large firm work.

"There are certainly matters that require the manpower that only a big firm can offer and then sometimes even a certain skill level or experience that only a big firm attorney can handle, but we feel that the lion's share of matters that are brought to a much bigger firm can certainly be handled by a firm of our size and the skill level of our attorneys," he said.

Nelson said he was confident in his own firm's ability to do much of the same work larger firms do but with all the perks that come with being a smaller suburban firm.

"The difference is that our clients are dealing directly with partners, the people primarily responsible for their matters," he said. "We don't overstaff the issue with multiple layers of either partners or associates and we're able to offer high quality services at a pretty reasonable price."

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