New law firm makes case for industry disruptionShifting economics, cultural realities challenge traditional tenets of profession
For law firms, the old ways might no longer be the best ways.
That was a factor cited by nine attorneys who broke off from one of the midstate’s most prominent firms this month to start their own business. Their endeavor, dubbed Pillar+Aught, emphasizes collaboration among lawyers, flexible billing options for clients and adaptable schedules for the people who work in their small, Silicon Valley-esque office.
The firm’s founders see Pillar+Aught as a needed disruption in the legal profession — and they may be right. Clients are savvier about their options today, not to mention more protective of their bottom lines. The landscape has also changed in terms of what firms need to do to attract and retain the best talent. More attorneys are looking for opportunities that offer work-life balance, more chances to collaborate and more freedom to adapt to clients’ needs.
The attorneys at Pillar+Aught felt they could best meet those demands by building a firm from the ground up. But they’re not alone in wanting to try a different approach. Other midstate firms are also looking for creative ways to meet the expectations of the modern world.
Lawyers as a service industry?
If necessity is the mother of invention, then many of the changes in the legal industry stem, at least in part, from the need for firms to turn a profit.
Demand for legal services has stagnated in the roughly 10 years since the recession, according to an annual report released by Thomson Reuters and Georgetown Law. The study predicts similarly lackluster demand in 2017.
The stagnation stems from a range of factors, including a growing number of businesses that cut costs by beefing up their in-house legal departments or farming certain work out to professionals who can do it for less cost than a traditional law firm,
The industry also has to contend with an increasingly savvy group of clients who can just hop on Google to answer a question or research competing firms, said Craig Staudenmaier, a partner with Harrisburg-based Nauman Smith.
“I think lawyers had to finally wake up to the fact that they’re a service industry,” he said. That means firms doing more to accommodate clients — and understanding that those clients will leave if they don’t.
Some firms, including Pillar+Aught, have adjusted to the change by trying to offer more flexible billing arrangements than the traditional by-the-hour model. Although arrangements like purely fixed-rate services only account for a sliver of law firm revenue nationwide, the use of budget-based hourly billing — where clients place a cap on how much they want to spend — has skyrocketed, according to the Reuters/Georgetown report.
Cost isn’t the only thing clients want, though. Quality still matters. To that end, many firms are taking steps to increase collaboration among attorneys who can pull from each others’ expertise to offer the best services.
Many firms have always operated this way to some extent, but some are making conscious efforts to further encourage attorneys to work together.
Buchanan Ingersoll & Rooney, a national 500-attorney firm with an office in Harrisburg, has designated collaboration rooms in some of its offices, and is working on ways to reward attorneys financially for credit-sharing and mentoring, said Danielle Rosetti, the firm’s director of recruiting and development.
Creating the right culture for that kind of collaboration matters, too, said John Dornberger, administrative principle of law firm Post & Schell’s Harrisburg office. Developing that culture starts with hiring the right people, he said: If firms hire people who want to stay siloed or don’t work well with others, then financial incentives to collaborate will only go so far.
Attracting, and keeping, the best
Just like clients don’t expect the same kinds of services law firms offered 20 years ago, the attorneys working there don’t want outdated workplaces.
The talent pool is larger than it’s ever been, giving firms more ability to bring in attorneys who might not have traditionally considered working in a small city like Harrisburg, Staudenmaier said. But attorneys also seem less likely to stay in one place.
“In the past, you came to a law firm, you worked so many years. (It was a) you stayed there, you died there kind of thing,” he said. “And I think that’s not the case anymore as much.”
Part of attracting and keeping the best talent is offering the right combination of economic and professional incentives. Post & Schell does that, in part, by playing up the firm’s financial health and carefully managed overhead, Dornberger said.
“When we do that, what we can tell the laterals is that when you come here, you can price your work such that you’re not pricing yourself out of the market,” he said.
Offering attorneys of all experience levels the right intellectual challenges and opportunities to grow also goes a long way in creating an environment that attracts the best in the field, said Jeffrey Rehmeyer II, president of CGA Law Firm in York.
CGA increased interactions between its younger and its more-seasoned attorneys in recent years to encourage them to share their expertise, Rehmeyer said. The firm also offers training, in practical and soft skills, and opportunities for social interactions, like employee picnics and dinners at nearby restaurants.
“Practicing law can be very fulfilling, but it can also be very demanding,” Rehmeyer said. These kind of social events create an environment where “the good times are better, and the bad times aren’t as bad.”
Buchanan Ingersoll has similarly ramped up its social outings, offering everything from retreats to book clubs to new-parent groups, Rosetti said.
It has also kept an eye on the growing desire for flexible, family-friendly policies like increased parental leave and the ability to work shorter hours or from home.
That kind of flexibility, in some ways, flies in the face of the image of the traditional firm, where long hours were the norm. Buchanan has tried to change that perception by openly recognizing the accomplishments of its “alternative schedule” attorneys and making sure they don’t get overlooked for promotions.
Still, it can take time for attitudes to evolve, Rosetti said. “You can’t just snap your fingers and change that overnight.”