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While a few Big Law firm brands continue to dominate the startup scene, some founders are turning to boutique firms for better rates and a smaller-firm atmosphere.

Kruze Consulting, which ranked top 5 U.S. startup law firms earlier this year, has conducted another study to identify the five top boutique law firms with the most startup clients.

The accounting firm analyzed over $40 million in professional services spending by its own U.S. startup clients, which number more than 180. They include companies in Seed to Series C funding stages.

Kruze found that the top two Silicon Valley firms, in terms of the number of startups they have served, are Atrium and Silicon Legal Strategy, tied for first.

In terms of spend, here's how the top boutiques made out, according to Kruze:

Rank Firm Average Startup Spend Description
1 Silicon Legal Strategy $47,000/yr Silicon Legal Strategy, which started in 2007 with one lawyer and a part-time paralegal, has grown to a team of 45, including five partners and 18 associates. The firm has offices in San Francisco, Los Angeles and Denver and provides advice to technology startups, entrepreneurs and seasoned investors.
1 Atrium $23,000/yr Atrium is a full-service corporate law firm founded by Twitch founder and Y Combinator partner, Justin Kan, along with former Orrick, Herrington & Sutcliffe corporate partner Augie Rakow. The Silicon Valley-backed startup law firm currently has 33 attorneys and staff.
2 SPZ Legal $18,000/yr SPZ Legal, based in the Bay Area, provides outside general counsel services to startups and small businesses on matters including incorporation, financing, employment law, intellectual property, and business contracts. The firm has three attorneys and one administrative staff member.
3 VLP Law Group $7,000/yr Founded in 2008, VLP is a business and transactional law firm that works with startup companies, financial institutions and investors. The virtual law firm currently has 48 attorneys, according to its website. 
4 Hopkins and Carley $6,000/yr Hopkins & Carley, established in 1968, offers clients a broad range of services including business litigation, corporate, creditors' rights, employment, family wealth and tax planning, intellectual property and real estate issues. The Silicon Valley firm has about 92 attorneys and other staff in its offices in Palo Alto, San Francisco and San Jose.
5 Fathom Law $68,000/yr Fathom Law, founded in 2013 in San Francisco, is a business and technology law firm that aims to offer flexible and alternative fees to clients, including entrepreneurs, growth companies and investors. It currently has six attorneys focusing on general corporate and securities matters, venture capital and private equity transactions, mergers and acquisitions, intellectual property matters and litigation. 

All of these firms are based in the Bay Area. To qualify as a “boutique,” each has fewer than 100 attorneys and is either completely focused on serving startup clients or has a strong tech practice, according to Kruze Consulting. The survey also excluded firms that are focused more on litigation, IP, immigration and real estate, as well as sole practitioners.

“The companies who use boutique firms tend to spend less money on their legal services, so they spend about maybe 60% of what they spend if they go with a big player,” said Healy Jones, vice president of marketing at Kruze Consulting.

The report found that boutique firms included in the survey bill about $33,000 per year for each startup, which is more than 40% lower than the $57,000 per year larger players earned, based on the agency's previous survey.

“The smart CEOs are always thinking about ways to save some money,” Jones added. Still, that's not the only consideration.

“I think the major reason why a startup founder chooses a law firm has a lot to do with the relationship with the partners they are going to work with. I wouldn't be surprised if it is the relationship that is the most important factor,” Jones said.

Jones explained that, while startup founders are attracted to boutique firms partially for the price, they tend to value more of the personal relationship with their legal counsel. But larger firms have more partners and therefore more potential relationships, so they still bring in a large number of clients.

The top two boutique firms, Silicon Legal Strategy and Atrium brought in an average of $47,000 per year and $23,000 per year, respectively. Andre Gharakhanian, a founding partner at Silicon Legal Strategy, said the time and effort his firm spends on managing the relationship with their startup clients has driven its success.

“Most of our clients are doing this for the first or second time. They don't have lawyers in-house,” Gharakhanian said. “We found that just as important, if not more important, than the technical legal guidance that we bring them, really is good, old-fashioned customer service.”

The survey also noted that legal spend can vary greatly among startups, depending on fundraising, litigation, complex employment law or IP protection. Some startups in the study spent over $100,000 in legal costs, while other companies when not fundraising, manage to spend almost nothing on legal costs in a given year. It found over half of the companies in the sample spent less than $40,000 a year.