Editor’s note: This is the first in a two-part series.
In a post-recession legal landscape, the era of clients with seemingly unlimited legal budgets is becoming an increasingly distant memory along with the concept of limitless hourly rates.
In their place is a new business climate in which more and more corporate counsel, hamstrung by tight budgets, are demanding flexibility and predictability in their legal bills.
That shift has brought with it a wave of attorneys who set out to respond to these demands by starting small or solo practices predicated on delivering legal services in the most efficient way possible, without the bulky overhead and sometimes antiquated business models of larger firms.
Will Sylianteng left Philadelphia-based insurance firm Bennett, Bricklin & Saltzburg in December when it became clear that his plaintiffs-side property subrogation practice no longer meshed with the firm’s growing defense practice.
Sylianteng and law school friend Mike Tzorfas decided to strike out on their own and start WES Litigation Group, recognizing that the legal industry had undergone some profound changes in recent years.
“There’s been a shift really in how the legal profession is perceived,” Sylianteng told The Legal on Monday. “For the longest time, it was always ‘the art of law’—we sit here and bill big rates and sit in big offices and think about these things and it’s very professorial.”
Today, however, clients are increasingly holding firms accountable for the work they do and how much they charge to do it, which in turn requires firms to work more efficiently and eliminate redundancies—in other words, to run a business, Sylianteng said.
While this is a foreign concept to many law firms, Sylianteng said, it’s how their clients have always operated.
“The legal profession is the only profession where [the business model] was, ‘Bill it and the client will pay it.’ Now, it’s ‘bill it’ and the client says, ‘Well, why did you charge this?’” Sylianteng said.
According to Sylianteng, his firm aims to be as flexible as possible with regard to alternative fee arrangements and works with its clients to ensure that its billing is as predictable as possible.
Similarly, Michael Adler, a business and real estate litigation attorney who recently started his own practice after leaving Philadelphia-based Weber Gallagher Simpson Stapleton Fires & Newby, said he encourages his clients to move away from the billable-hour model.
Doing so, Adler said, often improves the attorney-client relationship.
“They can trust that our relationship is aligned because we’re in this together,” he said. “They don’t feel like they’re calling me and getting charged for a two-minute call.”
Frank Taney, who started a solo litigation and intellectual property practice in Philadelphia in December after leaving Reading, Pa.-based Stevens & Lee, said being on his own will allow him to take advantage of whatever billing method works best for a particular client.
“I think I’m going to be able to practice law more the way I want to practice it,” Taney said. “It relates to being able to have lower billing rates and having more flexibility with fee arrangements—I’ll be able to go to monthly retainers or do things on a success fee or contingent fee basis. I’ll be able to worry more about revenue than billable hours.”
Many of the lawyers The Legal spoke to said they’re able to be flexible with fees because they have the ability to be much more efficient than a typical midsized or large firm and are not constrained by firm policy.
Taney said, depending on the practice, there are some positives to the structure and overhead at larger firms, but that for his practice, the leaner approach is beneficial to both his clients and him.
“I looked at how much money I would take away from the same book of business on my own, rather than at a firm,” Taney said. “And it’s not even apples to apples because of the work and [fee] arrangements I would have to turn down because they don’t fit into [a large firm's] business plan. I don’t have to try to cram my practice into someone else’s business plan now. There’s no such thing as a ‘non-strategic client’ at Taney Legal.”
As managing partner of WES, Sylianteng said he places a huge emphasis on project management in order to find the most efficient ways to get a client from point A to point B.
Part of that, Sylianteng said, involves finding skilled lawyers who may have been uninterested in pursuing the traditional partnership track at large firms.
WES hires these lawyers, whether they be contract attorneys or part-timers at other firms, to handle specialized pieces of matters, according to Sylianteng.
The idea, Sylianteng said, is to employ the talents and expertise of legal minds that are either unutilized or underutilized by larger firms where lawyers are often expected to devote themselves to the pursuit of their billable hour goals.
“There’s so much legal talent out there that’s not tapped into simply because the traditional model doesn’t necessarily value it,” Sylianteng said, adding, “If you don’t fit within that mold you’re a throwaway. But we have companies that utilize those individuals.”
Sylianteng said WES’s model allows clients to receive quality legal service at a low cost, while also combatting the problem some lawyers encounter when they strike out on their own: lack of support.
While it can be difficult to service clients as a solo attorney who’s used to working in a firm setting, where backup is typically within arm’s reach, several of the lawyers The Legal spoke to said they have relationships with larger firms that allow them to handle larger matters when necessary.
Taney said he works with other solo lawyers and contract attorneys when necessary and refers work he doesn’t do, such as patent licensing, to other attorneys.
Sylianteng said his firm has approached larger firms about entering into agreements in which WES handles one portion of a matter while the firm handles the rest.
But so far, according to Sylianteng, law firms have been more reluctant than clients to agree to such an arrangement.
Sylianteng, borrowing a phrase from basketball terminology, said many firms try to “box out” other firms, afraid to share work with competitors for fear that they’ll lose those clients permanently.
Their philosophy is “don’t let any other firms touch the ball because if they touch the ball they’re not going to give it back,” Sylianteng said, but added that it would behoove more firms to recognize the value their clients receive when some of that work is allowed to be done by a smaller firm at a lower cost.
It’s not only defense lawyers who are attempting to mine relationships with larger shops.
Claudine Homolash, a mass torts attorney who left Philadelphia-based personal injury firm Sheller P.C. in December, said she’s looking to partner with some local firms in order to handle large matters.
And like the defense attorneys The Legal spoke to, Homolash said she wants to take a more modern approach to her solo practice, including by utilizing social media and her website to keep clients informed.
“The old, stuffy type of firm is outdated,” Homolash said.