From Biglaw to Boutique: The Bigger They Are, The Harder They Fall
'David versus Goliath' captures the challenge a smaller firm faces when litigating against an AmLaw 200 firm. A small firm can feel like David when facing a larger firm that can bring more resources to bear on legal research, drafting motions, reviewing documents, etc. So how can a small firm, especially representing a smaller company, effectively litigate against a proverbial army of lawyers representing a client to whom money is no object?
I hate to invoke a cliché, but “David versus Goliath” captures the challenge a smaller firm faces when litigating against an Am Law 200 firm. A small firm can feel like David when facing a larger firm that can bring more resources to bear on legal research, drafting motions, reviewing documents, etc.
The challenge increases when applied to clients. Many of my firm’s initial clients were startups or emerging companies with limited litigation budgets. Their adversaries often were much larger, established companies with seemingly unlimited budgets. Thus, we faced not only the challenge of litigating against brand-name firms with hundreds of attorneys, but we also initially had clients who simply could not afford to spend as much in legal fees as their well-heeled opponents.
So how can a small firm, especially representing a smaller company, effectively litigate against a proverbial army of lawyers representing a client to whom money is no object?
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That’s actually a trick question. There is no such thing as a client to whom money is no object. No matter how much money someone has, they never want to waste it. A company may have a substantial litigation budget, but they still want to spend it wisely and not spend more on legal fees than they could to settle. When your opponent’s legal budget is much larger than your own, it’s easy to think that money is no object to them. But fees always matter. Understanding the economics of the litigation vis-à-vis your adversary’s budget and expectations is extremely helpful for a smaller firm to understand.
If you understand big firm staffing, procedures, work flow and hourly rates, you can get a pretty good idea of how much various tasks (e.g., responding to discovery requests) will cost your adversary. The relative economics usually heavily weigh in favor of the smaller firm. A small firm might spend several hours to prepare discovery requests, and the Biglaw firm will spend ten or twenty or more hours to respond, and at a much higher billable rate. This spending disparity becomes especially acute when a case is actually going to trial.
As for the size of the client, that, too, can become an advantage for the little guy. If a client is a small company or individual, it will have fewer documents to produce. The larger the party, the more that document discovery will cost. Understanding this dynamic can be critical.
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Small can be advantageous when it comes to depositions, too. For a smaller client, litigation in general, as well as depositions of key personnel, admittedly can be time-consuming and distracting. But large companies perceive depositions of their high-ranking executives to be equally undesirable.
Smaller firms can also take comfort that at least some of their clouds have silver linings. For example, a big firm has greater ability to cover hearings, depositions, or other dates with less likelihood of scheduling conflicts. However, this disadvantage is offset by the fact that a court is more likely to be sympathetic and offer scheduling accommodations to a smaller firm or solo.
Small law firms should recognize and capitalize on their unique strengths. An attorney with a smaller client can more easily master the intricacies of the client’s business, as well as learn about the personalities of the decision-makers, including their motivations, goals, and tolerance of risk. And the partner managing a case in a small firm is more likely to know the details and nuances of the matter than a Biglaw partner who has delegated most or all of the day-to-day work to associates.
Of course, no amount of knowledge or strategy will make up for a lack of skill in execution. A litigant always has to prove itself to its adversary, and this is especially true for smaller firms. When litigating against big firms, it can be helpful to demonstrate early on that your team is capable of producing work product at or beyond the level of your opponent. Early written briefing in a case can be important for sending a message and obtaining the leverage that ultimately will be needed for potential settlement if not trial.
Even “sandbox disputes” over discovery or other mundane issues can take on added importance. Small firms can’t be overly afraid of motion practice. When push comes to shove, it can be important for smaller firms to show they are willing to take appropriate disputes to court. No one wants a fight but sometimes they can’t be avoided and sometimes you want a court ruling. Unlike a real sandbox, in litigation you can’t just take your ball and go home.
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Finally, if nothing else, at least big firms are somewhat predictable in how they approach litigation. Rarely will their tactics diverge from the traditional, so you always know what to expect. In some ways, an erratic, unpredictable pro se opponent can be more difficult in litigation than an Am Law 200 firm which follows a well-known playbook.
For all these reasons, I know it is possible for a small firm to out-litigate a bigger opponent, even if the client has a smaller litigation budget. This all comes with a huge caveat: the small firm has to have sufficient resources and skill to handle a particular matter. But for a firm that does have the resources and skill, the size of the adversary firm or client shouldn’t matter. For law firms and Philistines alike, the bigger they are, the harder they fall.
Tom Wallerstein lives in San Francisco and is a partner with Colt Wallerstein LLP, a Silicon Valley litigation boutique. The firm’s practice focuses on high tech trade secret, employment, and general complex-commercial litigation. He can be reached at [email protected].
