Over 20 years ago, the flavour of the month in the legal press was that medium sized firms were doomed. The big firms were coming after our clients and we were going to lose them all. We had to merge with bigger firms or die. And yet, medium sized firms continue to flourish.
I practiced with a firm that grew from 14 to 40 lawyers while I was there. We had very little in common with Bay Street firms.
Among my client base were some clients who the large firms would have been delighted to have. The large firms certainly had the marketing budget and resources to go after them. So, how did this suburban lawyer attract and hold onto them?
Our lower fees were a factor, but they were certainly not the main reason that clients chose to deal with us. Value was.
So here is how I pitched it. (Now, to be clear, I believed absolutely every word of my pitch, but that does not mean that I was completely right or that a competitor could not have constructed a good counterargument.)
- You, Mr. Client, do not want to be small fish in a big pond. In a downtown firm, you will be lured in by the very impressive senior partner. You will then be introduced to a fairly impressive junior partner who will delegate your work to a sort of average but over-worked, over-stressed senior associate who will be swamped on bigger deals for bigger clients and sub-delegate the work to an over-worked, over-stressed, junior associate who is struggling to bill 1800 – 2000 hours and has no time for you.
At my firm, you will deal with me and an associate. You will be a big fish in a small pond. You can always call me. I may involve an associate or refer you to one of my partners, but it will be with your permission and I will supervise and take responsibility until such time as you have developed a relationship with them and no longer see the need for my involvement. Even then, you can always call me if you have any concerns.
By the way, I don’t work 1800 billable hours. I need to have time to go to lunch with you a few times a year and get to know you and your business.
- In addition to being over-worked and over-stressed, those big-firm lawyers will also be over-specialized. It will take six of them to discuss a transaction, because no one has a sufficiently general background except perhaps for the very senior lawyers who are not interested in your account because you are too small for them. The costs will sky-rocket and no one will be capable of understanding the entire picture.
I, on the other hand, have fairly general experience. When you come into speak to me about a transaction or a problem, you will meet with me and maybe my associate. I will be able to understand the whole picture. I can identify the employment issue (and call in my employment partner if necessary), the trusts issue (and call in my Wills, Estates and Trusts partner if we need her), the commercial leasing issue (and call in my Leasing partner if appropriate), etc. But most likely I can handle the entire meeting without a room full of other people billing you.
Although I know that cost is not your primary concern, I should point out that that the over-worked, over-stressed junior associate to whom your work is going to be delegated at a large firm will have less than five years of experience and will be billing you at close to the same rates that I will be billing you with 35 years of experience, and that assumes that he or she can find the time to do your work.
I would like to make an obscene amount of money from you, but I want to do that over a very long period of time. If I am not careful to build a relationship with you and bill you fairly at every step along the way, I will not have that opportunity. There may be some people downtown who would treat you that way, but good luck finding them and getting them to pay attention to a small fish like you. And the mid-level and junior people with the huge billable hour targets are just not going to ‘get it.’
You do not have to pay downtown rates for all of your general corporate and commercial work to get the specialized expertise that you need that our firm cannot offer. I will be the first person to recommend hiring a lawyer at a downtown firm or a boutique firm to provide whatever specialized advice that we do not offer. You will never see me trying to provide services in an area that we are not capable of handling.
Also, let’s talk about your litigation work. If you have any “bet the company” litigation and you would feel more comfortable hiring a Bay Street firm to handle that, by all means do that. But what about all of that everyday stuff? Why would you pay a junior person at a Bay Street firm to handle those files at their exorbitant rates when you can use a senior partner at my firm for less who will use her much greater experience to find a way to resolve the matter as cheaply as possible?
Bay Street firms have their place. Public companies should use them. Clients who want to buy General Motors should hire them. And of course there are many very specialized areas of law for which a Bay Street firm might be the best match.
But the general needs of entrepreneurial clients, even large ones, may be better served at smaller firms.
At least that is the way that I pitched it, with a fair degree of success.
Murray speaks about the legal profession from the safety of retirement, offers private courses in business law and mentors young lawyers. Learn more about him at his website.