Redwood Analytics

As I mentioned last week, there is no doubt that alternative arrangements are the hottest topic this year.  It is by far the number one topic firms are asking about and the number one conference topic as well.  Therefore given this is near and dear to my heart I find myself across the globe at alternative fee arrangement conferences and this week was no different.  The topics are generally the same and each conference adds a slight spin to the previous one attended.  The great part for me is not the topics on the agenda, as I have presented or heard them before, but the interaction between the audience and the presenters (including myself.)  At every conference I have walked away with something new and different, and 90% of the time it comes from audience participation.

This week's conference was a little different as it featured many strong personalities, some who I have heard before.  These individuals included Fred Bartlit former MP of Kirkland Ellis who now runs a very successful boutique litigation firm that operates solely on alternative fees.  He is a pioneer who is quoted all over about how he structured a new style of firm.  It is rightly so, as he had tremendous success in his previous post at Kirkland and is having more success with his alternative fee based firm.   On top of that he is one of the best trial lawyers in the world and therefore can command a room. 

Now that I have showered Mr. Bartlit with praises, I have to be frank and say that for the client base in that conference room, most of what he said, albeit interesting, was in fact not practical.  The reality is that his firm is built off of experienced trial lawyers.  Every single attorney in his firm (of about 50) is a seasoned veteran.  There is no real "succession plan" or "leverage" because the minor league for his firm happens to come from other firms.  It is a whole lot easier to have a very small team and implement a one system approach to alternatives.  I like his system and think it has some merit in some aspects of the firms we work with but a full turnaround in his words "would cut 70% of staff and almost no firm in the AmLaw 50 could do it."  It was an excellent presentation and it was followed by discussions including one with a passionate CEO from a firm that believes in pure value based pricing (see my blog on that topic) and has tossed away the timecards.  Again interesting, but for our client base and the majority of the legal world, it is not practical right now. 

The problem I had with this conference was that it had great content but the bridge to application for the majority of law firms was simply not there.  The types of tactics Mr. Bartlit and others are using can be adopted in some aspects of many firms but the "how to do that" was not addressed.  Instead everyone focused on full scale change.  Every hour that went by, leverage seemed to become more of an enemy to alternative fee success and that if everyone was a seasoned lawyer with tons of experience, all your alternative dreams would come true.  All listened intently, but for most firms leverage is a friend to alternative arrangements, not a detriment.   Using it wisely could be the key to achieve client satisfaction and produce acceptable profitability for the firm.

I think this is part of the panic mode that has hit the legal industry.  Much like the massive salary increases we saw for first year associates over this decade, there is a lemming effect.  Alternative arrangements are not going away, but you must be practical on how your firm adopts a structure and process around them.  You cannot jump head first into a shallow pool simply because several pioneers have had success.  They have that success because they have left large firms and started from scratch.  So unless every larger firm plans to abandon ship, dissolve, and start tons of boutiques, it is best to gather tidbits of what made these pioneers successful.  From there, take those tactics and implement variations within your firm for areas that are best suited for them.  Every firm has differences and you must be cognizant of your culture and your client base's culture as you make these changes.

It is always great to hear grand success stories and get excited about what new boutique firms are doing, but we must keep are wits about us.  You can gather great pieces of information only if you stay within focus of what your firm can achieve.  Otherwise you will be listening to a "get rich scheme" that just does not apply to your world.