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How To Pick Your Company’s Legal Representation

Insight June 10, 2011

The inclination when looking for a lawyer is always to start with big firms.  They are well-established in most cities, and connote a certain amount of prestige.  There is also still some truth in that big firms recruit the best and brightest from law schools, and thus produce better work product for you. 

There are however, many alternatives to a big firm when retaining legal representation, each with their own strengths and weaknesses: boutique firms, solo practitioners, and hiring a general counsel.  

The inclination when looking for a lawyer is always to start with big firms.  They are well-established in most cities, and connote a certain amount of prestige.  There is also still some truth in that big firms recruit the best and brightest from law schools, and thus produce better work product for you. 

There are however, many alternatives to a big firm when retaining legal representation, each with their own strengths and weaknesses: boutique firms, solo practitioners, and hiring a general counsel.   

Big Firms
Retaining a big firm certainly has its advantages.  Besides prestige, they may be more stable and better resourced.  And because of their stability and capital, big firms often opt to defer fees or take equity in companies as opposed to immediately charging for services.  Large firms may also have networks and connections that they can leverage to give their clients business advantages.  These can all be very attractive features for entrepreneurs, especially for smaller outfits or first-timers. 

The major drawback is cost.  The hierarchical structure of large law firms lends itself to huge overhead costs which are usually passed on to the client.  You may also experience poorer communication and overall service from your attorney because of the highly leveraged models of large law firms.  Although a partner may manage the firm’s relationship with you, a more junior associate will likely do the actual work. This delegation has the potential to filter your original instructions and generate inefficiency.

Boutique Firms
Boutique firms are smaller than big firms, and typically focus on a few areas of practice. They walk the line between big firms and solo practitioners in almost all aspects.  Their cost, level of availability and service, network, capital and resources will all be lower than big firms, yet higher than a solo practitioner’s. 

Boutique firms might best be characterized by the amount of expertise they hold in certain fields of practice.  It is common for both rainmakers and rising stars at big firms to leave and form their own boutique firms. Choose the right boutique, and your attorney will likely be someone who has excelled in your particular issue and can obtain the best outcome for you at a lower price.  You should expect, however, that strong boutique lawyers will have large clients bases among which they need to divide their time.

Solo Practitioners
Solo practitioners represent a stance close to a boutique firm.  Often, solos are also well-regarded in their particular field.  They have the expertise, and will usually have more time to properly serve their clients better than a big firm or boutique firm would.  They are usually the most cost effective as well: they have low overhead costs, so they aren’t passed on to the client. 

Of course, the downside is that solos lack resources, and may need to consult outside attorneys for advice on legal issues outside their area of expertise.  This may slow down the turnaround on the resolution of your legal issue, despite your lawyer’s availability to you.  A solo practitioner may also have a more limited network, which limits the opportunities for you to build your own connections through your lawyer. 

General Counsels
General counsels are hired by a company when it becomes more cost effective to pay a general counsel’s salary instead of constantly referring work to outside counsel.  In that regard, they are always most cost effective than the other options here, and of course are always more available because they work directly for you.  They tend also to be experienced lawyers, as companies don’t typically hire new lawyers.  They will, however, have only as much knowledge as a single lawyer can possess; outside counsel will still be required on complicated or large projects.The main question is determining at which point a company will save money with a general counsel, which has a different answer for every company.

Ultimately, while a lawyer’s reputation (which can be checked on Avvo, Yelp, Martindale-Hubbell, and general word of mouth) certainly should factor into your selection of a lawyer, a firm’s size shouldn’t.  A company just needs to make sure that its lawyer has the requisite experience and resources, and otherwise meets your company’s business need and limitation. Just remember, you are hiring a lawyer and not his firm.