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Mid-tier renaissance as clients seek value
The legal marketplace is experiencing some radical changes as big firms and their big corporate clients go on the hunt for better value. _x000D_
Olivia Collings
THE legal marketplace is experiencing some radical changes as big firms and their big corporate clients go on the hunt for better value.
Many midsize firm leaders and legal experts expect the shift in the market place to lead to permanent changes, as midsize and smaller firms gain more footing in markets previously cornered by multinationals, reports The Legal Intelligencer. Managing director of Coburn Consulting in Boston, Jeff Coburn, said right now is a "renaissance" for midsize firms, however, while some will prosper in the market others will fail, resulting in the loss of weaker practices. In Australia, there is no longer an "automatic, gut, reaction of 'let's go to a top-tier firm for everything'", Beaton Consulting principal Joel Barolsky said. The global downturn is forcing local clients to assess how they can manage their legal costs. As they do, the service provided by top- and mid-tier firms will be harshly scrutinised, said Barolsky. In this process, top tier is not an automatic go-to for all cases. According to many legal commentators, even some of the largest corporations are stepping out of their big firm comfort zones and taking significant matters to smaller regional firms. "I think with in-house counsel being required to cut costs, some of them realise that there are some very high quality regional firms that can save them significant hourly dollars," said Maury Reiter of Kaplin Stewart Meloff Reiter & Stein. "As opposed to being patronised at times [by large corporations], we're actually being looked at as a real potential competitor for the business they're handing out." A number of medium size firms have seen an increase in work coming to them from big firms. "We are certainly getting a lot more looks for big ticket litigation than we did before and I don't know if that's just [a product of] being in Pittsburgh and things are happening, but we're certainly seeing that," said Kevin McKeegan of Meyer Unkovic & Scott in Pittsburgh. While the economic downturn is reeking havoc on large firms, it has also led to an increased number of clients looking for value in the market, and hence a move to smaller, leaner firms. Louis Rizzo, managing partner of Reger Rizzo & Darnall in Philadelphia, said many clients are either unwilling or unable to keep up with upward pressure on rates at big law firms. "Larger firms are going to be redefined in what they can and cannot do and what's affordable," he said, adding that the current industry climate offers a "great opportunity for the so-called midsized firm to define itself for the long run, not just because it's an economic recession." While big corporations with big dollar work are looking in the direction of midsize firms, the challenge for those firms, is figuring out how to be seen. What midsize firms need to do, is master one or a handful of practice areas and make that your claim to fame. A good boutique can offer the same depth and expertise a big firm can, in a given area, but can do it at much lower rates and often with much better service, Coburn from Coburn Consulting adds. However, he also admitted that the notion of midsize firms paring down their practices to only a few specialties "flies in the face" of the one-stop service that big firms offer and that many in-house counsel seem to prefer.
