Having put in my dues at big law, I have to say I prefer the culture and work at small or mid-sized firms. With the rumors swirling about possible mega-firm mergers (Heller & Baker, Pillsbury & Nixon Peabody), I have to wonder what mergers like these are trying accomplish? Are they looking to save their firms, á la the Heller rumors? Or expand into new markets, as was leaked to Above the Law in regards to Nixon?
[A] few weeks ago there was a firm-wide videoconference with the new [Nixon Peabody] managing partner Dick Langan. He said the goal was to double the size of the firm within five years; we all left saying the only possible way to go from 700 attorneys to 1500 in that short amount of time was a merger. He talked a lot about increasing our international presence, and specifically mentioned Paris and also South America.
As any firm begins their strategic planning process, bigger (footprint, headcount, revenue, PPEP) is always on the table. Seth Godin’s blog post this morning, “Should small businesses whine?” got me thinking if smaller can be the better approach. He believes that “Small is a weapon, not an excuse.”
If your small company can’t deliver a better experience (in areas people care about) than a big one, why on Earth should someone do business with you? I’m not saying you must have faster service, a bigger website, lower prices and twenty-four hour a day phone support. I’m saying that for some of your customers, you have to be monstrously, demonstrably, better.
The web is a great equalizer. A tiny business can have a better website than a huge one. A tiny business can do better customer support than a big one. A tiny business can write a better newsletter than a big one. Maybe not for everyone, but everyone is for the big companies. The passionate minority is happy to embrace the small company. As long as they focus and don’t whine about it.
Getting back to mega-firm mergers:
Does bigger translate into better customer service? Usually not. In fact, chaos usually ensues for months after a merger. Accounting systems don’t mix. End-users have a difficult time adapting to the new systems. Lots of turnover of staff and attorneys as everyone tries to figure out their new place in the pecking order, if they have one. Moaning and groaning that “that’s not they way we always did it.” Clients are always well aware of the chaos, leaving them vulnerable to your competition.
Will a 1700 attorney law firm better serve their clients than a 700 attorney law firm? Not necessarily. One merger motivator is the allure of adding new practice experiences or greater depth to your current portfolio. My experience is that after a merger, and without intervention by the business development department, most attorneys continue to just work with the same attorneys with whom they always worked. There might be some cross-over, mavericks who get it, but it is a slow process to change habits and culture. Once the allure of the merger wears off, everyone reverts back to their status quo. This is true with lateral hires as well, whether individuals or groups.
Can an 80 attorney firm, or a virtual law firm, provide a better client experience? Absolutely. There is a rise of smaller firms offering better service, responding to client requests for “alternative billing arrangements,” all the while attracting great talent and maintaining a healthy profit. It might not be the $2 million we see at some mega firms, but the attorneys are still living the good life. In addition, there are new firms springing up every day, such as Virtual Law Firm, brought to us by Craig Johnson of Venture Law Group fame, that are thinking outside the lawyer box. These new firms are more in tune with current technology and trends, looking for ways to motivate the Gen-X partners and Gen-Y associates.