On July 18, 2017, Law360 published a rebuttal op-ed written by Ronald Shechtman, Pryor Cashman's managing partner, in which he explains how midsize law firms have gained a competitive edge in the legal market. The full op-ed can be viewed below.
The Rise of Midsize Firms
Recently, this publication featured an op-ed in which one law firm partner contended that midsize firms will be the next casualty of the legal market, due to a supposed inability to compete with BigLaw or boutique firms for business.
It struck me that in order to meaningfully consider this proposition, we must first define what a "midsize" law firm is. Is a 30-lawyer shop with a handful of specialized practices midsize? Or are we talking about the Chadbourne & Parke and Kaye Scholers of the world (pre-merger)? Or is a midsize law firm something in between? Moreover, are we to believe, as Fredric Newman's op-ed suggests, that any firm that isn't a global behemoth or a boutique of a few dozen attorneys has no place in the market?
As the managing partner of Pryor Cashman, a full-service firm of approximately 150 lawyers, I have been amazed by, and even written about, the volume and sophisticated nature of business opportunities that have been presented to us on a consistent basis since the 2008 financial crisis. While clients still rely on large global firms for bet-the-company litigation and multi-billion dollar, cross-border M&A deals, they are increasingly recognizing the unique value offered by midsize firms - i.e. experienced, hands-on attorneys who are unencumbered by leverage requirements or bureaucracy, but also possess the depth and infrastructure to offer premier services at highly competitive rates.
Indeed, as consumers have become more cost-conscious and value-driven, work that once went to BigLaw by default has steadily moved to lesser-leveraged firms. Although Mr. Newman argues that the bulk of this work has and will continue to flow to hyper-specialized boutiques, many midsize firms, including my own, have seen record profitability year after year precisely because they are competing for - and winning - this kind of business.
Further, the idea that midsize firms have, due to their size, struggled to establish prestige is simply untrue. As a full-service enterprise, which I submit is not at all the same as a firm of "generalists," Pryor Cashman is consistently recognized among the top firms in the country by clients, the media and outside ranking agencies. And we are not alone. Many midsize firms are perceived as viable alternatives to BigLaw chiefly because of the caliber of services and attorneys they are able to offer - many of whom trained at BigLaw.
Similarly, the notion that midsize firms will have difficulty retaining top-tier lawyers is misguided. In recent years, I have seen growing numbers of exceptionally-qualified lateral candidates looking to join a midsize firm either because they find it too difficult to cultivate their practice within the confines of BigLaw, or have found building a book of business at smaller firms untenable because of an overall lack of support and resources to scale up when a case demands it. In fact, over the last two months alone, two prominent partners from Sidley Austin and Winston & Strawn have joined Pryor Cashman; and over the last few years, seven additional partners from boutiques and other BigLaw firms have joined us and are thriving. This is further evidence that entrepreneurial lawyers are abandoning specialized silos in favor of platforms that will facilitate the growth of their practices.
Talented junior associates are also clamoring to get into midsize firms to avail themselves of the opportunity to work side-by-side with partners on substantive matters. And, because the midsize model is low on leverage, these associates will have a better chance of originating business and eventually becoming partners.
Our competitive advantage springs from our deliberate size. Recall that the rules of economy of scale are inverted in the legal profession, meaning that as firms grow and multiply offices, the attendant costs of increased management and infrastructure to meet the demands of more lawyers - not to mention the pressure to match other BigLaw salaries and bonus models - overcome the efficiencies. At 150 lawyers, firms like Pryor Cashman are well positioned to take on many forms of new business while delivering the added value clients now require.
Though we can expect to see Am Law firms continue to lead the market in mega-deals and life-or-death litigations, by all indications, midsize is on the rise.
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