September 22, 2006
Do BigClients need BigLaw more than 10% of the time?
Over the weekend I was lucky enough to be present at a very well-attended and, as always, insightful talk by my friend Paul Clifford. Paul is the former managing partner of a major Boston law firm, and is now a principal at Law Practice Consultants. In a Saturday presentation on marketing before the International Business Law Consortium, Paul mentioned that corporate legal work generally breaks down into 3 categories: 10% is "bet-the-company" work (where price is no object, and which mega-firms tend to control), 10% is "commodity" (i.e., cookie-cutter) work and 80% is "important" work.
That vast 80% category of "important" corporate legal work Paul talked about includes virtually all (95%) of the work my small boutique firm performs in transactional and corporate tax, litigation, environmental, lobbying, international, IP, etc. But that same 80% also includes the same work done by firms which are both bigger than and even smaller than mine--from 3000 lawyers down to, say, just 5 or 6 lawyers in a first-rate muscle boutique. So the point for me is that a total of 90% (80% "important" + 10% "commodity") of available corporate legal work is NOT the 10% bet-the-company work, and can be performed by a variety of different sized firms, assuming they have the talent. Though his comments using that breakdown were in large part about pricing legal services, Paul got me thinking. Bear with me:
The 250 largest American law firms range from 3200 to about 150 lawyers--a huge spread, with the "bottom" 125 of those firms starting at about 300 lawyers and best described as medium-sized. Here, however, we'll liberally refer to all 250 of them as "BigLaw" firms in the U.S. BigLaw gets pounded in legal weblogs for a variety of reasons. The attacks are rooted in everything from pure sour grapes and size-envy to thoughtful markets analysis and anecdotal reporting about who the GCs of BigClients are really hiring to get things done.
I like BigLaw. I am convinced that there's nothing like a BigLaw giant (to me, the 15 or so U.S. firms with more than 1000 lawyers) when the client needs a vast, dynamic library of people and high-level skills under one banner in several cities and countries. If BigLaw is in demand and making money--and clearly it still is--it could care less what people in the nascent blawgosphere think. BigLaw isn't reading blogs/blawgs. I don't even like the term BigLaw. It makes those who use it sound pathetic and small. Let's call all 250 of them "Mega-firms".
But one of the more sober takes of many Mega-firm detractors are that boutiques and "clusters of boutiques"--corporate law firms from 5 lawyers to 150 lawyers--can do the same work for BigClients that Mega-firms now do. And do perhaps even better and faster, and at the same rates. Corporate legal talent no longer resides soley in large law firms--and it certainly doesn't reside, in my experience, and my firm's and other firms' experience, in most of the firms on the NLJ 250 list. For bet-the-company (BTC) projects, which require lots of first-rate lawyers quickly, such as hostile takeovers, some M&A work and some litigation, some of the Mega-firms are still what BigClients need and will continue to need. But, like Boston-based Paul Clifford, most high-end consultants and other commentators think that the BTC work is perhaps 10% of legal corporate work out there, if that.
So what about the other 90% of available corporate legal work? Is there any reason why firms ranging in size from 5 to 150 lawyers with the right talent and specialities can't do that work for BigClients?
Posted by JD Hull at September 22, 2006 11:59 PM