Facing a fiercely competitive legal market crowded with global BigLaw conglomerates, midsize law firms have to get creative to stand out, and some have done just that in 2015, launching nonlegal business lines, adding attorney teams and building innovative project management software to boost growth.
For some midsize firms — defined here as firms in the bottom three-quarters of the Law360 400, with between 100 and 450 attorneys — a focus on client needs has started to mean serving clients outside the legal context. These offerings include advisory groups that help connect legal clients with investment capital, and governmental affairs bureaus that focus on political lobbying, according to Jill Huse, a partner at consulting firm Society 54 LLC.
McCarter & English
With just over 400 attorneys, McCarter & English LLP announced in June the launch of a government affairs affiliate separate from the firm’s legal work. McCarter put a two-person team — a Republican and a Democrat — in charge of the operation.
Rather than sticking only to the straightforward lobbying efforts done by many law firms, McCarter’s team runs political events and handles some communications efforts as part of a heavy investment in lobbying and advocacy helmed by Thomas S. Ross and Brian M.P. McGlinchey, Huse said.
“Theirs is interesting because they took a different route—since they are not lawyers, they are doing a lot of nontraditional work … which is very unexpected for a law firm,” Huse said.
Diversifying away from a central business is something accounting firms were trying 15 years ago, Huse said, though that came to a halt after Arthur Andersen was indicted for its involvement in the Enron scandal in the early 2000s, scattering the pieces of the Big Five audit firm’s business to the winds.
Nonlaw offerings are attractive to firms in part because they can bill at similar pricing structures without having to cover the same overhead costs, including hiring workers with a pricey law school education, Huse said.
A renewed focus on the business of the firm has become a marker of the most successful law firms, Peter Johnson, founder of Law Practice Consultants LLC, told Law360.
“The firms that seem to be moving in the right direction are the ones where all lawyers are focused on what it takes for the firm to have profitability,” Johnson said. “Treating the firm as a business operation as well as a profession and having strong leadership that does that is key.”