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June 14, 2010

Redux: "An aggregation of narrow views". Curse of the modern law firm?

Years ago, I was a partner in a D.C. branch office with about 40 other partners firm-wide and several offices in the East and Midwest. This financially successful and very able law firm was my home for 12 years. I was fortunate through some good mentors--which I hustled to get--to have an interesting corporate practice in federal courts litigation, energy and environmental law. However, I was amazed to watch over the years how narrow (i.e., insular) a lot of the firm's brightest stars became in their practices--and how that insularity seemed to be carried from one associate class to the next.

In short, our "specialty culture" and "largeness" had worked against us. We weren't building broad-gauged lawyers anymore. Partners who had been friends for decades rarely knew how to explain (much less cross-sell) what other partners did. Worst of all, the art and ethos of seeing lots of different multi-disciplinary issues while working for a client was no longer valued. The result: (1) highly-talented but narrow and "non-collaborating" specialty fiefdoms with rare overlaps; (2) less value and lower efficiencies for clients.

Below is a November 11, 2008 post--not our normal re-run--based on the wisdom of two fine lawyer-writers. A very belated thank you to Rees Morrison and Carolyn Elefant; people in my firm think about this idea and these phrases of yours every day as we try to build a law firm with lawyers who are specialized--but also have big-picture sensibilities for large corporate clients.

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"Boom. Morrison nails it. Elefant names it." (Photo: HBO)

"An Aggregation of Narrow Views": Curse of the Larger Law Firm?

By "broad-gauged" lawyers, I mean law firm leaders and facilitators who, in addition to their own specialties, have an "expansive frame of reference" about the world, business, other practice areas, and how they all fit together.

Thanks to Carolyn Elefant at Legal Blog Watch, and the alert eye of the mysterious Ed. of Blawg Review, I read Rees Morrison's comprehensive and perceptive piece in the New York Law Journal about what larger law firms can and cannot do for clients. It's called "Why Law Departments Should Beware Super-Sized Firms". Despite its title (apparently given by ALM editors to get our attentions), Morrison's article is thoughtful, fair and generally flattering to large law firm (1000 plus lawyers) cultures. On size, we're talking about total headcounts here, not gross revenues or profits per partner. There are about 30 in the world this size (1000 or more)--all out of the UK and the US--and at that size they are a relatively new phenom.

My take, and orientation: I "like"--and have always liked--"larger firms" more than I like smaller ones, even though I am a shareholder in an aggressive and varied boutique that works all over the U.S. and abroad in some unique ways. I am a product of one, and in my own firm prefer senior lawyers who made partners in one as my colleagues, and associates who can work at one (but have advisedly chosen not to) as associates.

In fact, I strongly prefer "larger" firms--Morrison uses 1000 lawyers as a number, but let's use 500 or more lawyers here--even while many larger firms don't get, and will never get, the client service cultures they will need to survive. But I do like their energy, combativeness, spirit and moxie, when those features are present. If I don't know where to go, I go there; a functional larger firm with good leadership and management is a wonderful library of humans you just don't get everywhere. And seven or eight ideas or viewpoints is always better than one or two.

(By the way, small and medium-sized firms often make noises that their size somehow naturally ensures a greater "client service" focus in their performance. Well, this is a huge, if entertaining, crock. Smaller firms as a group are way less CS-savvy than larger firms because, unlike their bigger brethren, they have never really thought about, studied, implemented or "enforced" CS regimes at their shops. Reasons: many smaller and medium-size firms make money and survive in spite of themselves; think they already "know" about CS; or think they don't really need to know about CS.)

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"I want Quarterbacks--not dweebs. Value--not size. Send me workaholics with brains and perspective who don't all dress like goddamn FBI agents." (Photo: HBO)

Moreover, I buy into three different notions about larger firms. First, more aggressive and competitive lawyers, and some very fine law students, are attracted to larger firms. Second, to the extent those firms represent corporate clients--and most of them do--the work is often way more interesting, complex and challenging than you will find at smaller firms. Third, larger firms do try to hire, and pay for, promising young lawyers, even if their younger talent is unproductive and a drain in the first few years. So, as a general rule, if you are that rare GC who doesn't know the terrain yet, and have no idea where else to turn, by all means go to a big firm first. I can name seven or eight good ones between 500 and 3000 lawyers and professionals in five or six key practice areas that my firm, and other boutiques, conduct as well. Why not? The talent is there. It's still a good bet.

The Hitch: That talent. It's there somewhere--not throughout, and not in all areas--and you do have to find it.

On talent, both abroad and in the U.S., large law firms currently are a double-edged sword. They do have, and always will have talent; however, in recent years, they've diluted the gene pool on lateral hires in order to get bigger. So Ferraris, Jaguars, Chevy Aveos, pick-up trucks and rickshaws all run together on the same track. And large firm offices in smaller cities abroad can be spotty, mediocre and even scary. (Do you really want "Borat" as your company's lawyer in, say, Eastern Europe?--because that is what you might get.)

Many, if not a majority, of the partner-level lawyers my firm has seen in cases and transactions over the past ten years from "name" law firms have been disturbingly mediocre, and are often malpractice threats to their own firms. Morrison, who is one of the few writers to even mention this, calls it "global coverage, but inconsistent quality and coordination". I think of it as the "Borat syndrome"--and in larger firms you see it both in the U.S. and abroad.

Further, and as Morrison points out, there are in larger firms troublesome inflationary pressures on hours billed. Value questions. Forget about what the markets will bear; on a good day, first and second year associates are worth about -$50.00/hour, once you factor in what it takes to teach, guide and monitor them, and "remediate" their work.

"An aggregation of narrow views." The biggest problem, however, and one I don't see a solution to any time soon, is what Morrison calls "deep specialization, but narrower perspective". Oddly, in the last year I have heard two in-house counsel mention this themselves about mega-firms: they are seeing few "broad-gauged" lawyers. By this, I mean leaders and facilitators who, in addition to their own specialty, have an expansive frame of reference about the world, business, other practice areas, and how they all fit together.

As Ari Gold would say, "Boom!" Morrison has nailed the biggest substantive large law firm problem. In her summary of Morrison article at LBW, wordsmith and D.C. lawyer Carolyn Elefant describes it the lack of "the ability to offer a broad perspective--only an aggregation of narrow views."

Bravo, Morrison, and Elefant.

Posted by JD Hull at June 14, 2010 03:02 AM

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