I’ve been known to quip, “I thought I was wrong, once, but I was mistaken.” But I realize that my column here on Above the Law has often been “wrong” in at least one important way: I’ve compared apples to oranges.
For example, I authored a “top ten” list of differences between working in a big firm and working in a boutique. But many of the items focused on differences between employee and owner. I compared working where “you get paid either a salary or an hourly rate” with “running your own shop.” I compared “making all the decisions in my cases” with “waiting for a partner to act on my recommendations.” I compared doing the grunt work with making the important decisions.
That strikes me as comparing apples to oranges because all those comparisons actually contrasted being an employee with being an owner. That fundamental distinction accounts for many of the supposed differences between working in Biglaw and working in a small firm or boutique.
But what about associates who are considering becoming associates at a small firm or boutique? That’s the true apples to apples comparison. If you’re not starting your own business, but will instead remain an associate, what are the real differences when moving “From Biglaw to Boutique”?
Many attorneys who leave Biglaw for smaller or solo practices find themselves considering contingent fee cases, either by necessity or design. “By necessity,” because a practice may not have many paying clients when it first forms. “By design,” because an attorney working for a contingent fee has the prospect of hitting a huge payday and making many times what an attorney who bills by the hour can make.
The challenge of business development takes on a whole new meaning when applied to contingent fee lawyers. To some extent, a contingent fee attorney has the opposite problem of an attorney billing by the hour. There is no shortage of clients who want a lawyer they need pay only if they win. Thus, the contingent fee attorney always has too many potential clients whereas the hourly attorney always has too few.
Because attorneys can find themselves inundated with clients offering a contingent fee, evaluating which cases to take, and which to turn down, can be challenging. Essentially, taking a case on contingency is an investment of your time, energy, and financial resources. You need to carefully assess whether the investment is a good one….
Associates in both Biglaw and small should give some thought as to who is their most important client. Some might think that their most important client is their biggest or most prestigious one, or the one whose matter has the most at stake. This week at Morrison & Foerster and Quinn Emanuel, yearning associates might name Apple and Samsung, respectively.
Other associates might take a longer view, and answer that their most important client is the one with the greatest potential to offer them future business.
Still others might select the client for whom the associate has the most responsibility. For example, if you are one of three or four associates on several matters, but the primary or sole associate on another, you may view that latter client as your most important.
All these associates would be making a mistake by not understanding who is truly their most important client….
I’ve heard that a hungry dog hunts best. I don’t know if that’s actually true because my pugs were always hungry, and yet they could not have caught a three-legged turtle. But the saying makes sense, and I do know that staying hungry — but not desperate — is an important concept for law firms.
One way a young firm should stay hungry is to always search for new business. There are good reasons that I constantly harp on the importance of business development. Even if you are fortunate enough to be busy, you never know when your current workload may dry up. This is particularly true in litigation because any case can always settle or otherwise resolve unexpectedly. No matter how busy you are, you should constantly seek out new work and new clients.
But seeking out new work comes at a potential cost to your current cases and clients. You can’t be so desperate to grow that you spend so much time on business development that you ignore your current clients or let your current caseload suffer. Some lawyers take a churn and burn approach, trying to maximize their short-term return from every engagement, with no concern for the longer-term client relationship. To form a practice that’s built to last, you need to work hard to maintain those relationships, and that means you can’t neglect your current clients while constantly fishing for newer ones….
For attorneys starting their own firms, one of the more difficult things to learn is how much time to spend on a prospective client. Attorneys take various approaches. Some attorneys say, reasonably enough, I don’t work for free, and will do little more than quote their rates. Attorneys who employ mass marketing will offer a “free consultation,” but that generally amounts to little more than a way to encourage unsophisticated clients to call them as opposed to someone else.
If your business model depends on high volume of a particular type of case, it probably doesn’t make sense to devote too much effort to soliciting any one particular client. But if you are pursuing fewer, higher-stakes or more complex matters, then you very well could struggle with how to strike the proper balance….
Living in the San Francisco Bay Area, we are well accustomed to the concept of diversity. San Franciscans embrace it. They live among and celebrate people of every race, ethnicity and nationality. They embrace every sexual orientation. And they welcome political persuasions spanning the gamut from socialist to liberal. Ah, life’s infinite diversity.
I’ve mentioned before that when I snorkeled in the Cayman Islands, I was amazed at the vast number of different species of fish. When I go to a favorite deli or café, I’m reluctant to order “the usual,” however much I might enjoy it, because I’ve always believed that variety is good. The concepts of variety and diversity present themselves to us every day.
Diversity is also an important concept for law firms, especially smaller law firms and boutiques. And this is true of “diversity” in a variety of contexts, some of which are not so obvious….
I recently had a client ask me about asset protection strategies. Having read The Firm (affiliate link) before I ever went to law school, and mindful of the classic Tom Cruise movie of the same name, of course I did what any diligent attorney devoted to client-service would do: I headed off to the Cayman Islands to investigate.
