On our recent LegalTech Week Journalists Roundtable, we went into a discussion about the increased emphasis of late on so-called midsize law firms. In particular, we talked about their needs when it comes to things like technology.
Certainly, more attention has recently been paid to this group of law firms. Clio provided a Survey entitled Legal Trends for Midsize Law Firms that focused on midsized law firms. Clio recently announced it planned to aggressively market to midsize firms in the future. An outfit called Actionstep recently released its 2024 US Midsize Law Firm Priorities Report. Thompson Reuters recently published its State of the Legal Market Report, which deals in part with midsize law firms.
What’s a Midsize Law Firm?
But any discussion of midsize law firms begs the fundamental definitional question: what is a midsize firm? To a solo practitioner in a small town, a midsize law firm may be the town behemoth of 10 lawyers. To an AmLaw 100 or 50 firm, a midsize law firm may be a firm of 100 lawyers. To a regional firm of 150 lawyers, a midsize firm is probably one of 25 to 50.
Focusing on size when it comes to law firms is, in fact, way too simplistic an approach both for vendors and certainly for law firms themselves. It’s too broad a brush for determining needs and strategy. Size may be a convenient label, but it does not necessarily reflect reality.
Law firms today face a myriad of needs and decisions in so many areas. Things like purchasing decisions, long-range strategies, branding, practice area focus, staffing and recruitment, financial management, risk management, infrastructure, expansion and growth, client matters, professional development, and many other decisions law firm management faces daily. Assessing and meeting these needs and making management decisions must be based on factors more important than just size. What are some of these?
You may call me Terry, you may call me Timmy. You may call me Bobby, you may call me Zimmy. You may call me RJ, you may call me Ray. You may call me anything, no matter what you say
You’re still gonna have to serve somebody.
Bob Dylan, Gotta Serve Somebody
Labeling a firm based on size doesn’t tell you anything about the type of clients a firm serves. Size matters is often a repeated mantra. But when it comes to the needs of law firms, it’s really the service that matters: the service of clients. Looking at a firm’s mix of clients will tell you a lot about the tools it should use to meet those needs and the information it needs to make sound decisions.
A firm serving small businesses in Bowling Green, Kentucky (population ~75,000) doesn’t need the same things as one serving multi-national corporations in New York City. A firm serving injured individual plaintiffs has different needs than a firm defending multi-state class actions. Some firms will need sophisticated Gen AI tools to do what they do; others will not. It’s not a function of size but of client need.
Another significant distinguishing factor among law firms is the business model they use. The needs and strategy of plaintiffs’ contingency firms differ from those of a firm that derives its revenues and profits from the billable hour. A firm like Bartlit Beck (74 attorneys) that handles most matters on an alternative fee basis differs from Kirkland and Ellis, which may still primarily bill by the hour. Morgan and Morgan is a national firm of over 1000 lawyers and would be considered a big law firm. Yet its business model, needs, and overall strategy are different than, say, Davis Polk, which has roughly the same number of lawyers.
A big question for most law firms is not how big we are but who we compete against for business. Barlit Beck and Boies Schiller (150 lawyers) routinely competes against AmLaw 100 firms for business. But these firms would certainly not necessarily be considered BigLaw. Yet, they have to have the tools to compete.
There are any number of boutique firms that compete with the big players for very specific pieces of business, as well. Take Barst Mukamal, which employs 11 attorneys and specializes in immigration law. Attorneys at Barst & Mukamal speak 20 different languages, and the firm has established units geared specifically toward Japanese, Chinese, Korean, and South American clients. Its needs differ from a firm of 10 that primarily competes against local firms. Add to the mix that some firms only compete in specific areas like Barst or litigation boutiques. Lumping these firms together based on size inevitably leads to poor product market fit.
Does Size Matter?
Clients served, business model, and competition are much more significant factors than size when it comes to meeting the challenges of running a law firm and, for that matter, offering products that law firms need.
Certainly, at the end of the day, it’s possible to say a firm that serves a specific category of clients with a particular business model who competes against firms of specific characteristics will more likely than not be a certain size. That’s a convenient label, but it does not necessarily reflect reality. Thinking of firms only based on size leads vendors to offer products that don’t meet needs and aren’t purchased or used. It leads to misplaced strategies by law firms. Does size matter? Only tangentially.