Torn Between 2 Lovers: Big Law Prestige vs. Microfirm Savings

Jackie Hutter has a great post up over at IP Asset Maximizer entitled “Chief IP Counsel: Stop Discussing How Your Lawyers Bill You and Focus on the Model They Use to Provide Your Legal Services.”  Tell us what you really think, Jackie!

In the post, Hutter makes an important point: clients are way too focused on begging law firms to cut their bills, without thinking about the model used by the firm to do the work.  If a firm is traditional, with receptionists, secretaries, docketing clerks, and expensive real estate, then the bill can only drop so far (use our law firm matter engagement letter agreement to try, though!).  But Jackie introduces us to the newer concept of the microfirm, where an attorney with Big Law experience works from home with no employees and is able to charge 50% less in some cases:

“Some might wonder how a micro-firm lawyer differs from a lawyer practicing in a . . . firm . . . setting. Well, the answer depends on whether or not the small firm or solo adheres to the traditional law firm model. If she . . . maintains the accepted staffing paradigm (e.g., receptionist, secretary, docket clerk etc.), this lawyer is still working within the law firm paradigm and cannot truly be considered a micro-firm lawyer. But if the lawyer handles her own administrative matters or outsources them to independent contractors on an as-needed basis, she fits the profile of the emerging micro-firm legal service model.”

A great example of a microfirm is entertainment law guru Thomas Crowell (picture at left).  Thomas used to work in the New York Big Law world, but now runs an extremely efficient firm himself, bringing in like-minded colleagues for larger matters and charging his clients reasonable rates with excellent service.

Despite how attractive this approach may be, at many of the biggest clients microfirms have trouble getting in the door.  From my perspective, the conundrum here is that the most lucrative, big kahuna company clients are uncomfortable hiring a microfirm because they lack the Park Avenue address and name recognition accoutrements.  So they’re trapped between two competing desires, Big Law prestige and microfirm savings.

Additionally, clients on the legal cost warpath miss a huge opportunity to cut their bills even further, because they rarely think about their internal model used to interact with outside counsel.   As we pointed out recently, clients seem to want outside counsel to cut fees, but to not make any changes to their own behavior that drives fees up. Every IP attorney that has worked on invention disclosures knows just how painful it can be and how many meetings it can take to tease out the necessary information. And clients love creating last minute fire drills at the time of docket deadlines, too.  This behavior increases the bill, and needs to change if the goal is to lower cost.

So which lover will you pick, Big Law clients?  Big Law, or the microfirm?  To prestige, or not to prestige!

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