Is it Possible to Compete Against Biglaw from Outside?

Graduate School Law School
1

<p>Hear me out guys! ...</p>

<p>So, in the other thread on CC called ** "Truth Behind Horror Stories in Biglaw...," ** I made the comment that I felt biglaw was "inefficient" in the way it worked its employees and that a better way to get people to be productive and perform well would be to do x, y, z... I won't get into that too much here, but it's in the thread. </p>

<p>If we accept the proposition that biglaw has "problems," it seems that changing biglaw from within would seem difficult. </p>

<p>a.) If you are an associate, then there is little you can do probably (you wield little to no power).
b.) Even if you're a partner, biglaw has hundreds of them and it's not possible for one partner to control all of the firm culture. No one person probably has that much clout.</p>

<p>I play a lot of chess and LOVE games that involve strategy. And I kind of like certain aspects of business too. I like finding weaknesses in opponents and taking advantage of them (in games!!! lol...) ... If I'm a rich businessman (or even if I wasn't let's say), would it be possible to build my own firm to compete directly against biglaw? </p>

<p>Could I create my own firm and a new model of doing biglaw without the 80-100 weeks and an entirely different system of rewards and mobility? </p>

<p>Are the boutique firms with biglaw-like clients essentially doing that? Or do they still operate under 2500 billable hours and the like? </p>

<p>Is the barrier to entry/start-up costs too great for someone to create their own firm to do this?</p>

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<p>Lawyers make money working for clients. The more work for clients they do, the more money they make. More work means more hours working. You could easily create a firm that had low billable hour requirements. You just wouldn’t make as much money.</p>

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<p>Working more hours may give greater billable hours, but what if my workers worked less hours, got more sleep, and did more work (due to speed)? Then, we could tackle a new assignment, while the biglaw team may still be working on an old assignment. </p>

<p>? possible ?</p>

<p>I would also focus hard on bringing in great people with marketing savy, passion, and drive and have my team be represented by great, sociable marketers and “sellers,” who looked out for the best interests of the clients while also maintaining high-quality of work that would be valued highly (so as to be mutually beneficial and lucrative for my firm as well). I’d want both sides to gain.</p>

<p>I know a big key to success is being able to bring in business and I’d want a very smart and sociable group of partners/representatives working for us in that department. But more than anything, I’d want my firm to believe in this “new model of biglaw” and to strive for excellence while upholding, maintaining, and balancing other positive lifestyle values and goals (e.g. family time, sleep/relaxation, and the like). </p>

<p>I just wonder if it can be done financially from someone outside of biglaw without millions of dollars. </p>

<p>I’m just daydreaming and playing around with this idea. :D</p>

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<p>You’re dealing with two countervailing forces here, BUG.</p>

<p>First is that people do tend to get less efficient over time.</p>

<p>Second, though, is that people are more efficient as they gain specialized knowledge – and some of that knowledge is extremely deal-specific, such that it would be impossible to “hand off” a project to another associate and receive equal quality work. There are some deals or some cases that are so incredibly complicated that you just CAN’T explain it to somebody else without wasting a ton of everybody’s time; it’s much faster when one person, who knows everything about a single small topic, can knock out the project.</p>

<p>This is why, for example, investment banks work on a similar hours model to biglaw. They can’t replace one guy who works 100 hours a week with two guys who work 50, because those guys would probably have to spend 30% of their time just explaining the deal to each other. (“While you were gone, I realized that we were thinking about this ALL wrong!”)</p>

<p>Similarly, the “handoff” process is the stage where most errors happen in hospital systems now, and it’s why we’ve cut resident work hours significantly without seeing any improvement in physician errors. (Of note, the problem has not gotten worse, either. I’d call that a win.)</p>

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<p>i worked at a boutique firm – it was very intense to put it bluntly. in some ways it was worse than my biglaw experience. smaller firm, fewer partners, each partner much more invested in everything. anything affecting the bottom line affected each partner directly. they had extremely high expectations of their associates – in terms of hours, in terms of depth of understanding of the firm’s area of law.</p>

<p>you talk about work inefficiencies from expecting people to put in such hours. but in general, realize the partners – be it at a large firm or a boutique firm – got to be where they are because they were willing AND ABLE to thrive under similar pressure. </p>

<p>at the boutique firm i worked at there was one partner who literally could function well on about 4-5 hours of sleep regularly. even his fellow partners sometimes complained that he had unrealistic expectations of others – didn’t change anything though. </p>

<p>one partner once commented to me that one of the problems with trying to make money as a lawyer was that you were selling hours. you weren’t creating something that had its own intrinsic value. all you could do to increase value was to work more hours. a partner is selling his hours and his associates’ hours. an associate isn’t inventing a great new marketable product that will keep bringing in earnings for the partner even after the associate has finished the product. the associate has to keep working those hours every week to keep bringing in revenue.</p>

