From Biglaw to Boutique: Beyond the 'Small Law Firm' Stereotype
For some, the phrase “small law firm” implies certain stereotyped practice areas, clients, and attorneys. At its worst, the stereotype invokes unsophisticated clients and matters that are routine and uninteresting. To break the stereotype, Tom Wallerstein remarks on some great practice opportunities for smaller law firms which exist in Silicon Valley....
For some, the phrase “small law firm” implies certain stereotyped practice areas, clients, and attorneys. At its worst, the stereotype invokes unsophisticated clients and matters that are routine and uninteresting. I doubt the stereotype is wholly true anywhere. I know for sure it isn’t true in San Francisco or Silicon Valley.
I know many attorneys in small firms who have specialized, high-end practices. These specialized practices are often called boutiques, and they are perfectly suited to serve the entrepreneurial, high-tech client base that abounds in the San Francisco Bay Area.
Even in the down economy, a number of new ventures were launched in Silicon Valley. Geographically, the high-tech corridor also seems to be expanding, thanks to Twitter, Zynga, SalesForce.com, and the like setting up shop in San Francisco. You don’t even need a Visa or traditional office space to launch a startup anymore; now you can enjoy Peter Thiel’s “Visa-free entrepreneurship and technology incubator on an ocean vessel in international waters.”
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It remains to be seen whether we’re experiencing a boom or just another bubble, but I guess it doesn’t matter anyway. I’m not an economist and I’m not making predictions. I am only remarking on some great practice opportunities for smaller law firms which exist here, maybe because we are fortunate to have so many imaginative, passionate, and savvy entrepreneurs working on exciting projects in so many different industries….
I’m not weighing in on how much money a solo, small, or boutique firm can make. I’m focusing on practice areas and types of cases that are especially well-suited for handling by smaller law firms or boutiques. Colt Wallerstein, for example, has only a handful of full-time attorneys, but we stay pretty swamped with practice areas that cater to the dynamic, high-tech business environment.
Here are just some of the practice areas that have proven well-suited for boutique treatment:
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Business formation and transformation: Last week I had lunch with a solo practitioner who helps startups formalize their structure. He has a large stable of rather sophisticated young companies to which he gives general business advice. Other small firm attorneys specialize in providing general employment counseling, another practice area in high demand in any environment where new businesses are forming. Small law general business attorneys handle plenty of work in Silicon Valley, although the competition is admittedly high.
Executive compensation: Creative compensation plans are a hallmark of Silicon Valley, and stock options remain a popular (and, from a lawyer’s perspective, fun) subject to litigate. My firm has litigated a number of executive stock option disputes, usually, but not always, on the company side. Often the employee with the options in dispute has a large sum of potential funds tied up in the dispute, so he might not be able to afford Biglaw rates notwithstanding the significant amounts at stake. There are a fair number of those kinds of clients who can use a lawyer with specialized knowledge about executive compensation.
Trade secret and employee mobility litigation: One of the reasons Silicon Valley is so ripe for innovation is because so much engineering talent, and so many potential partners and investors, live here. Employees constantly move from company to company. And every time an engineer, programmer, or sales person moves to a competitor, potential trade secret litigation is implicated. Heaven help the fool who makes a copy of his company’s hard drive or source code before he leaves to join a competitor; inevitably, his former employer will find out. Non-competition, non-solicitation, and similar agreements also result in a healthy amount of litigation and pre-litigation counseling.
Trade secret litigation can threaten the very existence of an emerging company, justifying specialized attorneys. On the other hand, a young company may not yet have the funding to hire a Fenwick & West or MoFo. My small firm has always been actively litigating at least one or two bet-the-company trade secret matters since we began in 2009. Even if both of the companies involved hire big-firm lawyers, the individual employee who is transferring from one employer to another can often benefit from solo or small-firm representation.
The same dynamic applies to trademark and copyright litigation; that is, those types of cases can have bet-the-company implications for businesses that are interested in a less expensive alternative to Biglaw. Often, a startup finds itself adverse to a competitor with much deeper pockets. A small firm like mine can find success if it can explain to these clients the importance of getting the highest value possible within their limited litigation budgets when facing trademark or copyright litigation.
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Intellectual property prosecution and counseling: High-tech businesses need specialized intellectual property counseling. Every new business out here knows enough to consider the need for protecting their IP, but remains largely ignorant of many of the important steps they could be taking. The result is that highly-qualified solo or small firm specialists can find a market for helping companies register their copyrights and trademarks, file their patent applications, and give advice about the best practices for protecting trade secrets and other IP.
I’m sure there are many more specialized practice areas that can be well-suited for solo or small firm practices. And although there are unique attributes of Silicon Valley, I don’t think these practice areas are unique to California. I’m sure there must be similar opportunities not only in New York, but also in the Route 128 area of Boston, the Research Triangle of Raleigh-Durham, and any number of other places where high-tech companies thrive.
In these and similar places, at least, boutique practices can be a whole lot more than the small law firm stereotype.
Tom Wallerstein lives in San Francisco and is a partner with Colt Wallerstein LLP, a Silicon Valley litigation boutique. The firm’s practice focuses on high tech trade secret, employment, and general complex-commercial litigation. He can be reached at tomwallerstein@coltwallerstein.com.
