When a firm starts losing partners to its rivals and slowing down their hiring (or even conducting layoffs), it’s usually a bad sign. But one Biglaw firm that’s lost a number of high-profile partners over the last year is touting its new, streamlined approach. You see, they meant to suffer all those defections and lose some of their biggest clients. It’s all part of reinventing the firm for the modern business climate.
Is this just good public relations, or are they on to something?
Dickstein Shapiro had a rough year in 2013:
It experienced a 20 percent drop in revenue and a 35 percent drop in profits, declines that even in a challenging market for corporate law firms are considered sizeable. Since last summer, dozens of attorneys and professionals have left to join other law firms, including clusters that went to Crowell & Moring, Greenberg Traurig and Lowenstein Sandler. Today, Dickstein is at its smallest point in recent memory, with about 225 attorneys — nearly 40 percent smaller than it was five years ago, when it had about 360 lawyers.
That certainly doesn’t sound like a firm on the right track. But according to Jim Kelly, Dickstein’s chairman, everything’s fine and this is all part of adjusting to the new realities of law:
Central to Dickstein’s strategy is to be a more-focused, specialized firm rather than a global full-service legal behemoth. Its sweet spot is in insurance coverage — typically representing corporations suing insurance companies over contested claims. It also offers expertise in antitrust litigation, intellectual property, government law and strategy, and a niche practice representing companies being investigated or sued by state attorneys general offices.
“We aren’t going to be everything to everyone,” Kelly said. “We recognize that different practices have different competitive and strategic profiles, and we permit each of those practice groups to have some flexibility in how they’re going to deliver value to their clients, which is a significant departure from how law firms have been historically managed.”
These significant departures from traditional law firm management include experimenting with alternative fee arrangements and allowing individual practice groups to make their own hiring decisions. The firm also hired a chief operating officer to manage the firm to allow its lawyers more time to focus on being lawyers.
Kelly won’t disclose Dickstein’s 2014 numbers, but claims the firm is “on track.” Which is kind of incredible for a firm that lost its energy group and its biggest lobbying client. Former Speaker Dennis Hastert echoed the positive message when asked about the lobbying group and the loss of tobacco giant Lorillard to Greenberg Traurig:
Former House Speaker Dennis Hastert, the new leader of Dickstein’s lobbying group, is putting a positive spin on the loss of Lorillard’s business, which had forced the group to pass up on work in other industries, such as the medical and health care field, because of conflicts of interest. He described his group as “going through a catharsis.”
“We were limited in the kinds of clients we had before because we couldn’t get into medical stuff because of the clients we had,” Hastert said. “We couldn’t get into energy because of the clients we had. We’re able to expand into new horizons in areas we hadn’t been able to look at before because of the major dollar contributors.”
That’s a good story. But that sounds a lot like what Sterling Cooper said after losing Lucky Strike and that wasn’t really their finest business move.
Only time will tell if the new order at Dickstein will put the firm on solid footing for years to come, but if this works out for them as well as Kelly and Hastert predict, will more firms change their structure accordingly?