Lawyers Join Forces to Practice New Alliance : Boutique Law Firm Group specializes, enabling it to offer as good or better service than big firms sans the huge costs.
A group of lawyers from six Orange County firms met socially after work recently and, much as lawyers do when they get together for dinner or drinks, talked about matters that affect them, their clients and even society as a whole.
But this discussion was no idle chitchat. This get-together was different.
The meeting was part of an ongoing relationship the firms have been developing over the past year in an effort to address common problems besetting both the profession and the business of practicing law.
The six firms, each with 10 to 20 lawyers, are working on an unusual alliance they call the Boutique Law Firm Group. Experts say this group could become a model for small and medium-size law firms across the nation--the ones most squeezed by the economics of practicing law.
In the process, the group believes it can offer clients as good or better service than large law firms can but at a much-reduced cost: It does not have the overhead of big firms, the cost of satellite offices or the need to make up for lagging revenue in other departments.
“Ever wonder who the young guy is scribbling notes on a yellow legal pad in a deposition or a courtroom? He’s an associate at a big firm learning on the client’s time,” said Dennis V. Menke, a veteran lawyer at one of the member firms. “We’re not using clients’ time to train associates to become high-powered attorneys.”
Each of the six law practices are, in the profession’s terms, a boutique firm. That is, each limits its practice to a few specialties, such as real estate law or bankruptcy law. In essence, each acts like a department at a big law firm, which is where some of the managing partners came from.
The group’s effort to cut expenses by buying supplies and services at bulk discounts--something other groups of small firms do as well--is only part of the plan.
It is also pioneering an area of cooperation among firms aimed at providing even greater efficiency and savings. From sponsoring continuing legal education for more than 75 lawyers in the group to referring cases to each other or working on major cases together, the six firms can become a force to be reckoned with as they compete with the big firms.
“This is an interesting concept, one which may ultimately be emulated if they do it well,” said Gerald Scott Jr., a Pleasanton lawyer who heads the State Bar of California’s law practice management committee.
Law office management experts say they have not heard of any such group of boutique firms banding together for anything more than cutting common expenses.
“What would contribute most to their success is that each decision made by a firm in the group is made by that firm, that each boutique is self-governing,” said Fran C. Shellenberger. The Laurel, Md., lawyer chairs an American Bar Assn. committee on small law firm management.
That is, indeed, the intent of Menke and the partners at the other member firms.
Menke, of Menke, Fahrney & Carroll in Costa Mesa, came up with a somewhat vague idea in late 1991 to get a small group of boutique law firms together and see what happens.
“Some of the best attorneys are in small firms, and I thought it would be valuable to share the special skills they had in different ways,” Menke said.
So he began calling longtime practitioners, some of whom left the rigors and demands of big firms to start their own practices. He contacted an old friend, H.L. (Mike) McCormick, who had been managing partner at the biggest county-based firm, Rutan & Tucker, before leaving to set up his own firm, McCormick, Kidman, Behrens & Holzwarth in Costa Mesa.
Between them, they quickly got the group together: Alvarado, Rus, Miliband, Williams & Smith in Orange; Corbett & Steelman in Irvine; Hamilton & Samuels in Newport Beach, and Layman, Jones & Dye in Irvine.
“The best thing about the group is that it provides an opportunity for lawyers in the community with similar-sized practices to discuss mutual problems and pressures in the operations of their businesses and provide a sense of stability,” said Ronald Rus of Alvarado Rus.
Steven H. Sunshine of Layman Jones likes knowing that he can refer clients to reputable lawyers to handle problems outside his own expertise. “It is really comforting to a lawyer to know that you’re sending someone to a person who really knows another area of law, and one who is honorable and ethical,” he said.
The group has no bylaws or binding contract--”There’s no agreement that would make it work, and they probably know that,” Shellenberger said--but the lawyers like it that way. The group’s effort will continue to evolve and some new boutique firms will be added, Menke said.
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