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Reinventing The Law Business: Where Is The Legal Profession Heading? (Part 4)

Managing partner Bruce Stachenfeld to regional law firms: sorry, but being regional is not a viable strategy.

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This is the fourth article in a four (now five) part series dealing with my predictions for the future of different types of law firms as the legal profession changes. In this five-part series I will be writing about:

  • Branded Law Firms
  • Super Mega-Big Vereins
  • Pure-Play Law Firms
  • Regional Law Firms
  • Single-City Law Firms
  • Solo Practitioners and Firms with Less Than Ten Lawyers

In the previous three articles I wrote about Branded Law Firms, Super Mega-Big Vereins, and Pure-Play Law Firms. In this fourth article I will discuss Regional Law Firms and Single-City Law Firms.

Along the way, I thought more about Solo Practitioners and Firms with Less Than Ten Lawyers and realize that that deserves its own article, so I will leave that for a fifth article in this series. So I thought this was a four-party series but it is really going to be a five-part series.

I will start with Regional Law Firms and say sorry, but I guess I just don’t see this as a viable strategy. What does a “region” have to do with attracting lawyers or clients? I am trying to sit in the shoes of a lawyer or client and I just can’t figure out why the fact that a law firm was dominating a “region” would matter to me.

So my prediction is that these law firms will have to succeed by either being cheaper than the major Branded Law Firms (which will result in limited upside) or picking locations that the major Branded Law Firms don’t practice in. And if this is the case, then I don’t see any advantage to being a regional firm over a single-city law firm described below. If all they have to sell is their regional “dominance” (which I doubt exists in the first place), I suspect they will either die out, be absorbed by a larger national or international player, limp along with low profitability, or change their thinking in the way I am about to advocate.

My advice for these regional firms is this:

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  • Make your strength not based on geography (which I think is a red herring). Instead make it based on a practice area specialty or other value proposition (sort of like a pure play).
  • Then, if, and only if, the firm can attract top New York City talent, use that to open a New York office (i.e., within the practice area specialty or other value proposition).

I don’t advocate this latter point because I think New York is the center of the world and I am geo-centric in my thinking. It is just that New York has a marketing cachet with lawyers and clients. Plus New York exports an awful lot of legal work out into the remainder of the country. Having a New York office and the ability to do work in other locations – at lower prices – can be very advantageous. However, one must be mindful that attracting low-quality lawyers in New York not only will not help but can be disastrous, as it will be a major economic drain with no upside.

I do note that the combination of a strong, work-exporting New York office, coupled with non-New York offices that are less expensive can, if properly managed, be a great advantage and strategy, as it can provide an excellent value proposition to clients. I caution that this is by no means easy to pull off management-wise.

As far as lawyers starting their careers in these firms, or making partner, or joining these firms, my advice is that the concept of the “region” should not drive the thinking. Instead, the thinking should be based on what reason to exist the firm has other than dominating a region.

I move on now to Single-City Law Firms. Single-City Law Firms can be (kind of) pure plays, and strong business models, if handled and managed properly. I don’t think you could pull that off in, say, New York, Chicago, San Francisco, L.A., D.C., or Miami, since the markets are too big and powerful. However, in a city that is not that large, I think being the acknowledged “top law firm” in that city is a very powerful advantage. It is a lot like being a pure play. You “own” a niche in the market, which is strong. Indeed, if we are doing a deal in a smaller-sized city, we always would want the top law firm in that city as local counsel for our clients.

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As far as lawyers starting their careers in these firms, or making partner, or joining these firms, my advice is the same as the advice I gave — in prior articles — about pure plays in general. The same thinking applies here, namely, if you are sure this is the city where you want to make your home, then this is the best place to start a career or to enhance or grow a career (always being mindful of course of the cultural fit).

I will be continuing this discussion in the next article in this five-part series.

Earlier: Reinventing The Law Business: Where Is The Legal Profession Heading? (Part 1)
Reinventing The Law Business: Where Is The Legal Profession Heading? (Part 2)
Reinventing The Law Business: Where Is The Legal Profession Heading? (Part 3)

Bruce Stachenfeld is the managing partner of Duval & Stachenfeld LLP, which is an approximately 70-lawyer law firm based in midtown Manhattan. The firm is known as “The Pure Play in Real Estate Law” because all of its practice areas are focused around real estate. With 50 full-time real estate lawyers, the firm is one of the largest real estate law practices in New York City. You can contact Bruce by email at thehedgehoglawyer@gmail.com.

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