Over the past year or two, we’ve been working with what struck us as a high number of litigation boutiques, and we decided to pause and gather our thoughts for, we can always hope, the benefit of a wider audience.
Semantics first: By “litigation boutique,” if it’s not self-evident, we mean firms that really only do litigation. If they have non-litigators, they’re understood by all (including the non-litigators) to be in service to the locomotive of the litigation practice. Most commonly, although this isn’t part of the definitional essence, these firms have only one, or one primary, office. Often they were formed by alumni of Big Law and/or US Attorneys, and the first generation of founders are often in a +/- 5 year age range. Succession planning can be a looming or clear and present danger.
We said of late we’re working with a number of these firms, and one plausible hypothesis to explain that is that market frictions are expressing themselves through a number of these firms’ deciding to seek an outside perspective.
Then again, it could be pure random noise.
In any event, we’ve observed some common issues that often have the attention of these firms and we wanted to share what they are.
First is, by definition, lack of a diversified practice. This entails several typical ramifications, some desirable and some not so much. Pro:
- Focus, in the eyes of clients and internal legal and business professionals. There’s no question what the firm does and what its organizational form and internal processes should be designed to optimize.
- Few(er) fiefdoms. Absent internal borderlines between practice areas, people are less likely to foment local rivalries. (Local rivalries are always the most vituperative.) Related is that there’s no practice area imperialism going on; no “mine’s better than yours.”
- Clarity in recruitment and training. Lawyers join litigation boutiques because they want to be litigators; taking a deposition or preparing an expert will be core competencies while critiquing a material adverse change clause will not be.
- The potential for rather violent cyclical swings in workload. Not only does demand for “litigation” fluctuate through macroeconomic cycles, but many of these firms are relatively small and a disproportionate share of revenue in any given year may spring from one or a small handful of cases.
- Similarly, overconcentration, chronically or episodically, on a few key clients. This is the antithesis of every financial adviser’s starting point re your investment portfolio: Diversify! (Then there’s the contrarian view, apocryphally or otherwise ascribed to Warren Buffett, to “put all your eggs in one basket; and watch that basket like a hawk.”)
- Litigation clients–especially those with Big Bad Matters–are rarely repeat clients. At least the clients can hope they’re not. Litigation boutiques therefore need to keep the client/prospect pipeline evergreen.
- Finally, many litigation boutiques’ primary source of new business is referrals from Big Law for matters in which they’re conflicted out. This sounds fine on the surface (and it is), but the tightest connections tend to be with firms the founding partners are alumni of. As these relationships begin to “age out,” the pipeline needs to be refreshed and expanded.
Let’s delve a little more deeply into business development, which is (breaking news!) an obsession in Law Land in general, but it seems particularly acute in this niche.
Efforts to go to more breakfasts, lunches, cocktails, and dinners are widespread, but produce little by way of tangible results.
Networking at bar associations, industry events, and CLE’s? Same.
Speaking at [see above]. Same, plus you may be giving away valuable IP to the people in the audience, who tend to be your competitors.
Typically–we are dismayed to report–these efforts are entirely uncoordinated and within the purview of individual lawyers, thereby kneecapping any chance for a cohesive market-facing identity.
Yet some firms manage to escape these ruts, mostly by defining their super-niche in terms that few others can credibly lay claim to. This is, we believe, the most sustainable route to success in this niche. But very few firms achieve it.
Why is that?
It takes discipline to say “no.” Particularly when business development is viewed universally within the firm as a high priority, turning down a potential opportunity can seem deluded, bordering on anti-social. Yet the most successful firms in this niche do so consistently and rigorously. Nice idea, you may be saying, but some firms have that luxury and we don’t.
We submit that those firms that “have that luxury” today got where they are by sacrificing for their vision of the future when objective observers might say they were still in hardscrabble mode and needed to maximize current operating earnings at all costs..
But boutiques, in essentially all industries across the economy, are an evergreen and potentially vibrant participant on the landscape. And the door between boutiques and Big Law is not a one-way airlock; it’s a revolving door.
If you’ve just started out staking your claim in this area, are thinking about it, or are wondering if you should regret it–even if you have succeeded beyond your wildest dreams–life is not over. You still have options. Choose the interesting ones.