Due to an unfortunate series of strange boating accidents which I am not at liberty to discuss, my trip ended up lasting a bit longer than I expected. My email and telephone conversations also became compromised, hence my extended ATL hiatus.
Alas, the good guys prevailed, I am back safe and sound, and I’m happy to write about some of my reflections from beautiful Cayman (pronounced, as I learned from the locals, “Cay-Man,” with two distinct, equally prominent syllables, almost rhyming with “Cave-Man;” not “Cay-min” rhyming with “layman”)….
Anyone who has been around children is familiar with the challenge of getting them to eat what you want them to eat. “My daughter won’t eat vegetables.” “My son only eats cheetos.” Like a lot of parents, I find myself frustrated by this dynamic. But I also have to laugh, because I know the solution is so simple. If someone is hungry enough, they will easily overcome their aversion to whatever particular food they think they don’t like.
For example, you might not like broccoli, and you swear you would never eat broccoli under any circumstances. But if you were on a desert island with nothing to eat except broccoli, it would not take very long for you to overcome, or at least overpower, your distaste. So, if you really want your kid to eat X, then just don’t allow them to fill up on not-X. Nature will take care of the rest. We’ve all got to eat, and a child won’t die from voluntary starvation any more than someone can kill themselves by holding their breath.
Like a lot of kids, mine have a very narrow range of food that they profess to like. Dinner, therefore, has a familiar refrain. The kids insist they don’t like X, and I tell them, “That’s fine. I understand you don’t like X. No one can tell you what you should like, and what you shouldn’t. You don’t need to like X if you don’t want to. Now shut up and eat it.”
Thus, “You Don’t Have to Like It” has become something of a mantra to me.
Partners love to emphasize to candidates who are interviewing that their firm provides not only “early responsibility,” but also abundant “client contact.” Associates who interview eat that stuff up. “Client contact” sounds like the epitome of what being a lawyer is all about.
But sometimes client contact might not be all it’s cracked up to be. For an associate, talking to a client often has little short term upside and lots of potential downside. If you give good advice, the partner is likely to take the credit for it. If you give bad advice, you better believe you will take the blame.
Once an attorney is blessed with significant client contact, they learn rather quickly that the much-vaunted experience can be rather overrated. More times than not, a ringing phone does not a happy lawyer make. Just consider some of the reasons why clients are likely to be calling….
Associates generally don’t have much room to negotiate salary or benefits in Biglaw. Beyond paying a premium for specialized skill sets (e.g., an engineering degree) or pedigree (e.g., a former Supreme Court clerk), those firms tend to pay a certain amount per class year with little variance among individuals. Among different Am Law 100 firms, there is relatively little variance. A few firms pay exceptionally well and a few others lag below market, but all the Am Law 100 firms have generally similar salary structures.
Not so with small firms, solo practices, and boutiques. According to the Robert Half Salary Guide, for example, the median starting salary for a first year associate at a ten-attorney firm in the San Francisco Bay area ranges between approximately $66,000 and $113,000 per year. That’s quite a spread. Of course, ten-attorney firms also vary so much from one to another that trying to compare salaries across firms often makes little sense.
Small firms thus have considerable flexibility in setting salaries, and associates have significantly more room to negotiate their salaries in the small firm environment. Granted, associates at small firms will tend to make less — sometimes significantly so — than their Biglaw counterparts. Be that as it may, valuing the worth of an associate to a small firm can be complicated.
Often, associates who are used to the Biglaw model both overvalue and undervalue their worth to a small firm or boutique….
Average law school debt for graduates of private universities hovered around $122,000 last year. With only 57% of new attorneys actually obtaining real lawyer jobs, recent graduates have a lot to consider when it comes to managing their student loan payments. Thanks to our friends at SoFi, today’s infographic takes a look at student loan debt, including the possible benefits of refinancing for JDs…
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.
The JOBS Act created new tools for companies to publicly advertise securities deals online. As a result, thousands of new deals have hit the market and hundreds of millions in capital has been raised, spurring a wealth of new business development opportunities for attorneys.
Fund deals, startup capital raises, PIPE deals and loan syndicates are just a handful of the transactions benefiting from the JOBS Act. InvestorID FirmTM is a platform designed to help attorneys equip their clients with the workflow, marketing and compliance tools to publicly solicit a securities offering online. By providing clients with the tools to painlessly navigate the regulatory landscape of general solicitation, InvestorID FirmTM helps attorneys add value above just legal services.
The Jumpstart Our Business Startups Act (JOBS Act) went into effect in 2013 and permits Regulation D offerings of securities to be advertised publicly. This means that funds and companies can now use social media, emails and web sites to market transactions to new “accredited” investors.
However, with these new powers come new pain points. InvestorID FirmTM provides a secure, fully hosted, cloud-based platform with a breadth of tools for your clients, including: