Attractive Prospects for Suburban Law Firms

[Editor's note: Two panelists in the Recruiter Views article note current economic trends that favor midsize firms. In this article, the managing director of a suburban midsize firm describes how to position such a firm for profitability.]

Over the last 10 years, I attended a number of leadership, management and other seminars on the direction law firms must take to be successful in the 21st century. Exasperatingly, our Towson-based firm, just outside Baltimore, never seemed to fit any of the categories of firms that were expected to prosper. 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 ' and we are having more fun.

Having decided these seminar consultants were missing something, I began to define a new species of prosperous law firm I now call “suburban.” This type of firm differs from traditionally urban-based regional, national and international firms. Moreover, it is precisely because there are inefficiencies in the urban legal market that talented, well-designed suburban firms can prosper.

Efficiencies of the Suburban Firm

The suburban firm has the advantage of being convenient for its client base: our firm has five offices that are easy to access and where parking is a breeze. Parking is also free to our employees and to the firm, whereas the monthly cost of parking in the urban location can range from $150 to $300 per person.

Our offices are more accessible to employees as well. It's convenient for our attorneys to go to a child's afternoon lacrosse game and then return to the office to work for a few hours. By not having to commute into the city, our lawyers and paralegals gain 4 to 8 hours per week ' time 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.

The rent we pay for suburban office space is 20-40% less than city rents in Baltimore and Washington. Overhead for our suburban business operations is also substantially lower than for urban firms.

Suburban Recruiting Successes

Lower costs have helped our firm avoid getting caught up in associate wage inflation. Offering a compensation level 25-40% less than at larger urban firms, we can nevertheless attract talented young 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 billable hour requirements (1800 hours) and more emphasis on spending time with their families. 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.

At the same time, our firm has been able to attract experienced attorneys with practices at the $150,000-$400,000 level. We look for highly trained and talented attorneys with 8-15 years of experience. Since the practices of the attorneys we seek are generally too small for big urban law firms, those recruits are less attractive to the larger regional and national law firms; moreover, their clients don't mesh well with the big firms as the latter move up the food chain.

For 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 range to $290-$310. At the same time, they were located in a firm that was only a 5-minute car ride from the client's main facility.

In a little over 1 year, both attorneys substantially increased their practices. Marketing became easier in the suburban setting, and former clients who couldn't afford their fees at the larger urban firm returned in droves.

Finding a Niche

With corporate counsel now compelled to watch the bottom line, the lower prices a suburban law firm can offer give it 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 trained and practiced in urban firms.

A suburban law firm does well to seek certain types of clients ' wealthy individuals, small businesses, and local work for public sector representation and publicly traded companies. Similarly, the suburban firm should give priority to such practice areas as wealth preservation, elder law, healthcare, land use, construction, commercial litigation, environmental, employment, education law, tax and business law. These areas are where the low-hanging fruit can be found.

As a regional, national or international firm grows, so does the size of the client it desires to represent. Now it is marketing to automobile makers, large hospital chains and insurance companies. No longer does the big firm want to represent the local auto dealership group or community hospital. The suburban law firm with 50-150 attorneys can therefore now compete for those midsize clients, which still require firms with enough depth of talent to do the job, including top-flight attorneys who have handled sophisticated matters.

On the other hand, sophisticated intellectual property matters, complex securities work, or matters involving the FCC and FDA should generally be left to the regional, national and international urban law firms. It may also be best for bet-the-company litigation to be handled by big firms with extremely deep talent pools.

Conclusion

Large urban-based and boutique law firms are not the only species that have the potential to prosper. The well-designed and astutely positioned suburban law firm is a firm model that can profitably provide high value to clients while also offering an attractive lifestyle to its own professional and administrative staff.

[Editor's note: Two panelists in the Recruiter Views article note current economic trends that favor midsize firms. In this article, the managing director of a suburban midsize firm describes how to position such a firm for profitability.]

Over the last 10 years, I attended a number of leadership, management and other seminars on the direction law firms must take to be successful in the 21st century. Exasperatingly, our Towson-based firm, just outside Baltimore, never seemed to fit any of the categories of firms that were expected to prosper. 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 ' and we are having more fun.

Having decided these seminar consultants were missing something, I began to define a new species of prosperous law firm I now call “suburban.” This type of firm differs from traditionally urban-based regional, national and international firms. Moreover, it is precisely because there are inefficiencies in the urban legal market that talented, well-designed suburban firms can prosper.

Efficiencies of the Suburban Firm

The suburban firm has the advantage of being convenient for its client base: our firm has five offices that are easy to access and where parking is a breeze. Parking is also free to our employees and to the firm, whereas the monthly cost of parking in the urban location can range from $150 to $300 per person.

Our offices are more accessible to employees as well. It's convenient for our attorneys to go to a child's afternoon lacrosse game and then return to the office to work for a few hours. By not having to commute into the city, our lawyers and paralegals gain 4 to 8 hours per week ' time 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.

The rent we pay for suburban office space is 20-40% less than city rents in Baltimore and Washington. Overhead for our suburban business operations is also substantially lower than for urban firms.

Suburban Recruiting Successes

Lower costs have helped our firm avoid getting caught up in associate wage inflation. Offering a compensation level 25-40% less than at larger urban firms, we can nevertheless attract talented young 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 billable hour requirements (1800 hours) and more emphasis on spending time with their families. 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.

At the same time, our firm has been able to attract experienced attorneys with practices at the $150,000-$400,000 level. We look for highly trained and talented attorneys with 8-15 years of experience. Since the practices of the attorneys we seek are generally too small for big urban law firms, those recruits are less attractive to the larger regional and national law firms; moreover, their clients don't mesh well with the big firms as the latter move up the food chain.

For 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 range to $290-$310. At the same time, they were located in a firm that was only a 5-minute car ride from the client's main facility.

In a little over 1 year, both attorneys substantially increased their practices. Marketing became easier in the suburban setting, and former clients who couldn't afford their fees at the larger urban firm returned in droves.

Finding a Niche

With corporate counsel now compelled to watch the bottom line, the lower prices a suburban law firm can offer give it 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 trained and practiced in urban firms.

A suburban law firm does well to seek certain types of clients ' wealthy individuals, small businesses, and local work for public sector representation and publicly traded companies. Similarly, the suburban firm should give priority to such practice areas as wealth preservation, elder law, healthcare, land use, construction, commercial litigation, environmental, employment, education law, tax and business law. These areas are where the low-hanging fruit can be found.

As a regional, national or international firm grows, so does the size of the client it desires to represent. Now it is marketing to automobile makers, large hospital chains and insurance companies. No longer does the big firm want to represent the local auto dealership group or community hospital. The suburban law firm with 50-150 attorneys can therefore now compete for those midsize clients, which still require firms with enough depth of talent to do the job, including top-flight attorneys who have handled sophisticated matters.

On the other hand, sophisticated intellectual property matters, complex securities work, or matters involving the FCC and FDA should generally be left to the regional, national and international urban law firms. It may also be best for bet-the-company litigation to be handled by big firms with extremely deep talent pools.

Conclusion

Large urban-based and boutique law firms are not the only species that have the potential to prosper. The well-designed and astutely positioned suburban law firm is a firm model that can profitably provide high value to clients while also offering an attractive lifestyle to its own professional and administrative staff.