Small Law Firms

Christina Gagnier

The inevitable part of being a lawyer is that you need to work with other lawyers. If you thought you would be able to avoid this or have nightmares about law school classmates, then perhaps the practice of law that necessarily includes working with attorneys may not be for you.

As a small shop, it is important to evaluate how you work with other attorneys. Business is often referral-based and your reputation, which is gold if you are making your own way, will be based on how well you work with others. This does not mean being a doormat, but it does mean starting to understand how to build relationships or, in the least, be collegial with “opposing counsel.”

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The patent world can at times seem very small. The same firms, representing the same group of technology companies, pursuing the same strategies, both to maximize profits for their firms and to deliver results for their clients. Sure people move around, but the players in the larger sense are pretty static. Most patent cases are of limited importance to everyone but the parties involved as well. Sometimes a case has a broader scope, and becomes of interest to industry competitors or even investors. Every once in a while a patent case captures the public fancy, as Apple v. Samsung undoubtedly has, usually because of the nature of the parties involved or the ubiquity of the technology at issue. When that happens, the patent world can seem very big — global in scope, even.

Sometimes a little case can actually turn into a huge deal. When the Supreme Court gets involved, for example. Especially when the issue in the case has far-reaching economic implications for society at large, and not just for the litigants involved. I have seen a number of “big” patent cases during my career, but none has the disruptive potential of a case that is set for oral argument next week in the Supreme Court. From humble beginnings as a declaratory judgment action filed in an unusual forum for patent cases (District of D.C.,) the dispute between Alice Corp. and CLS Bank has grown into one of the most closely-watched and debated patent cases — ever. And deservedly so, because the viability of software patents is on the line. With major ramifications possible: for technology companies of all sizes, IP firms and lawyers, the courts, and the good old global economy as well….

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It’s one thing to say that you bill at $200 or $500 or $1,000 an hour; it’s another to actually collect those fees. Every time a client fails to pay a bill, you’re effectively discounting your overall rate. And while writing off $500 here or there may not seem like much, over the course of the year it can amount to several thousand dollars – which doesn’t take into account the added cost of chasing down clients to collect from them.

Of course, the best way to avoid getting stiffed is to obey Foonberg’s Rule: Get the money up front. Unfortunately, sometimes, you can’t predict the full cost upfront – and if the expected bill is mid-five figures or more, a client simply may not have that kind of money all in one place. Moreover, taking payment up front won’t guard against a client asking for a refund down the line if you haven’t vetted the client properly. So beyond upfront payment, here’s a list of tips to avoid getting stiffed:

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Juan Monteverde and Alexandra Marchuk

Last week, we wrote about lawyers leaving Faruqi & Faruqi, the litigation boutique that’s locked in an ugly legal battle with a former associate, Alexandra Marchuk. Marchuk’s lawsuit accuses F&F partner Juan Monteverde of severe sexual harassment and alleges that the firm’s leaders turned a blind eye to his misconduct.

We asked our readers for more information about the recent Faruqi departures. Well, ask and you shall receive. We have the details on the lawyers who left — as well as info about how Faruqi is looking for laterals, and how much it pays them (hint: not enough)….

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Christina Gagnier

Upon some initial success as a law firm, a key question that is faced is what is the appropriate trajectory for growth. This is simply the fancy way of saying, “Do we have enough money for new things?”

New things may include real office space, an administrative assistant, or your first associate. If it is really your first “expansion” conversation, it could include items like finally getting your RingCentral account for faxing or upgrading to a paid Dropbox account. Regardless of what stage you are at in terms of your growth, it is important to pause and make sure the particular amount of growth is right for you…

