Biglaw

Are Smaller Market Lawyers Actually Better Than Major Market Biglaw Lawyers?

A new study suggests clients have discovered the value of a smaller market lawyer.

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The most consistent complaint about Above the Law’s coverage of associate salary increases is our perceived explicit bias against firms fully matching the top-of-market scale in every city across the country. It’s not uncommon to receive two or three irate emails every week calling us out for “disrespecting” the hard-working associates of… some random American city… who are just as smart and capable as any Cravath recruit, all because we’ll say that we don’t really think firms should be paying first-years $190K to live in Charlotte.

And the rub of it is, we’re still right about this. It has nothing to do with the number of hours lawyers put in across the country or even the level of skill out there. Major market attorneys should be paid more because recruiting attorneys to work in these markets has to respect the cost of living issue. Full stop. New York has more open jobs to staff with talented attorneys than Minneapolis and getting lawyers to come to New York and stay here requires more cash.

It’s not disrespect, it’s economics. We still want you to get your due for the work you put in and we consistently note that law school debt respects no geographic boundaries. We just don’t think it’s fair that people toiling away in Midtown to spend 80 percent of their income between debt and rent for the cause of pay parity across markets.

So while this may not salve anyone still angry over our coverage, those mid-market lawyers should be excited to hear about a new study suggesting that attorneys in smaller cities are not only on par with their major market peers but actually providing superior legal services.

In an article appearing at American Lawyer, AdvanceLaw CEO Michael Williams and managing director Aaron Kotok outline the results of their study of the 40 major metropolitan areas with the most attorneys — 36 domestic, 4 international — and find that clients are more ever so slightly more willing to recommend lawyers in smaller markets than larger ones, citing no real difference in the quality of service, but a major difference in cost and efficiency:

For all the talk about prestige locations and how mega cities attract all the best talent, there is no real performance difference. In fact, as the slight downward slope of the best-fit line shows, the largest cities in the data set have marginally lower performance scores than other locations, though this is not statistically significant. (And again, the result is largely the same across various client-service metrics.)

Great news for smaller market lawyers. One has to imagine this trend toward service parity is in no small part due to upward pressure on salaries throughout the country, prompting more and more elite law school graduates every year to say, “wait a minute, perhaps I don’t have to live in a studio with 3 roommates?” But there’s more than a recruiting coup or two at play here. Technological advancements have given firms the opportunity to keep pace with their more staid competitors and the explosion of startups in smaller markets has created more demand — and therefore more opportunities to garner experience — for local players. Add in the fact that national megafirms are increasingly bringing name-brand practices to smaller markets and the reasons why clients are increasingly happy with their smaller town lawyers become pretty clear.

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And, before you ask, the authors did check the substance of the work involved and these smaller market teams were receiving “significant high-stakes work.”

That said, the authors do note some important caveats. The highest in finance work flows to New York because that’s where centuries of combined expertise choose to practice. The same can be said of government work heading to Washington:

Note that we are not saying there isn’t an incredible amount of elite legal talent in the largest cities that should be tapped—there is. Likewise, we are not saying that clients can or should send all their work to the so-called “mid-to-large” cities—there are obvious limits to this. But we are saying GCs and their teams should resist defaulting to the usual locations out of habit or history. The data suggests there is a major opportunity here, under current market conditions, to get great talent at lower cost, working extra efficiently.

The crux of all this is that clients need to embrace labor arbitrage. If your company has a matter that can be handled out of Portland, go ahead and handle it out of Portland. The old adage is that no one is going to fire you for hiring Cravath, but that sort of “management from fear” is what rightly gets NFL coaches fired for kicking field goals from the one. Get sophisticated in your vetting and start taking advantage of the quality lawyers in small markets.

Until they give all their associates New York scale and evaporate all their cost edge that is.

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HeadshotJoe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.

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