As the recession of 2008 hit, there were not a lot of industry leaders saying the recession was good for business. On the other side of things, quite a few middle-market law firms saw the down economy as an opportunity to pick-up some business from struggling corporations.
“[These corporations] began asking why they were spending $800 an hour for a New York firm if there were other middle-market firms in Portland or Cleveland, for example, who had the same specialized expertise [at a lower fee],” says Scot Draeger, an attorney with Bernstein Shur, “The bad economy facilitated the trajectory of our practice and our success in courting big business.”
Bernstein Shur and other law firms throughout the state of Maine have been marketing their expertise and value to clients out of state. The law firms in Maine have been using social media more so now than ever before in an effort to acquire new ways to bill clients.
“I think as the economy shifted, law firms switched gears and moved from thinking ‘clients will find us when they need us’ … to a more client-focused approach to identifying and keeping clients,” says Gretchen Johnson, director of marketing at Verrill Dana.
One of the best advantages for these middle-market law firms from Maine and other surrounding New England states is that they charge hourly fees that are half the amount charged by larger firms.
“We’re expanding into southern New England in part because we have a good value proposition,” says James Matsoukas, director of marketing and business development at Pierce Atwood. “We can provide the same quality of service at a lower rate and we are more nimble. The smaller you are, there’s not a lot of overhead and you can move more quickly.”
The smaller firms have less overhead because of fewer offices and employees to take care of on their payroll and in their budget. Fees will be remain low if the law firm’s offices are based in low-cost areas such as New Hampshire and Maine, even when the head attorney is based in Boston.
“A lot of large firms got that big by acquiring other firms and not only do they have more offices and employees to maintain, but there also tends to be more cultural tension stemming from merger integrations,” he says.
Some of these middle-market law firms are even allowing their clients the chance to set the legal fees that they will pay.
“There are five to 10 legal components of such a project and we have an excellent understanding of the scope of our efforts on each element,” says Draeger. “Businesses need certainty in expenses and legal is no different. A fixed fee is something they can plug right into their balance sheet.”
If a fixed fee is agreed upon, the law firm will want to resolve the case as quickly and efficiently as possible.
“We’re far ahead of this trend and many firms in New York and D.C. have not shown a willingness to take that risk, but that’s the trend and that’s been a major piece of our business,” Draeger says.