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Monday, March 09, 2009
Law - "Firms Trade Brick-and-Mortar Prestige for a Better Business Model"
An interesting article today in the Washington Post, reported by V. Dion Haynes. It begins:
Across the country, the recession is putting increasing pressure on law firms to slash spending and discount their services. Client demand for lower prices is prompting firms to outsource some of their document work to India, hire more temp or contract lawyers, shift from billable hours to fixed fees and eliminate staff.Geoff Willard, a Northern Virginia lawyer who largely represents newly launched companies, illustrates how the Wal-Mart effect of discounting is playing out in the Washington region's legal community.
Willard left his job as partner at DLA Piper, a huge global blue-chip law firm, because, he said, he was fed up with the traditional business model that required it to annually increase rates and billable hours to finance ballooning profits and overhead.
Last fall, he joined a start-up "virtual" law firm that he said is much better suited to the current economic conditions: It does business mainly over the phone and Internet and through video conferencing. Because the firm lacks two of the biggest cost drivers -- a prestigious brick-and-mortar office and associates -- he said he is offering his clients substantial savings compared with what they paid before.
"Everyone realizes the big law firm model is broken," said Willard, a partner in Silicon Valley-based Virtual Law Partners, who works out of his office -- adjacent to his kitchen and family room -- at his Reston home.
Although thousands of lawyers and staff members across the country have been let go during the past six months, Willard and Virtual Law's founder say that since June they have been adding three partners per month. "When you tell people, 'I'm going to drop my rates 25 percent,' it's a pretty easy decision" for them to hire you, Willard said.
Posted by Marcia Oddi on March 9, 2009 10:01 AM
Posted to General Law Related