The Impact of Small Firms and ‘Country Lawyers’

LeeHigh6 KelliPricePhotography RenoNVJuly2017

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When I describe myself as a country lawyer, most of my friends and family laugh. Yes, I have a specialty in business bankruptcy law, and yes, I am a professor of consumer and business bankruptcy law, and yes, I have practiced all aspects of bankruptcy law for three decades. But the description remains apt.  The reason is that life in a small town necessitates versatility in the practice of law. As a bankruptcy lawyer, one must be well versed in federal bankruptcy law and state law, which generally defines bankruptcy property rights. The interests of individuals and businesses often intersect because many private businesses are owned by a small number of individuals or family members.  What affects the business affects the individuals and vice versa. Although Apple and other publically traded enterprises get the attention, it is private businesses that are the economic engine of most communities.  This is the “Main Street” that metaphorically contrasts with “Wall Street.” My practice serves the interests of “Main Street.” Although Reno is the largest town in northern Nevada, boasting a population of 300,000 for the Reno/Sparks area, it is a far cry from anything that would characterized as a large city. And in this part of my state where outlying communities consider Reno “the big city,” the rural overtakes the urban in almost every respect.

When I started the practice of law in the mid-1980s in Portland, I envisioned the apex of my career as being a partner in a large and important law firm with the corner office. I had not quite reached the point in this fantasy where it was important for my name to be on the door, but I definitely equated success to moving up the ladder in a large metropolitan firm. My area of practice was going to be medical negligence defense, for which my college and graduate degrees in biology would be put to use, and I was going to be a trial lawyer. I had no idea how to get a client.  I had no idea how to keep a client, how to talk to a client, how to bill a client or how to actually get paid for the work I performed.  These were all things that the law firm would take care of, and, as if by magic, the work would simply appear on my desk and my climb up the ladder would commence. The business side of practicing law was not only a mystery; it was something I didn’t even know existed.

It didn’t take too long to realize that my vision of success was superficial and entirely off the mark.  As my career developed, I learned that I am much more interested in and better suited for business and debtor-creditor law. I learned that the most important component of practicing is my relationship with each and every client. I learned that answers always involve options and that the most I can give my clients is my good judgment. I am still not sure I know how to get a client, but I think I know how to talk to a client, whether what I have asked a client to pay for has produced value, and how to get paid for the services I perform. I learned that the corner office measures nothing of significance.  I learned that producing the highest quality legal work in each and every case was the only way to “market” myself.    I learned that being a good boss is the best measure of business morality and that I would not ask anyone who works with me to do something I would not be willing to do myself.  The title of chief cook and bottle washer suits me just fine.

Main Street clients are generally not interested in whether the reception area of their lawyer’s office is decorated with imported marble. They generally are much more concerned with finding someone they can talk to in order to find solutions to their problems for a reasonable price.

With the goal of the corner office long in the rear view mirror and more than three decades later, I am proud to be a country lawyer.

I.

When I moved to Nevada as a young lawyer, my father advised me not to join a firm but to go out on my own. Before the move, I was fortunate to have the experience of working with wonderful lawyers at a large Portland law firm who wanted to continue our professional relationship long distance.  I could have continued doing work that was very satisfying and interesting; I would have had a source of business; and I could call my own shots. Today, such a proposition would be entirely within the realm of possibility. Technology has altered the time-worn requirement of physical presence for the exchange of documents, information and ideas. But in 1988, it was overwhelming – and I turned it down. I often wonder what my life would have been like if I had accepted.

One strongly motivating factor in my decision of three decades ago was the belief that I needed the mentoring and influence of older lawyers practicing with me in a law firm. I have never regretted my choice. But I have to wonder if, with the changing demographics of the practice of law and delivery of legal services, it remains true today.

II.

Does the large law firm continue to provide the necessary training group for new lawyers?

Consider that the demands for legal services are drastically changing. Corporations are no longer willing to shell out whatever their corporate counsel have billed for fees, turning instead to services provided by in-house counsel at substantially less cost. The job market for lawyers is dramatically changing, with fewer associate positions available and a shrinking market for growth as a practicing lawyer. Technology – a word I can spell but don’t truly understand – has a substantial effect on the practice of law. In the 1980s, electronic legal research was emerging, but law firms continued to purchase and house law libraries. Today, it seems safe to say that the contents of most of those libraries are available online. Leather-bound tomes and bound series of reporters and treatises may have typified the look and feel of respectability and immutable tradition of the law firm model of delivering legal services, but these look particularly anachronistic in today’s sleek electronic world.

The law firms themselves have also changed.  “Local” is a term that may apply to the produce used in the latest trendy restaurant, but its meaning is hazy when it comes to how lawyers organize themselves. In my state, there remain only a handful of law firms with offices solely within the state.  Most of the medium or large firms have merged with regional or national firms. Whether this conglomerate model is good or bad, right or wrong, time will tell. But it is a significant change.

III.

The private practice of law is changing to reflect large law firms that are no longer localized by state or city. Large conglomerates have formed regional, national and international firms. What does not seem to have changed appreciably since I started the practice of law is the delivery of legal services in small firms or by solo practitioners. Technology has unquestionably produced advantages for small firms and solos. Maintaining a law library is no longer cost-prohibitive, as just one example. But I have observed that solos and small firms still provide a significant portion of legal services to local businesses and individuals, a position that is enhanced upon consideration of boutique practice areas for whom the large firm – now the regional or national conglomerate – creates the obstacle of clearing conflicts. Not insurmountable, but a clear choice for many lawyers.

The contrast between localized small firms and solo practitioners and the emerging firm conglomerates is also apparent in the choice of lawyers with whom to practice. The model when I started practicing was that a firm trained, mentored and groomed a young lawyer. If the firm and the lawyer fit well, each chose the other as partner. My peers and I used to talk about the inability to practice in one group or another, often because of one or more existing partners considered intolerable. Today, young lawyers in a local firm that merges have far less choice in their future partners. The pool will consist of the existing partners, many of whom are unknown, and will expand to further unknowns with future mergers. The connection between lawyers who practice together is frayed by this trend.

IV.

Lawyers chose to practice in small firms or as solos for many reasons. For me, two of the strongest are the extent of control over the relationship with clients – who they are, how much and under what formula they will be charged – and over environment. The latter could include such simple factors as the brand of coffee brewed in the communal pot every morning and whether fresh flowers will greet clients in the reception area.  On a larger scale, environment includes the people with whom one works. I affirmatively and actively chose to practice with my partner.  That choice forms the basis of our working relationship, which as every lawyer in private practice knows, is much more than showing up to work every day and going through the motions (no pun intended). It is a relationship based on trust and collaboration, on utilizing the strengths of each and on being willing to change to reflect new ideas and needs.

I have my own bias because the small firm model has worked so well for me, but even putting that aside, I believe small firms have the ability to adapt to the changes in the legal world more quickly and more effectively than any other organizations of lawyers. Small firms generally do not labor under the requirements of corporate firm governance to effectuate change; if something seems like a good idea, try it. As the legal landscape shifts from the billable hour as the method of valuing the delivery of legal services, small firms may find themselves far better equipped to respond to different frameworks and find creative means of adapting to clients’ emerging needs.   Small boutique firms may find new niches as outside counsel for corporations that still need to retain specialized legal services.

The future of the practice of law is unknown. Are lawyers the blacksmiths of the late nineteenth century, about to be rendered obsolete by the juggernaut of the automobile?  Or will lawyers be the emerging auto mechanics? Time will tell, but I see the lawyers in small firms as the grease monkeys of the legal world of the twenty-first century.

 

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