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Growing up in Biglaw, I always thought pricing services for clients was easy. Conversations with clients went as follows: “Our rates range from X to Y, and are very competitive with our peer firms. If you have the audacity to ask for a break on these prices, we can offer you a 10% ‘courtesy discount,’ but will include language in our engagement letter allowing us to recoup that discount and more a few months into the engagement.” Of course, even in the mid-2000s (crazy that those days are nearly a decade ago), X was roughly the monthly lease payment on a well-equipped Honda Accord — for the least “experienced” lawyer in the entire firm — and Y was in the range approaching the monthly mortgage payment for a decent-sized colonial in a “pleasant” suburb. That was how things were priced, and depending on your firm, your rates were either considered cheap or expensive. But that categorization was always relative to other firms in your city, with a usually self-selected “peer group.” So there was always a “premium” (but unnecessary) firm more expensive, and on the other end of the pricing spectrum, a “discount shop” that could be sneered at for trying to undercut the market with low prices aimed at masking subpar legal ability.

When there was a surplus of demand for Biglaw’s services, the above approach was a tenable one. Once that surplus turned into a surfeit, firms needed to get a little more creative. At first, the tendency was to simply offer bigger discounts, with the “courtesy 10% off” turning into 25% off or more. Then clients started informing their firms of new “billing guidelines” where certain types of work would no longer be billable. Or where certain lawyers, such as junior associates whose time would no longer be paid for by clients, were magically transformed from revenue-producers for the firms that hired them to deadweight cost center investments in the “firm’s future.” Add in competition from other firms for a shrinking pie of business, and thinking about pricing became more rigorous. In fact, pricing expertise is one of the only Biglaw job skills with a growing rather than shrinking potential employment base….

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I like to say that I went solo because I had no other options — but I chose to stay solo when I started a family.

I started my law firm at the end of 1993 because I’d been downsized for economic reasons and couldn’t find another job. Three years later, the economy picked up and job offers came my way — but I was newly pregnant, and the prospect of the 50-hour work week that one of my prospective employers described didn’t interest me at all. So I figured that at least for the time, I’d remain solo because I was certain that working for myself was the best option for raising children.

Fast forward seventeen years, and my conviction that solo practice is a family-friendly work option is no longer as black and white as it was back then before my daughter was born. That’s not to say that I regret my decision – because I don’t. But here, on the other side of child-rearing — with one daughter in high school and the other on the cusp of college — I’ve realized that there’s really no easy or perfect solution to balancing work and family — whether you’re a solo or a big-firm attorney. All you can do is evaluate the facts and make the best decision for yourself and your family based on the facts in front of you.

Of course, when it comes to research about work-life balance, that’s where things get tricky….

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Keith Lee

Earlier this week, Carolyn Elefant questioned the value of joining bar associations. Particularly their value in generating business for solo and small firm practitioners. Elefant found bar associations lacking in regards to business development, and generally seemed sour on participation in bar associations for smaller firms. Though she did note a few exceptions:

“I’m not suggesting that solos and smalls steer clear of bar membership entirely; after all, bar associations provide a myriad of practice benefits including substantive information on practice trends, affordable continuing legal education (CLE), and advice on starting and running a law practice.”

While I’m inclined to agree with Elefant regarding the operation of small firms most of the time, in this instance, I have to disagree….

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Juan Monteverde and Alexandra Marchuk

Alexandra Marchuk’s headline-grabbing lawsuit against her former firm, Faruqi & Faruqi, has generated a lot of headaches for the firm. It has given rise to some bad PR. It has created client concerns. It has distracted the firm from its mission of shaking down corporate America vindicating shareholder rights.

And is it now causing the high-profile boutique to lose lawyerly talent? Here’s what we’re hearing….

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Christina Gagnier

Since it is top of mind for many right now, law students and lawyers alike, a discussion of the recently released rankings is likely due. This is something that I admittedly was interested in as I was applying to law school and has been something that my partner and I have been contacted about year after year since we graduated from our alma mater.

The reason we are contacted, though, is out of the sheer disbelief that two women from a Tier 2 law school (then Tier 3, and now Tier “not so sure”) could just walk out of law school and start a firm. It seems to be shocking that this could have occurred.

This is the part of the legal field where rankings matter a lot less than intelligence, perseverance, wit, and the plain-old willingness to roll up your sleeves and get to work to build your law practice…

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