By Alisa Levitt (Riverside Lawyer, September 2013 issue)
Gone are the days where a new lawyer can predict a career trajectory that includes becoming a summer associate, then an associate, and then making partner at the firm. Many law firms have creatively adapted to stay ahead of economic challenges, client realities, and attorney needs, while others have struggled to keep up. Attorneys today have many more career options than they did just five years ago, primarily due to drastic and sudden changes in technology, and they are less afraid of exercising their option to embark upon a non-traditional career path.
As a legal recruiter, I’ve seen many lawyers continue to lateral to new firms, mostly looking for the perfect combination between career growth and lifestyle balance. I have also observed an increasing trend towards lawyers leaving law firms altogether in favor of alternative legal practices. Many former law firm lawyers are starting their own solo or small firms, while others are joining virtual law firms or freelance networks that provide practice alternatives to the typical law firm model. Some former law firm lawyers look for happiness on a non-traditional path. Others, however, are taking advantage of changes and alternative arrangements within Big Law, as these large and prestigious firms adapt to changing needs, technology, and client demands. This article discusses the options that exist for lawyers seeking to make a change, and outlines the various trends in alternative ways to practice law.
Solo or Small Firm Practice
Many lawyers trained in full-service law firms are choosing to start their own solo or small firms. These lawyers were trained in the law firm setting, and can often handle sophisticated work for sophisticated clients, but at a reduced rate. Former big law firm lawyers most often choose to open their own firms when they already have a client base, but are not interested in sharing their hourly rate with partners and high law firm overhead. They often value the flexibility and entrepreneurship involved in running their own businesses. Many cost-conscious businesses seek out these law firm spin-offs, attracted by reduced rates and lean billing.
Amir Kahana worked at Gibson Dunn & Crutcher, Paul Hastings, and Manatt Phelps. In 2006, he left Big Law to service small and mid-sized business clients that were quickly being priced out of the big firm legal market. Amir’s goal was to provide the same level of service as the big firms, but at a fraction of the cost. This worked, and in 2008, Amir obtained one of the largest jury verdicts in Orange County history. Now his practice has grown and loyal clients are sending all of their work to Amir. “I view this as the modern full-service law firm, with case-by-case staffing, affordable rates, and none of the pretension of big firms. The goal is to provide services at affordable rates, and to create value for my clients, and I am confident that this is the best way to do that.”
Running a solo practice, however, is not for everyone. Many solos return to law firms after learning the realities of solo practice, including business development and other business tasks that can take them away from actual legal practice. Prior to hanging up your own shingle as a solo, lawyers might consider seeking help from bar associations and websites like My Shingle (www.myshingle.com).
Staffing Agencies/Document Review
Staffing agencies have existed for decades. These agencies frequently hire young lawyers or lawyers seeking temporary positions to handle projects like reviewing documents for law firms. The contract work is usually full-time at a law firm or other on-site location during a particular project, but it usually ends after a few weeks or months. Large law firms rely on these staffing agencies to manage document review projects, enabling these law firms to provide a lower rate to their clients.
Staffing agencies and document review firms play an important and often necessary role for law firms involved in large scale discovery, but document review can be a difficult practice for some attorneys. Many staffing agencies are trying to shift their business models to include substantive work by experienced attorneys while also continuing to offer large-scale document review services.
Alternative and Virtual Law Firms
Alternative law firms have become increasingly popular, and new ones start up almost daily. Some of these “alternative firms” are virtual firms where the lawyers do not work from a brick and mortar office, and others are firms that unbundle costs by offering alternative billing arrangements like flat fee pricing. These alternative law firms represent small start-up companies, or are retained by in-house companies. Just like any law firm, these alternative firms work for the end clients on an hourly basis. These firms are frequently virtual firms that staff their cases with contract attorneys, who only work when there is a project.
Axiom, founded over a decade ago in New York City, is an alternative law firm and is well-known for its legal innovation. Axiom hires only lawyers with exceptional credentials into this exclusive 1000 person firm, and Axiom lawyers are able to achieve the work-life balance that many lawyers try so desperately to find. Axiom lawyers usually work directly for General Counsels at Fortune-500 companies, who want big law firm lawyers without having to pay big law firm prices. When Axiom is retained by a company, Axiom can provide the company with a lawyer to go “on secondment,” discussed in more detail below, or it can serve the company by outsourcing managed functions or by managing projects.
