In recent years, there has been a growing recognition by the wider community and the legal industry that when it comes to legal disputes, many small firms can operate effectively in the same space as much larger big-brand firms and at a fraction of the cost.
There appears to be a number of factors at play:
- technical advancements allowing small firms to better leverage their resources
- open access by small firms to many of the information resources relied upon by the bigger firms
- growing resistance by talented lawyers themselves to the strategies and practices used by big firms to extract more billable hours and unpaid overtime from employees
- increased pressure on large firms to raise fees to cover significant fixed costs and overheads; and
- increased client awareness of service value and willingness to shop around.
Who pays for a big firm’s flashy offices in fashionable streets, the high costs of brand marketing and the high costs of partner and employee salaries? The client does, of course.
The economics are easy enough to understand. The primary business metric and performance indicator for most big brand firms is that of employee and partner billable hours. Because of high overheads, to make a profit in an inflationary economic system, big firms are under pressure to increase not only the billable hours charged overall, but also the billable hours charged per client, either per matter or on volume. This can lead to complaints of “churning” and overcharging and result in increased scepticism by clients as to whether they are getting value for money.
Of course, one advantage of larger firms is that when it comes to large corporate clients, they can offer some economies of scale that smaller firms cannot compete with. For example, a large brand firm representing a national bank can provide its client with a one-stop-shop for litigating all of its consumer disputes nationwide. However, in those situations, the firm may be reliant on volume to fuel profitability, with individual matters themselves being in danger of being pushed onto junior lawyers supervised by senior lawyers who themselves are too busy meeting their own billable hour targets.
In many cases, small firms with good systems and competent lawyers can have distinct advantages over larger firms, and can be in a better position to offer value for money. For example:
- By having lower overheads, smaller firms often have greater flexibility in pricing, and can focus the services provided on what is needed in a particular case, rather than what billable hours need to be generated to meet a performance target;
- By taking on individual matters (large or small) for clients rather than taking on process driven volume work, smaller firms are able to give the matters in their care proper individual attention, and to be more flexible in their approach towards advancing their client’s interests and resolving disputes in a cost-effective manner;
- By providing personalised services to its clients, the conduct of the small firm can offer greater transparency than in the case of large volume matters or large multifaceted matters where the existence of unjustified billing, mistakes, and/or poor legal work is difficult to uncover.
There can be little doubt that small firms can and do operate effectively in opposition to clients represented by large brand law firms. For example, we have acted in commercial litigation matters involving the following opposition law firms:
- in a contested application hearing in which Norton Rose Fulbright were the opposing solicitors, we successfully set aside a default judgment entered against our client on the basis that the statement of claim prepared by HWL Ebsworth Lawyers failed to disclose a cause of action. Interstate bankruptcy proceedings against our client were consequently withdrawn.
- Mills Oakley are the opposition solicitors in a dispute which involved a hostile winding up application brought on short notice against our client company by two of its former directors. The matter has now just settled, our client remains trading, and the applicant directors are no longer with the company.
- Piper Alderman were the opposition solicitors in a claim filed against our client in respect of a trade debt. After filing and serving the defence we prepared, we wrote to Piper Alderman and argued that their client’s claim had no real prospects of success, after which their client agreed to discontinue the proceeding and pay our clients costs.
- Lander & Rogers Lawyers are the opposition lawyers in a matter involving removal of a managing director by our client company and an unfair dismissal claim brought against it. Their client was removed from the company and has since been charged by police with multiple charges of fraud.
- We also represent clients in matters in which K&L Gates are the opposition lawyers in a trademark dispute and Carter Newell Lawyers are the opposition lawyers in an agency dispute.
- Barry Nilsson Lawyers who represented a large insurer on behalf of a professional advisory firm for negligence which ultimately settled.
The above firms are examples of well-known and reputable firms with big brands in the industry. But as with other professional service industries, businesses and consumers seeking professional services and expertise are increasingly questioning whether they are getting value for their money.
The pressure is no less on the smaller firms than the larger ones, however, we think that small firms with good systems and competent lawyers are in a unique position where they can provide services that offer greater value for money and greater transparency, at a better price.
There has been a growing recognition by the wider community and the legal industry that many small firms can operate effectively in the same space as much larger big-brand firms and at a fraction of the cost.
At Boss Lawyers, we have an excellent track record of successfully representing clients against opponents represented by larger, well branded and top tier firms.
If you find yourself in a legal dispute facing off against a company or individual represented by one of the big brand firms, contact the Boss Lawyers litigation team – we are ready to step in and assist you.