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Why the Cloudy Economic Outlook May Have a Silver Lining for Boutiques

What’s Happening:

 

The Q2 economic dip and continued COVID-19 pandemic is expected to lessen demand for law firms and will be followed by a structural shift in demand away from traditional outside counsel, according to a recent commentary by Hugh A. Simons and Joe Blackwood.

 

Both predict a Q1 to Q2 2020 drop in hours of 10-% to 15%, and say this will delay Big Law regaining its pre-COVID level of demand until 2026. They also make the stunning prediction that "Mid Law" (defined in the article as "a consistent group of 34 Am Law Second Hundred and mid-sized firms") may never fully recover.

 

But what about smaller boutique law firms? Some see themselves as well-positioned to weather the economic storm⁠—and maybe even flourish during it.

 

What It Means For You (If You're at a Boutique):

 

Agility is your greatest asset.

 

George H. Lugrin IV, shareholder, director and president of Hall Maines Lugrin, an energy-focused boutique with offices in Houston and London, says his firm views these difficult times as an opportunity.

 

“The way we have analyzed it, as a small firm we have the flexibility to quickly adapt to changing client needs and market conditions,” Lugrin said.

 

“For example, we anticipate an uptick in litigation arising from bankruptcies and restructurings. We’re a litigation boutique, but we have been liaising with a bankruptcy boutique to work with us on bankruptcy matters.”

 

“In the past, we’ve made similar arrangements with IP lawyers,” he added. “We view our firm’s litigation skill set as adaptable to different types of litigation.”

 

“We have been aggressive in making that point to our clients and to potential clients who are interested in our model of service,” he explained. “Our firm is not concerned about Q2 2020, although we recognize that Q3 and Q4 will be challenging for many local companies.”

 

What You Should Do:

 

Per Lugrin:

 

• Implement creative rate structures such as “fixed legal spend collars” with adjustments if outside the “spend collar” once the economy recovers and clients are in a better financial position. "In the meantime, we are investing in each other."
  

 

• Aggressively work or seek to work with opposing counsel and the court system to resolve matters without jury trials or with jury trials at public facilities capable of safely accommodating trials.

 

• Broaden your approach to legal work instead of staying in your traditional comfort zone. "For us, that means taking on a wider variety of commercial disputes and providing our deep energy industry knowledge to clients who are contemplating reorganization and even bankruptcy."

 

Questions You Should Be Asking :

 

Per Lugrin:

 

• Do you have a plan and is it flexible? “Any lawyer in private practice will tell you that you always wonder where that next case is coming from. Having said that, we are assessing very carefully what our firm practice will look like in 3 months, 6 months, 1 year if the current situation persists? In real time, we are adapting, be it greater and better use of trial and videoconferencing technology, or how we are moving cases along to enhance the prospects for resolutions. Every firm should be asking itself: How should we adjust now if next summer we’re still in the same position as now? And, what will change post-COVID-19? Finally, I believe you need to address these issues now, don’t wait.”

 

Where Civil Rights Cases Are Won

The infographic below, compiled using the VerdictSearch database, shows win percentages for civil-rights plaintiffs in jury trials conducted in 10 major cities: Atlanta, Baltimore, Boston, Chicago, Dallas, Detroit, Houston, Los Angeles, New York and Philadelphia. The combined win percentage of civil-rights plaintiffs in those venues is 49.4 percent, as reflected in the yellow slice of the “Major Cities” pie chart. The chart’s blue slice reflects defense verdicts in those cases. The “Rest of State” pie chart depicts the win-loss percentages in all other courts in the corresponding 10 states. In those obviously less-urban areas, civil-rights plaintiffs win merely 42.4 percent of the time, about a 14 percent drop from the urban settings. Of course, venue shopping is often not possible for these types of cases, but the numbers are nevertheless useful for calculating success at trial. To check a specific venue, use the search platform at VerdictSearch.com.