The Suburban Law Firm: A New Species?

Over the last 10 years, I have attended a number of leadership, management and other seminars pertaining to the direction that law firms must take in order to be successful in the 21st century. What ensued was years of frustration. I never felt like our firm fit into any of the categories of law firms that would prosper in the ever-changing legal environment. We weren't a national, regional or international law firm. We weren't a boutique. Yet each year our firm grew both in size and financially. In 2003, our profits-per-equity-member reached $425,000. We are competitive economically with the large law firms, yet we are having more fun.

The 'Suburban' Firm

I decided that there had to be something that all the fabled consultants were missing. That's when I began to build the model for a new species of law firm that I call the “suburban law firm.” This type of firm differs from the traditional regional, national and international firms that I call the “urban law firm.”

Today there are certain inefficiencies in the legal market that allow a talented, well-designed suburban firm to prosper.

The suburban firm has the advantage of being convenient for their client base. Our firm has five offices that are easy to access and parking is a breeze. At the same time, the suburban location comes chock full of economic goodies. The rent that we pay for office space is 20%-40% less than the rents charged in Baltimore City and Washington, DC. We offer employees free parking and an easy commute. It's convenient for our attorneys to go to their child's afternoon lacrosse game and return to the office and work for a few hours. If you juxtapose the commute of an attorney to an office in the city versus the time spent traveling to a suburban office, we find that each of the lawyers and paralegals gain 4-8 hours per week – hours that they can spend in the office billing clients, marketing and maintaining client relationships. On weekends, it is easy to stop by the office and spend a few hours cleaning up one's desk. Since parking is free, there is an additional economic incentive derived by the firm. Whereas the cost of parking in the urban location can range from $150 to $300 per person per month. The overhead for the suburban law firm's business operations is substantially lower than the urban firm.

Our firm has also avoided getting caught up in the spiraling associate wage inflation. We can attract young talented associates from local law schools who are ranked in the top 15% of their law school class. We sell them on quality of life issues such as lower minimum hour requirements (1800 hours) and more emphasis on spending time with their family. They are also given more client contact and responsibility at an earlier stage of their career. We also inculcate our young attorneys with an entrepreneurial and marketing spirit. We have found that lifestyle issues and client interaction are attractive to this new generation of attorney. Their compensation at the suburban law firm is 25%-40% less than the larger urban law firm.

At the same time, our firm has been able to attract talented, well-trained attorneys with practices at the $150,000-$400,000 level. We look for highly trained attorneys with 8-15 years of experience who are not as attractive to the larger regional and national law firms. Their practices are generally too small for the larger law firm and their clients don't mesh well with the urban law firm as the larger firms move up the food chain. As an example, we recruited two attorneys from a large regional firm of 400-plus attorneys. One was a corporate attorney with a cadre of health industry clients, and the other was a top-flight healthcare attorney. When they joined our firm, they were able to tell their clients that their billable rates had dropped from the $375-$400 an hour level to a $290-$310. At the same time, they were located in a firm that was a 5-minute car ride from the client's health care facility. In a little over 1 year, both attorneys substantially increased their practices. Marketing became easier in the suburban setting, and clients who couldn't afford their fees at the larger urban firm returned in droves.

Finding a Niche

A suburban law firm seeks certain types of clients ' wealthy individuals, small businesses, local work for public sector representation and publicly traded companies. Practice areas such as wealth preservation, elder law, healthcare, land use, construction, commercial litigation, environmental, employment, education law, tax and business law are some of the areas that the suburban law firm should prioritize. This is where the low hanging fruit can be found. As the regional, national and international firm grows, so does the size of the client they desire to represent. No longer do they want to represent the local auto dealership group or community hospital. Now, they are marketing to the automobile makers, such as Ford and GM, and large hospital chains and insurance companies like Tenet and Blue Cross/Blue Shield. As new doors open to the suburban law firm, they find that they are now competing for larger clients. So the clients who had previously dealt with the Shaw Pittmans and Piper Rudnicks of the world are now looking at law firms with top-flight attorneys who have handled sophisticated matters and who also possess the depth of talent in the law firm to do the job. Law firms who have 50-150 attorneys now have the opportunity to fill the bill.

Pricing of the legal product is another important variable when corporate counsel are compelled to watch their bottom line. The fact that the suburban law firm has a much lower overhead gives them a competitive advantage. At the same time, the level of talent is very competitive when compared to the largest law firms in the land. In fact, most attorneys in our suburban prototype have both practiced with the urban firm and have been trained by these larger firms. What may be lacking is the depth of legal talent and the breadth of capability of the urban firm. Practice areas such as sophisticated intellectual property matters, securities work and handling matters involving the FCC and FDA will generally be left to the regional, national and international urban law firms. So will the bet the company piece of litigation.

The prototypical suburban law firm is a new species of law firm who will continue to prosper. Building this unique model is a challenge for those of us who fall into this category.

