Working with boutique law firms
Colt Wallerstein Partner Tom Wallerstein discusses the advantages of working with boutiques
February 29, 2012 at 07:00 PM
7 minute read
Q: Tell me about your firm.
A: My partner and I founded [the firm] in July 2009. We both had been with big law firms our entire careers. We were nine and 10 years out of law school at the time. The whole idea was to do the same kind of work, the same quality of work and to pitch to the same types of clients that we were working with when we were at the big law firms, but to offer them much lower billing rates, a better, more client-focused billing philosophy and more responsiveness. Our whole pitch was, “We're the same lawyers we were when we were at our big firms, except our rates are now approximately 50 percent of what they used to be.” We were billing around $700 an hour [at the big firms]; if we were still there, we'd probably be at about $800 an hour. Instead, we went from $700 an hour to $350 an hour. In the world that we came from, that's quite a deal.
We focus on the same kinds of cases [that we used to]. We only do litigation. Most of our clients are high-tech Silicon Valley companies. We have a lot of startups, but we also have some Fortune 500 clients. We do a lot of intellectual property litigation, complex commercial litigation, executive compensation disputes and employment litigation—cases where the amount at stake is significant but not enough to justify a big national law firm and their $100,000-a-month minimum.
Q: Why should companies prioritize working with boutique and regional law firms?
A: There has been a fundamental paradigm shift in the way legal services are provided that started in 2007 and 2008 as the economy started to tank, and then 2009 and 2010 as it continued to tank. Rather than trying to pare down the number of providers, companies are definitely expanding and looking for alternatives, mostly for cost. They want cheaper alternatives.
The environment that I came from—the big law firms I worked at—frequently had a philosophy of “we will win at any cost.” And they were quite effective at winning. But the whole idea that “we will win, and the cost doesn't matter” is not ringing true with companies anymore. They don't want to just win—they have a budget. They need to win within that budget.
Q: What advantages do boutique and regional firms have compared to large global firms?
A: A smaller regional firm, in some senses, may be more appreciative of the business of a new client. It might not be a huge $20 million dispute; it might be a smaller dispute. A huge megafirm doesn't want that small case. They really can't afford to litigate it effectively; they've got bigger fish to fry. A small firm like us is very appreciative of any kind of business. We will really bend over backwards to be responsive and do a good job so that we can get the next case, the bigger case.
A smaller firm like mine that has less overhead can afford to work on a smaller matter that a big firm cannot afford to work on. From the business side, that lets [companies] test-drive us on a smaller matter. A company like, say, Google or Yahoo!, can hire us to handle an employment dispute for them where there may not be tons of money at stake. They can see how we do, get to know us and how we work, and then maybe be more comfortable with hiring us for the bigger case down the road. With a bigger firm, you don't have the opportunity to test-drive the lawyers like that because they only want the big $10 million case. You're really just kind of buying the brand name.
Q: Tell me about your firm.
A: My partner and I founded [the firm] in July 2009. We both had been with big law firms our entire careers. We were nine and 10 years out of law school at the time. The whole idea was to do the same kind of work, the same quality of work and to pitch to the same types of clients that we were working with when we were at the big law firms, but to offer them much lower billing rates, a better, more client-focused billing philosophy and more responsiveness. Our whole pitch was, “We're the same lawyers we were when we were at our big firms, except our rates are now approximately 50 percent of what they used to be.” We were billing around $700 an hour [at the big firms]; if we were still there, we'd probably be at about $800 an hour. Instead, we went from $700 an hour to $350 an hour. In the world that we came from, that's quite a deal.
We focus on the same kinds of cases [that we used to]. We only do litigation. Most of our clients are high-tech Silicon Valley companies. We have a lot of startups, but we also have some Fortune 500 clients. We do a lot of intellectual property litigation, complex commercial litigation, executive compensation disputes and employment litigation—cases where the amount at stake is significant but not enough to justify a big national law firm and their $100,000-a-month minimum.
Q: Why should companies prioritize working with boutique and regional law firms?
A: There has been a fundamental paradigm shift in the way legal services are provided that started in 2007 and 2008 as the economy started to tank, and then 2009 and 2010 as it continued to tank. Rather than trying to pare down the number of providers, companies are definitely expanding and looking for alternatives, mostly for cost. They want cheaper alternatives.
The environment that I came from—the big law firms I worked at—frequently had a philosophy of “we will win at any cost.” And they were quite effective at winning. But the whole idea that “we will win, and the cost doesn't matter” is not ringing true with companies anymore. They don't want to just win—they have a budget. They need to win within that budget.
Q: What advantages do boutique and regional firms have compared to large global firms?
A: A smaller regional firm, in some senses, may be more appreciative of the business of a new client. It might not be a huge $20 million dispute; it might be a smaller dispute. A huge megafirm doesn't want that small case. They really can't afford to litigate it effectively; they've got bigger fish to fry. A small firm like us is very appreciative of any kind of business. We will really bend over backwards to be responsive and do a good job so that we can get the next case, the bigger case.
A smaller firm like mine that has less overhead can afford to work on a smaller matter that a big firm cannot afford to work on. From the business side, that lets [companies] test-drive us on a smaller matter. A company like, say,
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