<p>another partner once also told me the story of how earlier in the firm’s history, the expertise of the founding partner was so great, clients would be willing to pay huge retainers - even under that model, he described how many hours they worked because they were driven to give the best product without having to worrying about justifying to the clients how many hours they worked. (there are different types of retainers – pay $X up front and law firm handles certain specified work for you, pay $Y up front which covers A number of hours or B types of work and a specified hourly rate thereafter which is often less than the firm’s usual hourly rate.) even with the retainer model, where the firm wasn’t being paid by the hour, the concept of doing the best possible job still drove the hours – because after all, it was the quality of the work that allowed the firm to get the large retainer. </p>

<p>when a law firm pays an associate, the amount they collect for that associate’s work should ideally cover the cost of having that associate (salary, benefits, malpractice insurance), plus a portion of the overhead (rent, utilities, support staff, equipment, maintenance), plus a return of earnings for the partners. you cut the number of hours you expect an associate to bill, you have to pay him/her less, possibly forgo updating some equipment, expect to clear less earnings for the partner. in your proposed alternative firm structure – how much money do you expect your associates to earn for the firm? what will you pay them? what type of associates will you be able to attract for what you are will to pay them? how many support staff will you employ?</p>

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<p>"I would also focus hard on bringing in great people with marketing savy, passion, and drive and have my team be represented by great, sociable marketers and “sellers,” who looked out for the best interests of the clients while also maintaining high-quality of work</p>

<p>how are you going to pay these people? how will you bill the clients so that you can afford them?</p>

<p>you want people “with drive” who will say at 7pm - i better go home now so i can do a better job at 10am tomorrow than i will be able to do at 10pm tonight? you want clients who will patiently wait the additional days it will therefore take to get their answers? you want people “with drive” who will be happy about splitting up the responsibility on the work so that they can each work fewer more efficient hours? if you want the worker bees each doing less so that they can be more efficient, are you as partner willing to work more to make sure it all fits together within the time frame required by the client?</p>

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<p>I’m also going to point out that ‘less work on the average throughout the year’ does not necessarily mean ‘no all nighters’ or the like. A surge in work, or a bunch of deadlines that happen to be close together, will still mean all-nighters or 80-hour workweeks. You may have fewer of those, but they will still be present.</p>

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<p>You are assuming that there would be a next project to move on to. That is not always the case. For example, a matter could go to trial or arbitration and bill six figures a month for a year, and a million dollars in trial or arbitration month. Once trial is over, in the period of waiting for a decision, there may be very limited billing, almost to zero, and no guarantee of anything to bill in its place. You can never be sure of the next matter or task. I’ve told you this before. Lawyers want to bill more hours, not less, because if there isn’t billing, no one gets paid. Only in task based billing situations, or where efficiency bonuses are added into retainer agreements at the front end and usually involve some guaranteed figure would cutting hours be desirable. Think of these lawyers as hourly employees and you will have a better sense. Also, annual associate bonuses are based on hours billed. More hours equal more bonus.</p>

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<p>Thanks for the comments so far! I have many thoughts, but they’ll have to wait for now. :slight_smile: </p>

<p>My biglaw-like professor in one of my classes has assigned us a massive problem-set that I’m doing all weekend! YAY!!! …actually it’s kind of fun to me, but just a long p-set and keeping me super busy …wish I had more time to chat here! </p>

<p>I’ll get backt o you guys later maybe next week! Thanks for now.</p>

<p>See ya!</p>

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<p>one more thought to throw out – </p>

<p>when i worked at the biglaw firm i was at the beginning of my career - i was usually working under a partner and a more senior associate both of whom had the primary responsibility on the case. hours were bad – late nights reviewing documents, weekends plans cancelled on short notice, etc. but for the most part, when i went home, i felt i was away from work. i rarely spent much time outside of the office thinking about what had to get done next.</p>

<p>when i worked at the boutique firm, where i was given the promised greater responsibility, the hours were still very intense (late nights, weekend plans cancelled on short notice, etc.), but in addition, i much more frequently found the weight of the work weighing on me during my “off” hours. and i know that was true of others in the firm (can’t speak to how attorneys at other firms are or were, i just know that this is what the intensity of my firm resulted in). its one of the things i hated about the practice of law. leaving at 6pm in the hopes of being sharper the next morning wouldn’t have helped much if i spent those extra “off” hours worrying about what i had to do the next morning and wishing i had just gotten it done already - especially when i didn’t always know what else additional work might pop up the next morning.</p>