Biglaw

Biglaw Firms Stink At Serving Smaller Clients

The high rates charged by larger law firms can prevent them from sufficiently serving smaller clients.

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‘Your firm is too big for me.’

Biglaw firms are great at handling bigger cases and transactional matters.  Indeed, Biglaw firms can devote many attorneys to a particular case, and can deploy other resources to assist corporate clients successfully manage complicated matters.  The services Biglaw firms provide do not come cheap, and this is why Biglaw firms typically serve massive companies and individuals with deep pockets.

Sometimes, however, Biglaw firms decide to work for smaller clients.  In certain instances, Biglaw firms take on smaller clients as a favor to their existing clients, and other times, this is because low-performing partners want to earn origination points.  In any case, from my own experience, Biglaw firms usually have a number of issues handling smaller matters.

One of the main reasons why Biglaw firms are inefficient when serving smaller clients is because of the insane hourly rates charged by many large law firms.  Sometimes, Biglaw firms give smaller clients a break, and charge smaller clients lower fees than usual.  However, the fees typically charged by large law firms still greatly exceed the hourly rates of smaller firms.  While large corporate clients might not bat an eye at a huge legal bill, smaller clients are much more likely to protest the fees charged by a Biglaw firm.

In order to charge less money to smaller clients, many partners at Biglaw firms typically task more junior attorneys with working on smaller matters.  More junior lawyers usually have a lower billable-hour rate, although this amount is still typically much higher than the rate charged by even seasoned partners at smaller firms.  In any case, junior attorneys in Biglaw can do more work at a lower cost to the client than a more senior attorney.  In addition, partners may think that working on smaller matters can be a great experience for associates, and as I mentioned last week, it can of course be a good idea to let associates handle matters.

However, sometimes Biglaw partners can greatly restrict the number of hours an associate has to work on smaller matters, since smaller clients cannot afford to pay larger bills.  When I was working in Biglaw, I felt extremely rushed when only given a few hours to conduct some research projects for smaller clients.  I definitely did not do my best work due to these time limitations, and time restrictions were almost never set for our larger clients.

Some partners would even force me to use a non-billable number for some of the time I worked on smaller matters.  In other instances, I could not record this time at all, since some Biglaw firms penalize partners if they have to write off time worked by a more junior attorney.  Associates hated this practice, since we were all trying to meet billable-hour requirements, and writing off time could impede associates from hitting billable-hour goals.  Due to these billing practices, smaller clients sometimes only received the attention of junior attorneys who did not have sufficient time to adequately work on a particular matter.

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When I was in Biglaw, there was a time when a fellow junior associate was tasked with working on a smaller matter for a friend of a partner.  Since the partner was trying to keep costs down, the partner was hardly involved in the case, and the junior attorney had a limited amount of time to work on the matter.  My colleague did not know that you had to attach certain exhibits to a motion, and the partner never bothered to check the papers before they were filed, since the partner was more concerned with larger matters.  This resulted in a huge mess-up that had to be corrected by devoting a substantial amount of time that couldn’t be billed to the client.  Of course, this situation would have likely not occurred with a larger client, since the partner would be more involved in the matter, and the associate would have had additional time to get things right the first time.

It can also be more difficult for a Biglaw firm to provide concierge service to smaller clients.  Many Biglaw practice groups only have several huge clients for which they work.  Indeed, when I worked in Biglaw, we only had three or four clients that accounted for nearly all of the work billed by myself and my colleagues.  As a result, we used specialized reporting formats at the request of these large clients, and we used billing narratives, billing guidelines, and even some abbreviations that were tailored to the clients’ needs.

Whenever we did work for a few smaller clients, we usually just conducted ourselves as we did when we were working for larger clients.  We usually did not make changes to how we operated for smaller clients, and I remember one occasion when a smaller client was upset at not being informed about a certain development in a case.  We would never inform our larger clients of this development, and the inertia of working for large clients can sometimes limit the services Biglaw firms can provide to smaller clients.

All told, Biglaw firms are great at serving larger clients and working on bigger matters.  However, Biglaw firms can really stink at handling smaller clients and cases.  The high rates charged by larger law firms can prevent them from sufficiently serving smaller clients, since this limits the amount of time and attention Biglaw attorneys have to work on smaller matters.

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Jordan Rothman is the founder of Student Debt Diaries, a personal finance website discussing how he paid off all $197,890.20 of his college and law school student loans over 46 months of his late 20s. You can reach him at Jordan@studentdebtdiaries.com.

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