February 2010 – The cover story for this month’s edition of The American Lawyer discusses the recent trend of leading large-firm lawyers launching their own boutique firms. According to the article, 114 partners left Am Law 200 firms in the last year to join small practices where they can provide the same quality they provided at larger firms, but for a better value.
Here are some excerpts from the article:
“Some might think it’s insane to leave a large firm to hang up a shingle in the midst of an economic downturn. But those who have gone out on their own think it’s crazy to stay put. If the lawyers who started their own firms had different personal reasons for leaving their old firms, their business rationales are nearly identical: It’s all about value. The recession has increased clients’ price sensitivity, creating an opening for smaller firms with lower, more flexible costs. Boutiques cater to cost-conscious clients by lowering overhead expenses, slashing rates, and offering alternative fee arrangements, while providing the same legal services that their founders offered at their old firms. ‘This is an advantageous time to start a firm,’ says consultant Joel Henning of Joel Henning & Associates. ‘These lawyers are skimming some of the cream off the top of their former firms and catering to clients’ cost needs.’”
And quoting Peter Chaffetz:
“Boutique founders say that they now have freer rein to take on new clients. ‘Conflicts were always a problem,’ says Chaffetz of the reason he left Clifford Chance, ‘and the downturn just exaggerated them.’ His firm, Chaffetz Lindsey, is currently working on cases against some of the world’s biggest banks–assignments he wouldn’t have been able to take at Clifford Chance, because the banks were clients of the firm.”
In a related article, The American Lawyer also interviewed Peter and Charlie Scibetta on the steps to take when setting up a new firm.
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