Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Some firms rarely hear the sound of crying in the night, don’t worry about teaching life lessons, and never have to baby-sit. In short, these are firms without associates � or close to it. And, as the Legal Times 150 survey documents, several smaller shops in and around D.C. actually do employ this reverse leverage model: they have far more partners than they do associates, bucking the typical law firm structure. This, of course, stands in contrast to the massive litigation and transactional powerhouses, which typically feature associates virtually spilling from every file cabinet and spend thousands of hours and millions of dollars on recruiting and training legions of them. For legal industry experts, leverage is usually a leading metric of law firm financial health. It’s the true engine that powers that high-revving Porsche 911 the partner drives to work every morning. Associates at big firms understand their role is to gather in mass and log the hours that form the foundation of firms’ revenues. A “healthy” partner-associate ratio is usually seen to be around one partner for every three to four associates. “It’s one of the principal drivers of profitability,” says Peter Zeughauser, a law firm consultant at the Zeughauser Group. Leverage “allows the partner to get more work done for the client and make more money for the firm at a lower cost.” But, Zeughauser notes, “Some work can be leveraged. Some can’t.” For the firms on the LT 150 that are, in effect, childless, the practice area makes all the difference. At Wilkinson Barker Knauer, a communications boutique, there are 26 partners and five associates, a ratio that would turn Covington & Burling’s white shoes dull brown. “The reason we have so many partners is we’re a communications specialty firm, and people accumulate valuable expertise as they stay with us over the years,” says L. Andrew Tollin, the firm’s managing partner. The firm, which regularly does work for Verizon and AT&T, handles esoteric regulatory matters for satellite companies, Internet providers, broadcasters, and telecommunications companies. Its attorneys have to navigate the Federal Communications Commission’s guidelines and stay abreast of statutes that change with the tide in Congress. “Our biggest reason for using a lot more partners is just that the partners are so much more sophisticated,” Tollin says. “We need people who are really steeped in these very specialized areas.” Some practices like intellectual property and tax don’t need platoons of associates ready at a moment’s notice to troop through millions of pages of documents. It’s expertise in a given practice area that’s vital, the kind second-year associates can’t hope to supply. They are, after all, in a professional sense, still learning how to walk. Low-leverage firms also exhibit other differences from their larger brethren. For example, associate retention (to say nothing of satisfaction) rates at most high-leverage firms are notoriously low � not that the firms are too concerned about it. “The fact that the vast majority of associates leave on their own volition itself is not a scary proposition for a lot of law firms because it helps them in the weeding out process,” says Steve Nelson, a legal recruiter with the McCormick Group. “For a boutique firm, the intention is that these people will stay and make partner.” For smaller firms with specialty practice areas, associates are much less fungible because of the investment in training that goes into them. At Banner & Witcoff, an intellectual property boutique with offices in Chicago, Boston, Portland, and Washington, the firm works hard to hold on to its associates. “When we hire people, it’s with the hope and expectation that they’ll be around for a long time,” says Pieter van Es, former president of Banner & Witcoff. “It’s with the hope that we’re going to make them partner some day.” Wilkinson Barker Knauer’s Tollin agrees. He says the firm’s attitude toward leverage “actually helps to keep associates because if an associate comes here they have a reasonable expectation of making partner.” That is, “if they can survive the grueling process of getting trained,” he adds. Banner & Witcoff’s D.C. office stands traditional notions of firm leverage on its head, with 3.4 partners for every one associate. The firm has about 90 attorneys in its four offices, and more than half of them are junior or senior partners. But, as van Es notes, the firm’s large cadre of nonattorneys, professionals who are technical specialists and patent clerks, makes the firm’s leverage ratio somewhat misleading. The firm specializes in patent litigation and prosecution, handling cases for companies like Nike, Kimberly-Clark, and Delphi Automotive Systems, and pays its first-year associates, who work 2,000-plus hours per year, above-market pay of $165,000 a year. And if the firm gets slammed with a huge case, van Es says they don’t worry about warm bodies. “We have enough horsepower that we can handle just about anything,” he says. There’s one D.C. firm, though, that’s taken the partner-centered model to an extreme. Nixon & Vanderhye, an Arlington, Va., IP firm, has almost no associates � a mere four to the 33 partners. About half the firm’s business is patent prosecution, and about half patent litigation, with a bit of trademark work thrown in for good measure. It does work for clients such as Nintendo and Toshiba. According to the firm’s president, Larry Nixon, it has been adding one to two attorneys a year since it opened its doors in 1985. But when the firm adds a new hire, the lateral almost always comes on as a partner or is on a direct track to be one. And the firm never hires associates straight from law school. Instead, it lets other firms do the training. Nixon & Vanderhye, which has scrapped the classic pyramid structure, waits until its workload gets a little heavy for the current number of attorneys, and then it goes shopping. “When we do recruiting, it’s scratching our heads saying who do we know that’s really good, and then we tap them on the shoulder,” Nixon says. “We explain the way we work and the kind of work that we have, and they almost always find it quite attractive.” The decision to forego associates, however, is not one that should be taken lightly. Gilbert Randolph, an insurance, bankruptcy and dispute resolution firm in D.C., has 12 partners and 19 associates, a more typical ratio. And for the firm, it’s a challenge to keep itself small and profitable, while also maintaining leverage. “The way we dealt with it was, we made a promise to ourselves and to our associates when we started the firm that when an associate was doing partner-level work, they would be promoted to partner, irrespective of leverage concerns,” says Scott Gilbert, the firm’s managing partner. He adds that the firm uses alternate billing methods to help ameliorate leverage issues. Using fixed fees and contingency fees negotiated with their clients, Gilbert says, reduces the emphasis on leverage, particularly on a firm its size. In the end, though, for many firms with few associates, profits per partner in the $1 million range aren’t a real possibility and a pot of gold glittering at the end of the rainbow is not the thing they most aspire to reach. “We could go for a more profitable model, which would be much more the pyramid structure,” Tollin says. “But instead, we’ve chosen to cultivate experts to serve the clients’ needs.”
Attila Berry can be contacted at [email protected].

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.