Smaller Can Be Smarter

by Jon Lewis, Managing Director, Michael Lord & Company

As a 1985 law school graduate with over 25 years of combined experience as a legal recruiter/practicing lawyer, I am often surprised by the extent to which attorneys (associates and even partners) buy into the over-generalization that "law firms are all alike." Certainly it is the case that the similarities between competing Vault 100 firms typically far outweigh the differences; however, that truth should not obscure the significant differences between most large firms and most mid-sized/small firms. There can be important benefits to be gained by moving down in size, for both associates and partners, including the following:

ASSOCIATES

1. Potential Lifestyle Advantages: One thing I frequently hear from big-law associates is that they would rather stay where they are than move to a smaller firm where they would end up working just as hard for less money. While this can happen if the wrong smaller firm is selected, don’t be too quick to drink this particular flavor of large-firm Kool-Aid—Some small and mid-sized firms do offer significant lifestyle advantages as compared to their larger brethren. For example, over the years I have placed four candidates coming out of top 50 firms into a firm of about 25 attorneys where associates can be quite successful working at a 1750-billable-hour pace. Try finding that at a big firm.
2. Better Experience: At one point during my career as an IP attorney I had the good fortune to work at a firm which consisted of six partners and one associate (me!) I can honestly say that I learned more in less than two years at that firm than I did in my other 12+ years of legal practice combined. Particularly for more junior associates, the opportunities for assuming substantive responsibility and interacting with clients are vastly greater at smaller firms than larger ones. Yes, bigger firms more often have formal training programs, but are those programs really as valuable as actual hands-on experience?
3. Long-term Prospects: Even those cynics who doubt the other potential advantages of smaller firms tend to recognize that those firms typically offer associates somewhat better partnership prospects. What is less often recognized is that even for those who don’t make partner, smaller firms can offer greater long-term career possibilities. Since advancement structures are often less formal and there is less concern about precedent, smaller firms can be more flexible with respect to creating permanent non-partner positions for valued associates who for whatever reason are not going to be made partners. Simply put, "up or out" is less often a career limiting fact of life once you get yourself "up and out" of big law firm life.

PARTNERS

1. Lower Billing Rates: Smaller firms typically charge clients lower rates than larger firms, sometimes much lower. From the standpoint of a junior (or even not-so-junior) partner trying to build up his or her own practice, such lower rates can be a powerful marketing tool in the never-ending search for new business, and can also make it easier to keep those elusive clients once they are on board.
2. Lower Business Generation Requirements: At most large firms, the business model focuses on maintaining outsized profits-per-partner, who earn large annual compensation. During the current down market, many partners have been confronted with the downside of this model—the need to generate seven figure books of business on a consistent basis. Sure, that $400,000 salary/bonus for a large firm service partner with little business of his or her own seems like a great deal during busy periods when work flow is robust; however, that same compensation package can quickly turn into a career-threatening albatross in leaner times. Smaller firms often pay partners less, but with the corresponding benefit that the book of business required for success may be significantly smaller. For those partners who can comfortably generate annual revenues of say $500,000-$750,000, smaller firms may be a far better (if not the only) long-term fit.
3. Greater Say in Firm Management: For partners interested in having a real say in the way things are run, large firms can be a major source of frustration (unless they are fortunate enough to have a $5,000,000 book of business). While it is a cliché, smaller firms often really can be more collegial and democratic, especially for those partners whose rain-making capability tends more towards showers than downpours.
   
   

Jon Lewis is a Managing Director with Michael Lord & Company. Jon graduated from Yale Law School and Wesleyan University and is formerly a trademark counsel at Joseph E. Seagram & Company and an associate at the predecessor firm to the New York City office of Dorsey & Whitney. His direct dial is 646.431.3431, and his email address is jon@mlordco.com.

 

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