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Boutique law firms - The call to go small

Boutique law firms may not inherit the entire legal services market of the future. But they certainly plan to be a key part of it.

Peter Carayiannis

Challenging economic times, technology and globalization have turned the economy on its head and the legal services industry has to adapt to a world profoundly different than what it was a decade ago. In this competitive environment, where uncertainty is the only sure thing, the requirement for law firms to innovate and differentiate themselves from the rest is more significant than ever. Today’s clients want efficiency and transparency, and increasingly they know where to get it.

Larger firms, in their own way, are trying to respond to client demands by adopting new management structures and operating practices. Those that succeed on this front will no doubt manage to grow their markets both nationally and globally. And yet, many large and midsize firms continue to struggle with the pressure of being all things to all clients at a time when too many lawyers are chasing too few corporate dollars.

It should come as no surprise then that many big firm lawyers are reconsidering their strategy and taking a closer look at smaller practices. Indeed, the new economy has presented a fresh opportunity for boutique law firms to compete with midsize and large firms on both price and service delivery. Of course, law firm boutiques are nothing new. But nimble as they are, they are well poised to survive and thrive by focusing on core expertise, keeping overhead costs low and making the most of technology.

National reached out to five heads of boutique firms across Canada to share their views on why they chose small versus big, some of the challenges they face and how they stand out from the rest.

Part of our client-centric approach is focused on value-based billing and avoiding the billable hour business model. We quote fixed fees and stick to our quotes. Beyond that, we work in a distributed way in which our lawyers work with clients at their own offices. And we’re also always trying to be as innovative as we can by leveraging the best advantages that technology can give us. This combination allows us to avoid most overhead costs and pass those savings along to our clients… The biggest challenge to this way of doing things, however, is adoption. We’re new, and the broader market doesn’t always accept something that’s new immediately. So, we have to find the right fit with the right client who wants to work in this model. But our story has clearly resonated with clients and prospective clients, as the reception has been very encouraging — and they want to hear how we’re structured and how we can help them.

The job we do is really all about serving the public and the population. But it’s also a dangerous thing, in a way, to focus only on one area. On the one hand, when clients call you they feel that you really know what you’re taking about because you focus on one thing and know it well. That’s the good thing. The bad thing is that they think you’re incompetent in the rest, which is not true because lawyers are lawyers. We can do real estate law and environmental law just as well because we know these areas quite well […] Our boutique specializes in public law. Unfortunately, that kills business for us in these other fields. Municipal law is a big basket of things, and when municipalities feel a certain area is outside the general scope of municipal law, such as real estate and environmental law, they’ll tend to call other boutiques or big, general, full-service firms. The danger with all that is that we have to promote our specialty without making our services appear too restrictive.

The challenge with big law firms is that litigators don’t get into court much. We have tons of litigation experience, in courts and in hearing rooms, and we can offer that experience to our junior lawyers as well. Our juniors get great experience in the key litigation skills — direct and cross-examination, argument — at a much earlier stage. We recognize these contributions at an earlier level too, as Cynthia Spry has been a partner at our firm since her fourth year of practice. Furthermore, when clients come to us, they get us. So, very often, at the big firms, you’ll ask for Ed Babin, he’ll meet you that first time and you may never see him again. That’s a real frustration for clients. Here, you actually get Ed Babin, or Ellen Bessner. That’s a huge differentiation from a client’s point of view.

Our strong business areas are [in dealing with] foreign workers, where we’re very active, permanent status applications and litigation. One of our differentiating factors is our litigation work. Our experience in court and immigration tribunals and our knowledge of the enforcement mechanisms and pitfalls helps us work effectively in our field […] We don’t try to manage a client’s home purchase; we don’t try to do their wills and estates and we don’t try to do commercial contracts. We do what we do, which is move people around in the immigration field, and we do it quickly because business operates on its own timescale.

We’re in the centre of a large city and we want to practise in that world — downtown, here in Calgary — but we want to do it out of a smaller office. Most of our lawyers have been trained or have come out of a big law firm experience; they bring that capability here and practise to that level here […] What probably stands out is this question of conflict of interest. Given the smaller size of the firm combined with our focus on litigation, we don’t come across conflicts frequently at all. As we don’t get involved in business transaction work for clients, it means we don’t find ourselves conflicted with any litigation work because of some previous, or hoped for, solicitor’s work for clients. Not only is that attractive for clients, but it’s also a benefit for our colleagues in bigger firms, as we can be a safe harbour for conflicts.