Editor’s Note: This story is adapted from ALM’s Mid-Market Report. For more business of law coverage exclusively geared toward midsize firms, sign up for a free trial subscription to ALM’s new weekly newsletter, The Mid-Market Report.
At a time when law firms are increasingly looking for new revenue streams in a low-demand market, doing work on behalf and in front of government entities can prove both a lucrative and steady source of income. The trick, however, is getting that work in the first place—and understanding what it takes to hold on to it.
Whether it’s municipal law, government affairs or a combination of both, lawyers and law firms that have excelled in those areas all seem to share similar characteristics: a strong presence in their communities and a track record of experience and success that has made them a go-to firm in their region for that type of work.
Midsize firms are particularly well-positioned for those roles because their presence tends to be regional but they’re large enough to handle the increasingly complex and sophisticated work, all while keeping rates relatively low.
Eric Garner, managing partner of Los Angeles-based Best Best & Krieger, said the firm, which was founded in the 1920s, always had a mix of public and private clients but today the majority of its work is in the public sector.
Garner said establishing and growing that type of practice requires building strong ties to the communities you serve.
“That’s part of the reason we have as many offices in California as we do,” he said.
The firm has nine locations throughout Northern and Southern California, as well as a Washington, D.C. office.
Garner said BB&K began a concerted effort about 15 years ago to expand its geographic presence, recognizing opportunities for a firm of its size and with its wealth of experience representing government clients.
“Most Am Law 200 firms don’t do much government agency work because of the rates,” he said. “You’re not going to get $1,000, $1,500, $2,000 an hour.”
“We kind of looked at it and thought, ‘We’ve got this great expertise and not many other firms do that type of work,’” he said, adding, “Our goal was to differentiate ourselves to be a one-stop shop for public agency work.”
The firm opened its D.C. office in 2011 with the acquisition of Miller & Van Eaton, a boutique telecommunications law firm. Garner said the move, which also helped give rise to the firm’s government relations practice, was a response to the increasingly complex telecommunications regulatory issues its public clients began dealing with in recent years.
In fact, he said, municipal law as a whole has become much more complicated over the past few decades as populations have ballooned, litigation has increased and technology has advanced, and firms have had to grow and diversify to keep pace with that evolution.
Garner cited his own practice, focusing on representing public entities in groundwater matters, as an example.
“When I started practicing [30 years ago], you could arguably say that you did just water law and that kind of covered the gamut,” he said, but now issues such as water quality and water pricing have become so complex for public clients that they require their own fully dedicated practices.
Florida’s Weiss Serota Helfman Cole & Bierman, which has about 70 attorneys and serves as city attorney to about 20 communities, placed a priority on public representation when it was founded in 1991. A majority of its work is municipal-related, including serving as outside counsel to local governments on labor, construction litigation, land use and eminent domain issues. The firm also represents companies doing business with public agencies, but not in the municipalities where it serves as city attorney.
Prior to starting the firm, founding member Richard Weiss cut his teeth as assistant county attorney for Miami-Dade County for seven years.
Weiss said that, from its inception, Weiss Serota aimed to provide top-quality work at heavily discounted rates. It grew its practice by remaining on the cutting edge of issues affecting local government.
“When we started our firm, we felt that there was a place in the market for a private firm to do work for cities at the same level that private clients were getting, and we felt that while there are many many excellent municipal government attorneys, that some of the governments were underrepresented whether in litigation or negotiations with private parties,” Weiss said. “When for instance cable regulation came in, we started doing some of that. When the ADA came in, we started doing that. When the Fair Labor Standards Act became applicable to local governments, we started doing that.”
But while demonstrating expertise in government work will help propel a firm’s growth in that area, that growth is not necessarily easy to sustain.
For one thing, state and local governments rarely remain static for long, which can mean, as Garner noted, “your client changes every two years to a certain extent.”
And that turnover can sometimes put even a longstanding relationship between a firm and a public entity in jeopardy.
In that regard, midsize firms with municipal law practices have a distinct advantage over small firms and solo attorneys, who often depend primarily on one or a handful of government clients for the majority of their business, noted Sun Choy, who heads the government practice at Freeman Mathis & Gary, a 130-lawyer firm based in Atlanta.
“It’d be a bigger hit for them. … They’ve gotten fed pretty well–and then boom,” Choy said.
Occasionally, Garner said, a new city manager or city attorney will come in and have a relationship with a different firm, leading to a change in outside counsel.
More often, however, it’s politics that cost a law firm government work, he said.
“No one ever got elected to a public office by saying, ‘We’re going to pay the lawyers more,’” Garner said. “They always say, ‘We’re going to cut legal fees.’”
And because the vast majority of municipal law work is done in the public eye, issues can become highly politically charged, occasionally leading to backlash not just against the government, but against the government’s outside counsel.
It’s for this reason Garner said he’s proud of the longevity of BB&K’s client relationships—it speaks to the quality of the firm’s work, as well as its ability to remain above the political fray.
Lobbying practices, whether they involve representing public or private entities, come with their own challenges.
David Pascrell, co-chair of the government and regulatory affairs practice at Gibbons in Newark, New Jersey, said building a lobbying practice within a law firm is more difficult than at a firm of nonlawyers.
“All the rules of professional conduct apply to you as a lawyer-lobbyist,” Pascrell said—meaning that, while other lobbying firms might have clients with conflicting interests, lawyer-lobbyists, bound by rules prohibiting conflicts, cannot.
“In the context of a law firm, it’s much more demanding. … We’ll likely never have 100 clients. We have to be more selective,” Pascrell said.
Still, a broad cross-section of clients is key to building such a practice, even as the ethics rules effectively limit representations, said Pascrell, who represents a mix of clients, including bond-issuing utilities authorities.
Gibbons, with more than 200 lawyers firmwide, has a robust lobbying practice that in 2017 had the most annual revenue of all lawyer-lobbyist practices in the state, at $2.11 million, according to the New Jersey Law Journal, which examines disclosures to the state government each year.
And while ethics strictures on lawyer-lobbyists can sometimes present business development challenges, they can also help law firms win clients.
“All of these things serve as a kind of way to professionalize” a lobbying practice, Pascrell said, noting that some clients will only hire lobbyists who are also lawyers.
David Gialanella, Catherine Wilson and Jonathan Ringel contributed to this report.