Flexibility paying off for SOME firms
By Josiah J. Puder
Josiah J. Puder is vice president and general counsel of Melt, Inc., a public company headquartered in Southern California. He can be contacted at josiahpuder@meltgelato.com.
Amid the flurry of headlines shouting, “Thousands Laid Off,” “Bloody Thursday,” and “Firm Closes,” it’s easy to overlook those firms and young lawyers who are not only surviving this recession, but maintaining a steady practice and growing.
In fact, small and midsized law firms are experiencing some surge in business in 2009. These firms are capitalizing on their strengths, which include efficiency and lower-cost services as compared to their larger counterparts. Smaller associate classes this fall and the threat of more large law firm layoffs have allowed small and midsized firms to attract young attorneys from top law schools and law firms with a simple yet attractive proposition: a job.
Young lawyer Matt Butler, a principal of the small litigation firm of Nicholas and Butler LLP, in San Diego, believes that his firm is faring fine under this recession. “We haven’t really made cuts,” said Butler. “We have experienced slower growth than we otherwise would have, but we’re simply growing in a more conservative fashion.”
Still, many firms’ plans for rapid expansion and associate hiring sprees have halted as a result of the uncertainty. “We have to be smart about how we use dollars now,” said Eric Koester, an associate at Cooley Godward Kronish LLP in Seattle. Without formally being told to cut their travel and expenses, many lawyers have taken it upon themselves to reduce nonbillable expenses until the market regains some momentum. “I’m just trying to focus on what I can control — being responsive to clients and providing high-quality work product. Now isn’t the time to take our eyes off the ball,” said Koester.
Clearly, firms are being forced to make sacrifices and adapt to the current economic climate in order to weather this economic storm. Raj Gadhok, a young lawyer and partner at Kozyra & Hartz, LLC, in Roseland, New Jersey, echoed the recent widespread practice of not raising rates. “We are working with clients to help reduce their anxiety over bills,” said Gadhok.
Gadhok reports that his firm is sensitive to clients’ billing concerns and that he does his best to see both parties accomplish their goals without parting ways over unpaid or late bills. “The message is we care and will work with you,” Gadhok explained.
Firms that maintain flexibility in addressing clients’ financial needs have even been able to pick up new business. “We have some alternative fee arrangements that fit well with where our clients are right now. We’re not afraid to work on a project fee basis,” said Leslie Curran, a partner at Plave Koch in suburban Washington, D.C. Curran is a young lawyer whose boutique firm spun off a few years ago from two large firms.
For one young lawyer in northern New Jersey, the recession has been an opportunity to finally pursue his dream of hanging out his own shingle. As Dan Marchese’s former firm started to experience decreased business, he decided to start investigating office space rent. What Marchese found was that now just might be the best time to start a law practice with lower costs for labor, office space and equipment.
Overall, for firms that are not leveraged and are willing to be flexible, the times are not as bad as many legal blogs report. According to Seth Levy, a young lawyer and partner with Davis Wright Tremaine LLP in Los Angeles, “While clients are asking more about bills, rate reductions, and inquiring more into firm efficiencies, if your rate structure is competitive to begin with, you will be in decent shape.”
 
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