Business Journal Reporter Jane Yu asked law firms about how they got lean during the downturn, and how those steps carry over into better times.
Kim Thompson
Rutan & Tucker LLP, managing partner
Rutan & Tucker’s management team has historically pursued a conservative growth policy, so we don’t tend to go into large upswings and downswings in hiring or retention during cycles, though we did have to do some downsizing in light of the magnitude of the last down cycle. As the economy recovers, we have to also keep that conservativeness in mind while anticipating the needs of our clients.
As one of the area’s largest full-service law firms with multiple practice areas, we have the benefit of a highly diversified portfolio of clients. Depending upon business cycles and other factors, if one section is slow, we tend to have another that is active and able to take up the slack.
We always look for ways to increase our efficiency, such as making investments in new technologies. For example, to cut down on travel costs, our offices in Costa Mesa and Palo Alto are linked for videoconferencing. Several years ago, we made a significant investment in renovating our Costa Mesa headquarters to accommodate new growth rather than incur considerable expense to move to a new location. Our clients appreciate our central Orange County location because that helps them be more efficient, too.
We have also been able to maintain one of the lowest levels of overhead in our law firm peer group by keeping an eye on expenses generally, and periodically stepping back and performing an in-depth cost analysis involving attorneys throughout the firm.
We’re believers in recycling and are happy to have been honored by Goodwill of Orange County as one of the first businesses to participate in Goodwill’s shredding and recycling program.
Drew Emmel
Allen Matkins Leck Gamble Mallory & Natsis LLP, operating partner of OC office
Effective staffing measures are key. We continue to invest in our attorneys by seeking only the best and brightest new talent from law schools and lateral hiring. [We also focus on] training and developing younger associates so that they are consistently able to learn and grow.
Allen Matkins continues to evolve in how we efficiently integrate our five offices in California. We have always worked as one firm and are able to rely on [the] expertise of our attorneys from all of our offices to best serve our clients throughout the state and country. This greatly expands our potential to garner business without pigeon-holing ourselves to specific industries in individual regions. This also allows us to keep all of our attorneys busy by staffing projects throughout the firm based on current utilization and capabilities, even if part of the team is in Orange County while the other attorneys are in San Francisco, Los Angeles or San Diego.
Chris Dubia
Dorsey & Whitney LLP, Southern California office head
It’s not really about cutting costs. Every industry and every business has had to find ways to become more efficient and, obviously, the legal industry is no exception. There have been some attempts to use things like offshoring and outsourcing to reduce costs, but we’ve found that client service and responsiveness are too easily impacted, [so] that’s unacceptable. To achieve many of the same objectives, the firm, for example, created LegalMine, an in-house solution to address the costs of e-discovery. We’ve also realigned staff to account for the reality that more of the information and documentation involved in the practice of law is electronic from the outset. Combined with things like videoconferencing, which we use extensively, we have managed costs effectively while maintaining high levels of client service. In the end, clients will decide what works from a cost-versus-benefit analysis. Our goal is to provide the right outcome while being sensitive to the cost pressures all our clients face.
Richard Jones
Jones & Mayer, owner
Jones & Mayer has been very fortunate over the past few years. Instead of downsizing, we have actually expanded both in personnel and by opening our Roseville office. With expansion and growth come expenses, and we are constantly striving to become more efficient in our day-to-day practice. Technology has played a major role in this, from smart phones and remote PC access to document-imaging systems. All of these allow us to easily work from anywhere with an Internet connection. That may sound like an obvious answer, but it is no small task to move from a paper-based firm to the digital age. There have been some growing pains, but now all our attorneys are comfortable and very adept at using the technology, even those who until a few years ago had barely touched a computer.
Additionally, we select the best personnel we can find and utilize them well. Many of our talented staff are trained in multiple areas. Where some firms have “floaters” or hire temps to cover for the secretary who is on vacation or taken ill, we are able to seamlessly meet the needs of our clients by delegating the workload to existing staff. This is not only a time-saving but financially sound approach to a potentially expensive personnel issue.
The bottom line is that, even in a down economy, people need attorneys. By efficiently utilizing our resources, Jones & Mayer has been able to position itself as an attractive firm to support California’s cities and law enforcement agencies.
Craig Barbarosh
KattenMuchinRosenman LLP, partner
In early June, I left [Pillsbury Winthrop Shaw Pittman LLP] and moved to KattenMuchinRosenman LLP, opening Katten’s Orange County office. Fortunately, our practice has been very busy for the past several years. Given the national scope of our practice, we operate efficiently and lean by utilizing the full resources of the entire firm, regardless of office location. Katten has an excellent geographic footprint with large offices in New York, Chicago, Los Angeles, and Washington, D.C., and smaller, but growing, offices in Charlotte, N.C., London and Shanghai.
We are very conservative about investments. We do not simply pursue the “hot areas” unless they are supported by clear opportunities to serve the needs of our clients. We’re not going to open a practice unless we have clients asking for it. [We do not] pursue growth based on some notion of “build it and they will come.”
As a new office for Katten, we are very focused on careful, strategic growth of our OC office consistent with the needs of our clients and the core practice areas of the firm. We hope to grow the office over the next year, with primary focus on sophisticated financial services, corporate and private equity, and real estate practices.
William O’Hare
Snell & Wilmer LLP, administrative partner
The past several years have presented broad economic challenges, and law firms have shared in that pain. We concluded early on that we should pay close attention to our costs, and also remain mindful that neither we nor any other successful organization is likely to cut itself to greatness. Accordingly, we made a deliberate judgment to not implement lawyer layoffs in our office or broad cuts in staffing. Instead, we immediately reassessed our hiring needs and reduced by about half the number of law students recruited for our summer associate program, which is the primary source of hiring for new law graduates. While we did not implement a hiring freeze as such, we exercised even greater care than usual in making decisions to add lawyers or support staff. As a result, we did experience some reduction in our total number of lawyers and staff, realized primarily through natural attrition. We also looked hard at our discretionary expenses, and temporarily suspended certain events, such as our firmwide retreat.
At the same time, we continued to move forward with sensible expansion plans and investments that enable our firm to function more efficiently … including significant investments in technology and communications infrastructure. During the past several years, we have added and grown new offices. We also continued to recruit talented lawyers from other firms and gradually increased the size of our summer associate class. Indeed, over the course of just the past few months, we’ve added nine new associate attorneys to our Orange County office, including both new law school graduates and experienced lawyers who join us from other respected law firms and judicial clerkships.
One big advantage we have enjoyed through these difficult times is that our firm has no debt and finances its operations entirely from current revenue and the capital invested by our partners.
John Cannon
Stradling Yocca Carlson & Rauth, shareholder, chair of litigation department
The firm has always been managed to be lean, efficient and flexible. We do not carry excess overhead or office space, and pay keen attention to our expenses. One of the benefits of doing so is that we avoid major changes to our model in reaction to fluctuations in the economy. Our platform is unique and has given us a competitive advantage in the market for our services. One of the reasons we connect and relate so well with our clients is that our own business philosophy often mirrors theirs; that is, be excellent at what you do and efficient in how you deliver your products and services.
Our model has allowed us to have one of our best years in 2012 and to make material investments in the future of the firm. We continue to expand our litigation, intellectual property, corporate and securities, and our public law practices. We recently added nine lateral attorneys—six at the shareholder level—and elevated another six associates to shareholder. Uncertainties in the economy have not caused the firm to adjust its model or downsize. To the contrary, we have taken the opportunity in the legal market to improve the firm’s position going forward.
