Big, small and midsize law firms hold equally important roles within the complex legal ecosystem. By occupying defined and differentiated places in the legal industry, each brings tremendous value to clients and each other.
With the demand for change in the legal industry pushing firms to innovate on behalf of their clients and employees, midsize law firms are ideally positioned to succeed with their nimble infrastructures and ability to quickly adapt to market trends. This trend benefits midsize firms in recruiting, as well as client service and retention, placing them in a distinct and attractive market position.
Midsize law firms have many opportunities today, fueled by their attractive rate structures and full-service value proposition. They tend to represent midsize businesses, but they’re also well positioned to serve as outsourced general counsel to closely held companies and high-net-worth individuals while also supplementing in-house counsel at Fortune 100 companies.
Leveraging Agility and Embracing Change
Midsize law by its nature is agile, able to pivot quickly in response to market trends and embrace change. This high level of adaptability allows them to offer a broad base of services to support client needs while being able to quickly develop new practice offerings or agree to modified billing models.
As clients face increased pressure to stay within budget, keep costs down and improve expense predictability, their outside law firms are also asked to be more flexible with their rates. Midsize law firms have a great opportunity to explore alternative fee arrangements that can provide clients greater flexibility and in-demand alternatives to hourly billing. For example, in the commercial leasing area, we developed an innovative, client-centric billing model where we budget and base fees for office space leasing work on a per-square-foot basis. Here we are speaking the real estate industry’s language by adopting a billing approach that landlords are accustomed to using with their business partners and vendors. Our ability to swiftly implement innovative growth strategies in our technology, workforce and billing practices allows us to anticipate and rapidly respond to market changes that will affect our clients in this often-unpredictable business climate.
By embracing creative alternative fee arrangements, we have the opportunity to truly partner with our clients to ensure these arrangements are efficient, practical and make the most business sense for their bottom line and ours. These types of pricing arrangements are helping us better prepare for the future of our industry and become more transparent, incentive-based and client-focused.
The agility of midsize law firms allows them to be in tune with the industry and implement change faster than Big Law because there are fewer people and fewer layers of management. For instance, if the need arises to create a new industry or practice group based on market conditions or client needs, a midsize law firm will, generally speaking, have an easier time going through the steps from inception to launch.
The Power of Referrals by Cultivating Relationships
Midsize, small and big law firms are closely intertwined. They often refer business to each other, collaborate on matters and share some of the same clients. These relationships are the bedrock of any law firm.
While the clients of small law firms may be best served by one or two dedicated principals often in specialty areas, there are times when that client may need additional services that a midsize law firm can provide. For example, we regularly supplement one particular boutique firm with labor and employment and intellectual property services with rates that are agreeable to their client base. Likewise, there will always be certain big-ticket, bet-the-company matters for which Big Law is better poised to handle. Similarly, Big Law will work to balance the needs of the client with economic practicality by calling in midsize law to offer expertise in areas that do not traditionally lend themselves to big law firms.
For example, we are often asked to advise clients in areas such as construction, outdoor advertising, immigration, trusts and estates, and reputation management, among others. While these may be core areas for midsize law, they can also be specialized components of larger matters at Big Law or “one-offs” at small law firms.
Conversely, there are times where midsize law can better serve clients by referring a matter to a big law firm, perhaps for a global financial transaction—or to small law firms in specialty areas such as smaller disputes and family law. The wide-ranging needs in the legal market make these strategic alliances critical for an industry tasked with providing comprehensive legal counsel to informed clients who are also focused on their bottom lines.
An added value proposition of full-service, midsize firms is that they are able to fill in the gaps in the specialized legal needs of both larger firms and smaller firms.
Investing in Your Firm by Investing in Your People
Now more than ever, law firms must create an engaging environment that promotes learning and creates growth opportunities at every level. Employee development and satisfaction are an integral part of maintaining a strong firm culture. Professional development is an increasingly important aspect of succession planning, particularly for midsize firms.
Midsize firms have an opportunity to set the bar high in professional development because we have a greater ability to invest in our staff members in a more individualized way. For example, through our GOAL Program (which stands for Go Out and Learn/Lead), every lawyer and staff member at Tarter Krinsky & Drogin is given the opportunity—and the financial backing—to accomplish a professional goal or learning objective each year that is tied to their professional role. Taking it a step further, we provide in-depth guidance in developing the vision behind their GOAL to ensure it is attainable and rewarding.
Midsize firms also provide associates, paralegals and staff with ample opportunities to have direct client contact through client teams where every member is an integral player. This allows our professionals to build meaningful experience early on in their careers, which is particularly attractive to millennials.
In addition, midsize firms are well positioned to put business development front and center. We underscore that everyone at our firm is in a business development role because we are a client-service business. We empower each of our lawyers to develop business by fostering a unique entrepreneurial culture that is attractive to the newer generation of lawyers. We also stress that to be successful at business development, you must make time for it. To support that, we implemented a number of initiatives to promote cross-selling and give our lawyers the tools they need to succeed in lead generation and client retention.
The cornerstone of our business development training for lawyers is our Pipeline lead generation program. Participants, who range from first-year associates to senior partners, meet together monthly to brainstorm leads, and discuss tactics and outreach. The program provides our lawyers with the critical skills they will need today and tomorrow to generate new business and develop stronger professional relationships. This is complemented by training programs covering social media, networking, client service and working across generations, among others.
The Way Forward
Midsize firms need to embrace their size and make the best use of their competitive advantages, focusing on how to maximize their ability to leverage referral relationships with big and small law firms, offer flexible client-centric pricing models and sponsor tailored training programs. Implementing these types of programs will put your firm in a strong forward-thinking position to navigate the needs of clients and employees in this ever-changing industry.
Alan Tarter is the managing partner of Tarter Krinsky & Drogin.