Like most solos who compete with big firms, my sweet spot is my ability to offer potential clients exceptional value — high quality work, longstanding experience and industry contacts, a seamless experience through use of technology and an assurance that clients will always deal directly with me and not a low level flunky. Of course, that’s just my official pitch. I know that in most cases, what brings clients to my door to begin with is that I’m an affordable alternative to biglaw. Though I generally bill flat fees, I have an official hourly rate that is roughly 40 percent lower than a lawyer of comparable ability at a large firm.
Even though I can undercut big firms on price and value, that’s not to say that I discount competition from them. When it comes to attracting clients, large firms can out-resource and out-market me any day. For every e-book that I painstakingly produce, they can churn out an entire library; for every blog that I struggle to find time to update, they publish post after post without skipping a beat, for every $1000 industry conference that I save my pennies to attend, they can pay to sponsor a $10,000 cocktail party at the event. Yes, blogs and social media and the web level the playing field for solo and small firms, particularly early adopters – but large firms that recognize the power of these tools can still bulldoze the playing field right back to ground zero.
Even so, my own secret weapon against biglaw is that I’m nimble and engaged and still not too proud to hustle, or too egotistical to think that I don’t have to. If a given practice area is saturated, well so what? I’ll just create a new one. I’ve done it before with ocean energy, with representation of landowners in federal court in eminent domain proceedings brought by pipelines and most recently, with social media, utilities and privacy and smart grid. And if I have to, I’ll do it again until the end of time or at least until I move on to another career.
Ultimately, what scares me more than competition from traditional big firms is competition from Axiom Legal. Earlier innovations such like virtual law firms – think Virtual Law Partners or FSBLegal– those never bothered me as much because in many ways, my practice mirrors those slimmed down, efficient models of big firm practice. But Axiom is different.
Billed as a “new interpretation” of a law firm, Axiom is best described as a type of high-end placement agency. Axiom hires experienced lawyers with ten years of work experience and often more and dispatches them in-house on temporary assignment where they handle fairly routine, but complex legal matters for corporate clients – compliance, litigation, and transactional. At rates like $130/hour for regulatory compliance matters or $150 an hour for litigation, there’s simply no way that I – or any solos I know for that matter – can compete. Maybe Axiom doesn’t have the ability to identify new practice areas, but once I’ve developed them, Axiom can swoop in and take over the work for less than I could.
Even if Axiom can’t make a play for my existing and target clients who may be too small for its clutches, Axiom impedes my ability to expand. Used to be common in the energy industry, and I suspect many other regulated industries, for large corporations to retain one or two solo lawyers in DC or other hubs for routine matters. In turn, those routine matters would create a steady stream of revenue that might occupy the one or two lawyers or perhaps a paralegal or associate nearly full time. That kind of steady, baseload work neutralizes the short-term cash flow issues that solo and small firm lawyers experience, thus allowing them to outsource more work and occasionally take on the kinds of high risk cases that can produce larger returns. During the boom days of the mid-1990s, much of this routine regulatory compliance and filing work was gobbled up by rapidly expanding and increasingly aggressive large firms; in down times, much of it has gone in house. Now, companies like Axiom offer an alternative.
Why can Axiom vie for corporate business when solos and small firms can’t? Several reasons. For starters, many large companies are justifiably concerned about a solo or small firm’s reliability. What happens if you get overloaded? What if you take a vacation…or die? These are commonly asked, real-world questions. Even with my ability to put together a “team” line up comprised of other well qualified lawyers and lobbyists, the team approach doesn’t always give large clients the same comfort as well a large, multi-leveled company with several layers of back-up takes over. In addition, because Axiom has enormous resources (and presumably, as a non-law firm, can also accept outside investment), it can afford high end technology, legal research tools and other resources, not to mention benefit from economies of scale.
Axiom also has advantages on the marketing side of the equation. With former biglaw and corporate partners on their staff, Axiom can get through doors to decision makers both in the US and globally who won’t even return my phone calls. And with more than $100 million in revenues last year, that I can’t afford.
Axiom isn’t the only model of its ilk. As I said, while I don’t put virtual law firms like VLP in the same category there’s also Clearspire, a shop that opened here in Washington D.C. last year and is described in more detail here.
So here are some questions I throw out to all of the thought leaders and futurists who laud these new developments without offering any real analysis of what it all means for solos and small firms (the writing is pretty clearly on the wall for the impact to biglaw). Specifically, can big-law oriented solo and small firm lawyers compete with the Axioms and Clearspires for corporate work – and will these entities begin to encroach and offer services to smaller companies that solo and small firm lawyers typically handle? Are my concerns simply a product of paranoia, or is a bonafide competitor chasing me and my solo and small firm colleagues? I’d love to see some discussion of this question somewhere.