Secondment firms are another alternative firm model that is gaining momentum nationwide. Secondment firms are essentially just a type of an alternative law firm, but they staff lawyers on temporary assignments for in-house companies. Like most traditional law firms, they work directly for in-house companies. Lawyers “on secondment” frequently work on-site at companies instead of from home, and the assignments – while limited in duration – are usually from 9-5 so they require a lawyer who can devote full-time hours while the work is ongoing. Lawyers with a transactional or corporate based practice are the best suited for secondment firms since many large companies still outsource their litigation work to law firms.
San Francisco based Paragon Legal Group is a secondment firm that was started in 2006 by former Morrison & Foerster lawyer, Mae O’Malley. Like Axiom, Paragon is a temporary legal staffing firm that matches former in-house lawyers with Silicon Valley technology companies. O’Malley has received accolades for creating an alternative way to practice law, and many lawyers across the United States are attempting to duplicate Paragon’s lucrative model.
Secondment firms have the ability to steer companies away from traditional law firms with their unique business models and lower rates. For that reason, secondment firms, like all non-traditional firms, compete with law firms of all sizes.
Freelance Attorney Networks
A freelance attorney network is a newer model that has gained popularity nationwide over the last five years. Freelance attorney networks usually consist of former large law firm lawyers who handle high-level, substantive legal work for law firms. Freelance lawyers typically work exclusively from home, so these networks appeal to women with young children or lawyers who have other career interests beyond substantive legal practice. Freelance lawyers are “contract attorneys” in the traditional sense of that word, but instead of focusing on document review, they help law firms with substantive overflow projects and high-level research, and sometimes provide substantive expertise for law firms in specialty areas.
Freelance networks are often confused with law firms, staffing agencies and secondment firms, but are actually quite different. Freelance networks are not law firms. Unlike alternative law firms, the “clients” of freelance networks are law firms, not companies or businesses. Freelance lawyers work directly for law firms on projects, and are not retained by the ultimate end-client. Furthermore, unlike staffing companies and secondment firms that staff lawyers on projects that frequently require full-time hours while the project is ongoing, freelance lawyers handle project-based work completed under deadline but according to the freelance attorney’s schedule. Freelance lawyers also work remotely rather than on-site at a company, providing more flexibility for lawyers who desire a practice more similar to a consultant than a traditional associate.
Small law firms are increasingly using freelance lawyers to assist their traditional associates and to grow their practices by allowing small firms to accept more clients and matters. This model appeals to law firms that need help with overflow, but do not want to hire potential competitors that also work for in-house companies or directly represent end clients.
A local freelance attorney network, Montage Legal Group, was founded in 2009 by Laurie Rowen and Erin Giglia, and was one of the first freelance networks in California with this specific business model. The group consists of former partners and associates from large law firms, many of whom are mothers of young children. Many credit the success of their group to their strong desire to help law firms thrive in this current economic climate. Laurie Rowen explains, “Our ultimate goal has always been to help law firms, not compete with them. When we get requests to work directly with a company or in-house legal department, we generally refer those matters to our law firm clients.”
Flexible Arrangements at Traditional Law Firms
For some lawyers, the best way to find life balance and ensure career continuity is work out an alternative practice arrangement within their current law firms. Many law firms have embraced flex-time and part-time arrangements. For flex-time, the hour requirements stay the same but the lawyer can work on his or her own schedule and from their chosen location. For part-time arrangements, the firm reduces the lawyer’s annual billable hour requirement. Additionally, law firms are hiring staff attorneys, who are lawyers working off the partnership track during set hours, for lower salaries.
Law firms are also working with the General Counsels of companies they represent and facilitating secondments by paying their own associates to work directly for these companies at the client’s location. These arrangements can be a win-win for all parties, allowing law firms to keep their clients happy, providing associates with excellent learning opportunities and giving clients great value for the cost.
What’s in Store for the Future?
The trend towards alternative legal practices is not likely to end anytime soon. Rather, more alternative legal practice models will appear as lawyer entrepreneurs continue to create unique ways to practice law. Associates should never feel stuck in their law firm positions, but instead should research whether an alternative way to practice law may be better suited for their life. Reaching out to a legal recruiter at a search firm can be the first step towards making a change. Many search firms like mine have expanded their client base by developing relationships with Big Law spin-offs and companies, so lawyers have other options from which to choose. Reputable search firms offer highly personal services, enabling them to use their wealth of resources and knowledge of the legal community to place lawyers in those types of positions.