Over the last 10 years, I have attended a number of leadership, management and other seminars pertaining to the direction that law firms must take in order to be successful in the 21st century. What ensued was years of frustration. I never felt like our firm fit into any of the categories of law firms that would prosper in the ever-changing legal environment. We weren't a national, regional or international law firm. We weren't a boutique. Yet each year our firm grew both in size and financially. In 2003, our profits-per-equity-member reached $425,000. We are competitive economically with the large law firms, yet we are having more fun.

The 'Suburban' Firm

I decided that there had to be something that all the fabled consultants were missing. That's when I began to build the model for a new species of law firm that I call the “suburban law firm.” This type of firm differs from the traditional regional, national and international firms that I call the “urban law firm.”

Today there are certain inefficiencies in the legal market that allow a talented, well-designed suburban firm to prosper.

The suburban firm has the advantage of being convenient for their client base. Our firm has five offices that are easy to access and parking is a breeze. At the same time, the suburban location comes chock full of economic goodies. The rent that we pay for office space is 20%-40% less than the rents charged in Baltimore City and Washington, DC. We offer employees free parking and an easy commute. It's convenient for our attorneys to go to their child's afternoon lacrosse game and return to the office and work for a few hours. If you juxtapose the commute of an attorney to an office in the city versus the time spent traveling to a suburban office, we find that each of the lawyers and paralegals gain 4-8 hours per week – hours that they can spend in the office billing clients, marketing and maintaining client relationships. On weekends, it is easy to stop by the office and spend a few hours cleaning up one's desk. Since parking is free, there is an additional economic incentive derived by the firm. Whereas the cost of parking in the urban location can range from $150 to $300 per person per month. The overhead for the suburban law firm's business operations is substantially lower than the urban firm.

Our firm has also avoided getting caught up in the spiraling associate wage inflation. We can attract young talented associates from local law schools who are ranked in the top 15% of their law school class. We sell them on quality of life issues such as lower minimum hour requirements (1800 hours) and more emphasis on spending time with their family. They are also given more client contact and responsibility at an earlier stage of their career. We also inculcate our young attorneys with an entrepreneurial and marketing spirit. We have found that lifestyle issues and client interaction are attractive to this new generation of attorney. Their compensation at the suburban law firm is 25%-40% less than the larger urban law firm.

At the same time, our firm has been able to attract talented, well-trained attorneys with practices at the $150,000-$400,000 level. We look for highly trained attorneys with 8-15 years of experience who are not as attractive to the larger regional and national law firms. Their practices are generally too small for the larger law firm and their clients don't mesh well with the urban law firm as the larger firms move up the food chain. As an example, we recruited two attorneys from a large regional firm of 400-plus attorneys. One was a corporate attorney with a cadre of health industry clients, and the other was a top-flight healthcare attorney. When they joined our firm, they were able to tell their clients that their billable rates had dropped from the $375-$400 an hour level to a $290-$310. At the same time, they were located in a firm that was a 5-minute car ride from the client's health care facility. In a little over 1 year, both attorneys substantially increased their practices. Marketing became easier in the suburban setting, and clients who couldn't afford their fees at the larger urban firm returned in droves.

Finding a Niche

A suburban law firm seeks certain types of clients ' wealthy individuals, small businesses, local work for public sector representation and publicly traded companies. Practice areas such as wealth preservation, elder law, healthcare, land use, construction, commercial litigation, environmental, employment, education law, tax and business law are some of the areas that the suburban law firm should prioritize. This is where the low hanging fruit can be found. As the regional, national and international firm grows, so does the size of the client they desire to represent. No longer do they want to represent the local auto dealership group or community hospital. Now, they are marketing to the automobile makers, such as Ford and GM, and large hospital chains and insurance companies like Tenet and Blue Cross/Blue Shield. As new doors open to the suburban law firm, they find that they are now competing for larger clients. So the clients who had previously dealt with the Shaw Pittmans and Piper Rudnicks of the world are now looking at law firms with top-flight attorneys who have handled sophisticated matters and who also possess the depth of talent in the law firm to do the job. Law firms who have 50-150 attorneys now have the opportunity to fill the bill.

Pricing of the legal product is another important variable when corporate counsel are compelled to watch their bottom line. The fact that the suburban law firm has a much lower overhead gives them a competitive advantage. At the same time, the level of talent is very competitive when compared to the largest law firms in the land. In fact, most attorneys in our suburban prototype have both practiced with the urban firm and have been trained by these larger firms. What may be lacking is the depth of legal talent and the breadth of capability of the urban firm. Practice areas such as sophisticated intellectual property matters, securities work and handling matters involving the FCC and FDA will generally be left to the regional, national and international urban law firms. So will the bet the company piece of litigation.

The prototypical suburban law firm is a new species of law firm who will continue to prosper. Building this unique model is a challenge for those of us who fall into this category.