Beyond Biglaw: Interview With A 'NewLaw' Pioneer (Part 2)
The conclusion of an interview with the COO of a law firm offering clients and lawyers an alternative to Biglaw structure and rates.
Last week was part one of a written interview with Marlene Laro, partner and chief operating officer of Potomac Law Group, a law firm founded with the idea of offering clients and lawyers an alternative to BigLaw structure and rates. I want to thank Marlene for sharing her insights, and for having the courage and wherewithal to build a successful new firm based on a business model that benefits both clients and the firm’s lawyers. While the legal industry can support a range of legal service providers, there is an expectation that NewLaw firms explain their model as compared to the classic pyramid/apprenticeship model embraced by traditional law firms. We pick up the conversation around that point….
GK: How important is the ability to compete with BigLaw on price/compensation when it comes to attracting talent and clients?
ML: Very. Law is a relationship-based industry, filled with long-term, durable representations. Disrupting those relationships is difficult and takes time, even with highly skilled lawyers working in a modern, efficient environment. If we were only marginally less expensive than the big firms, say 10 or 15 percent, I don’t think we would have gained the traction we’ve seen (60 percent compound annual growth rate over the last five years). But the substantial reduction in rate coupled with the terrific team has helped get us noticed.
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On the recruiting side, better compensation is one of a handful of key factors generating interest in our model, especially among the BigLaw partner set. Others are less bureaucracy, enhanced quality of life, greater ability to telecommute, and better work-life integration.
GK: What reservations have you encountered from GCs in developing the business?
ML: As with any new idea, it takes some time for mindsets to shift. Historically, the legal industry tends to be slow-evolving and risk-averse. I have heard the saying “nobody ever got fired for hiring Cravath” many times. It is understandable that GCs would still seek out Biglaw firms for “bet the company” litigation or big public M&A deals. At the same time, GCs understand that a significant amount of work performed by outside counsel does not require a Biglaw approach. Our value proposition – experienced lawyers at a fraction of the Biglaw rate – presents a good opportunity to try something new in those areas.
GK: How scalable is your model in terms of firm size and geographic expansion? When do conflicts become a bigger problem?
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ML: Our model is particularly scalable in terms of firm size and geographic expansion because our lawyers, management, and support team can work from virtually anywhere primarily relying on cloud-based technology.
As with any firm our size, conflicts do occasionally play a role (as they should), and we on occasion have had to decline a representation. But that is not a meaningful factor in our expansion calculus at this point.
GK: While your firm started with an unusually heavy concentration of female and minority lawyers, it looks like your expansion has not been limited to lawyers falling within one of those groups. Why, and what do you learn from that transition?
Marlene Laro
ML: We are very proud of our diversity. Over half of the firm’s management team, partners and counsel are women. Last month, Working Mother magazine named Potomac Law, along with Google, Facebook and Starbucks, as among the top 20 innovative companies in the crucial areas of women’s advancement and work life integration.
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At the firm’s founding in 2011, almost all of our attorneys were women. Interestingly, as we grew both in number and visibility, we received enormous interest from a greater variety of lawyers – female/male, rainmakers/service lawyers, full-time/part-time – as well as lawyers at different stages in their careers. We learned that nearly all lawyers enjoy the flexibility and autonomy built into our firm’s model, but often for different reasons. Initially, lawyers sought us out for the opportunity to work with a familiar colleague base on matters similar to what they had experienced in Biglaw, but with the ability to maximize work-life integration. Over time, we began to attract the interest of Biglaw partners seeking greater control over their rates and a higher portion of the fees they generated. Many of our lawyers billed at rates approaching $1,000/hour; those ever-increasing rates, coupled with Biglaw’s resistance to discounts, create much frustration for lawyers seeking to build – or even maintain – their practices. Other lawyers have concluded that our model enables them to be more entrepreneurial, a quality that is not always encouraged in Biglaw.
GK: Do you ever feel like you are giving up something by getting bigger or moving away from a primarily female/minority-staffed firm?
ML: Not really. Our growth has been steady – nearly 60 lawyers in five years – and purposeful. We are careful that the fit, both in terms of practice area and attorney personality and style, is a good one for our firm culture. And we have not departed much from our roots. As of now, our firm essentially reflects the composition of law school graduating classes in terms of gender and ethnicity. We believe that balance is – and remains – an essential part of our success.
Thanks again to Marlene for taking the time to chat. Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.
Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique. The firm’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.
