“We save you money because we staff cases leanly. We send in the Navy SEALs, not the Fifth Fleet.”
Do you really think the guy in here last week was saying, “We waste your money hand over foot. We send in the Fifth Fleet where the Navy SEALs would do”?
Or: “You get big firm lawyers at small firm prices,” and then, the next day, “You get small firm attention combined with the advantages of our many offices.”
So my ears perked up recently when I heard two large firms make pitches based on fundamentally different world views. The first difference was on the need for international offices….
Massive Firm One took the standard approach: “We have offices in any country that you can find on the globe. This gives us a huge competitive advantage. Some firms have a few offices in Europe. Fewer firms have an office or two in Asia. But we’re everywhere, in force. Whatever your needs, litigation or corporate, we have you covered around the world. We’re the epitome of one-stop shopping. Not only that, we give you guaranteed quality control. Other firms are trying to find local firms that can handle matters for sophisticated American companies. We know our lawyers, and we have only lawyers who make sense for you.”
Massive Firm Two begged to differ: “We take pride in being predominantly an American firm. We have offices in all the major cities in the United States, and a few other offices in major financial centers around the world. But beyond that, we just don’t play this silly game of overseas expansion. The truth is, a lot of countries don’t have many good lawyers. Countries have small populations; lawyers are paid poorly, so the profession doesn’t attract the best and brightest; or there’s been a relatively trustworthy legal system for only a couple of decades. Those environments don’t breed lots of great lawyers. Our competitors are hiring poor-quality lawyers just so they can brag about international coverage, whereas we create a team for you with sophisticated Americans at the helm, and we then retain the best available local firm in any country where we don’t have an office.”
Mein Gott! I’m not sure who’s right and who’s wrong, but that’s real clash between two virtually indistinguishable firms. Both firms’ breads are naturally buttered with self-interest, but there’s room for reasonable minds to differ here. I’ll be curious to see how the passage of time identifies a winner.
I then saw the same thing on a different topic — what I’ll call “rate arbitrage.”
Massive Firm One simply doesn’t do it: “All of our lawyers, in all of our offices, handle matters on a national and international scale. Our lawyers are consistently top-notch, no matter where they live. Our lawyers’ rates vary by specialty, level of experience, and other things, but not by geography. We’re a truly national firm.”
Versus Massive Firm Two: “We have yet another way we can save you money. If you hire us for an important matter in New York, we can staff that matter with just one or two lawyers from our New York office, supported by a team out of our Northwest South Dakota office. Naturally our rates in Northwest South Dakota are much lower than our rates in New York, so we give you top-notch service at much lower cost. Firms that don’t vary rates by city are just cheating you. The cost of living is lower in smaller towns, our associate and partner salaries are lower, our rent is lower, and our cost of doing business is lower. It’s only fair that we pass those savings on to you, and we’re proud to do it.”
That again is a fundamental difference in philosophy, and it’s not obvious who’s right. From a marketing perspective, neither pitch is likely to open a door that isn’t otherwise open anyway. But if you thought all law firms were pursuing the same brass ring, either that isn’t true or one of these two massive firms is doing a fine job of turning its lemony office and rate structure into lemonades.
Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link).
You can reach him by email at firstname.lastname@example.org.