November 11, 2005
Law Firm National Reach Is Overrated
Scott Gawlicki, reporting on Martindale-Hubbell’s 16th annual survey of general counsels in Corporate Legal Times, noted that only 29% of surveyed GCs considered it important for a law firm to have a national reach.
I recall talking to the founding partner of a prominent southern law firm who remarked, “We have the highest rates in the city. Most of our business is for New York clients and they consider us to be the best bargain around.”
Granted, if you are pursuing the top 10% of the Fortune 1000, size and location (including international) are important but the other 900 corporations in the Fortune 1000 have discovered the value of using mid-sized law firms. In our own survey of managing partners, we found a significant concern over competition from larger firms. When we asked more detailed questions about lost business, it appeared that mega-firms did not have a material impact on fee revenue, client retention or the availability of talent.
Ninety percent of general counsels say they still rely on referrals (not size) when choosing a law firm. National reach or law firm growth is just not highly valued by the majority of general counsels. Jim Taronji, Jr., a 25-year veteran in-house lawyer and a former General Counsel, put it this way in a letter to the editor of Corporate Legal Times—that “message falls on deaf ears. A law firm becomes suspect to its clients if it only grows for the sake of growth.”
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