Boutiques are next up in our law firm taxonomy, and first a word about what I mean when I say “Boutiques,” because I may be using it a bit differently than you might assume in common parlance.
In my nomenclature for purposes of this taxonomy, boutiques are firms that do one and really only one thing exceptionally well. They may or may not be small.
This means two things: First, one could conceivably envision a 1,000-lawyer “boutique” (size isn’t a criterion), and second, “they do one and really only one thing exceptionally well.” The “really only one” condition means if you name one of these firms, there will be widespread agreement on what that one thing is—even if they have ancillary practices that may (or may not) exist to serve that primary calling card.
So what about boutiques?
For starters, they will always be with us. In industry after industry, boutiques have proven themselves a very durable model. Why? Most obviously, boutiques are an evergreen category: Someone or some group is always coming along founding another boutique. Even if the mortality rate is high (more about that anon), the fertility rate is at least as high. After all, the commitment required to launch a law firm is well within reach of thousands of people—hundreds of thousands if you count solo practices.
As we’ve often observed, law firms are not intrinsically capital intensive, so there goes one potential barrier to entry. Second, in this market in spades, talent is widely available. Vacant office space can always be found even in the tightest of markets, particularly given the tiny footprint boutiques typically launch with. And technology tools are ubiquitous, commoditized, and thanks to Moore’s Law faster-better-and-cheaper every year.
Finally, clients are always and everywhere the scarcest commodity, but show me the founder of a boutique who launched without one or more marquee clients and I’ll show you a subject for extended psychoanalysis (or an intensive boot camp in Accounting 101 under a CPA with a sadistic streak).
Hence the very high boutique fertility rate, which, importantly, is only enhanced in Law Land because lawyers are autonomy-seeking guided missiles always prepared to chafe at even the most unjustified feeling of being “managed.” Some are walking hair triggers prepared to light out for the territories.
So what are the pros and cons of these creatures?