Boutique Law Firms, Small Law Firms

Beyond Biglaw: Interview With A 'NewLaw' Pioneer (Part 1)

An interview with the COO of a law firm founded with the idea of offering clients and lawyers an alternative to Biglaw structure and rates.

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Blank Lawyer Type Sign or Shingle.I recently had the opportunity to meet in person, and then conduct 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. Over the course of our conversation, and as reflected in Marlene’s answers below, it became clear that we may be on the cusp of an explosion of a new breed of law firms entering the broader legal market. Lawyers considering launching their own firms, or joining existing ones, will likely benefit from the paths forged by firms like Potomac Law, and other smaller firms which embrace varied business models and approaches to success in a competitive legal services landscape. I hope that readers find the interview with Marlene as interesting as I found learning about the impressive firm she and her partner, Ben Lieber, have built.

GK: We at KSK have found it important, particularly as Biglaw refugees, to provide an easy categorization of our firm to others. In our case, we often say we are a focused boutique, or something along those lines. How do you characterize Potomac Law’s model?

ML: “New-model law firm” is typically the term applied to Potomac Law, but this label is very broad. Within the “new model” category, there is a spectrum of legal services providers, from high-end legal staffing providers to virtual firms offering shared marketing platforms to true law firms utilizing a distributed workforce. We put ourselves firmly in this last category. We often refer to our firm as a “traditional law firm with a modern twist,” which conveys that we offer a similar level of legal service and talent as a Biglaw firm, but with greater reliance on technology and telecommuting to reduce overhead and enable considerably lower rates.

GK: What are the similarities between Biglaw and Potomac Law?

ML: The typical Potomac Law lawyer is of the same caliber found in Biglaw — highly experienced in a particular field with excellent academic credentials and good client hands. That’s not entirely surprising considering most of our lawyers join us from Biglaw’s partner, counsel, or senior associate ranks. As in a traditional law firm, our lawyers often work collaboratively on client matters, particularly in the case of litigation and M&A work. We also have a healthy mix of rainmakers and service attorneys at our firm, as you would find in Biglaw. Another important similarity is the complexity of work — we have grown in five short years to develop very active practices in a range of higher-end fields, including patent, tech transactions, and IP litigation.

GK: What are some key differences between Biglaw and Potomac Law?

ML: The primary difference (other than billing rates!) is that we do not make use of a classic pyramid/apprenticeship model. Our lawyers have a minimum of seven years, and on average over 20 years, of legal experience; we do not have junior or mid-level associates. Clients often feel the best value is found at the senior associate and partner levels (where they avoid having to pay to train attorneys), and so we have built a firm around these profiles.

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That leads me to another key difference — office space. While we have the nice, well-appointed office space one might expect of a 60-lawyer firm, it is small — very small — and is meant more for team sessions, client meetings, and firm lunches than as a day-to-day workspace. Most of the work is performed remotely, again keeping our overhead down.

In addition to lower hourly rates, as a younger firm we have the flexibility to provide a greater range of fee arrangements, from fixed fee to success-based to other creative, shared-risk approaches. I should note that very often clients are content with our primary fee arrangement (low hourly rates), but we do work with them to shape alternatives where there is an interest.

All of the above is from the client perspective, but there are some important differences from the attorney perspective as well. We do not have minimum billable hours for attorneys, nor do we have origination targets for partners. That’s a function of our compensation model — we pay lawyers based on their billings and originations, typically at a much higher effective percentage than in Biglaw. Lawyers also have much greater latitude to set their own rates here. We believe that this model is a win-win: for clients, who enjoy lower rates, and for attorneys, who keep much more of what they earn.

GK: What are the downsides to your firm’s model?

ML: The freedom and flexibility of working remotely does come at something of a cost in terms of firm cohesiveness, as relationships among our attorneys form more slowly due to the distributed nature of our workforce. As a management team, we spend a lot of time thinking through ways to foster an increased sense of community among our lawyers and staff. We try to create opportunities for colleagues to get to know one another more quickly, as we recognize that informal interaction that happens spontaneously around the office water cooler is less likely in our model. Some of that happens naturally with the larger team-based matters, but to supplement we host firm events, such as regular Lunch & Learns with guest speakers, conferences, and happy hours, to bring lawyers together. Over time, lawyers feel part of the team as they cross-market their services and work on client matters together.

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Also, our model works best with lawyers who are comfortable with technology and working with people who are in different physical locations.

GK: Has anyone explicitly argued to you that your model is incongruent with providing sophisticated legal services to sophisticated clients? How do or would you respond?

ML: Not yet — and they are running out of time!

The way we see it, a common physical presence is no longer essential to delivering high-end legal services to a demanding corporate base with complex needs. A fine legal mind backed by a technology infrastructure, a communications platform, a collaborative environment, and a capable, responsive support group in the form of paralegals and legal assistants is more than sufficient.

And I think our experience has borne that out. Our clients are a diverse set, spanning multiple industries and ranging in size, from Fortune 500 companies to early-stage startups. Their legal needs are varied and often complex. We represent major multinational corporations, including 6 of the Fortune 100, and those clients have remained with us.

Thanks to Marlene for her thoughts, and we will be back next week with Part 2 of our interview.

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.

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