When attorneys at larger law firms work on legal matters, there is much rigidity in how they approach the representation. For instance, the bigger the firm, the larger the fees that are charged, and there is oftentimes less flexibility with fee arrangements at bigger shops. In addition, since larger firms usually assign associates to work on many of the tasks involved with a matter, there may be some separation between clients and the attorneys working on legal matters at bigger firms. On the other hand, attorneys who work at smaller shops are much more flexible with how they can structure a representation, and this can psyche out adversaries who aren’t used to doing business this way.
I have worked at firms of all sizes throughout my career, and I opened my own shop in March. I partnered up with my brother a few months ago, but I’m still basically able to call all of the shots related to the matters I handle. This includes not only legal strategies and the legal work completed on my matters, but all of the administrative issues that involve my clients as well. I have much flexibility about how to structure fee arrangements, how much work to devote to a matter, and pretty much everything about how our firm provides legal representation. This flexibility can be used to great effect when negotiating settlements and dealing with adversaries.
For instance, shortly after starting my firm, I represented a client who I had known for years. I knew that extended litigation would not benefit any of the parties, since many smaller disputes are best resolved without running the meter on attorneys’ fees. For many matters, the only people who benefit from extended litigation are the lawyers who can run up their legal bills.
My adversary tried to use the threat of legal fees to his advantage when negotiating a settlement. He asserted that since my client was a smaller fish than his, my client would be hurt more by paying the additional legal fees that came with extended litigation. The threat of legal fees piling up is a common tactic used to convince lawyers and their clients that it is better to settle now than extensively litigate a case.
However, I told my adversary that I had complete control of the amount of legal fees charged in a matter, and I could agree to any fee arrangement with my client. Indeed, this client was very close to me, and if I wanted to, I could propose a fee cap, a flat fee arrangement, or otherwise make it practical for my client to go the distance in the litigation. My adversary was extremely freaked out by this proposition, since I was breaking the cardinal rule of litigation that more time spent litigating a case meant more legal costs and hardship. We ended up settling the matter on pretty favorable terms for my client shortly thereafter, and my flexibility with fee arrangements took some of the wind out of my adversary’s sails.
Of course, every attorney has to earn a living, and I’m not suggesting that attorneys do work pro bono to get an edge over their adversaries. However, attorneys who work at smaller firms have the flexibility to structure fee arrangements to make it easier for their clients to go the distance in litigation. This can really psyche out adversaries who are charging hourly rates to their own clients.
Recently, I had another matter where small-firm flexibility helped me counter the threats made by an adversary. While engaging in settlement discussions, my adversary kept talking about the trial in the action and what types of evidence he hoped to introduce at trial. My adversary told me about all of the trial experience he had, and suggested that if this case went to trial, not only would he win, but my client would have to spend significant amounts of money on attorneys’ fees and costs. This attorney was evidently trying to scare me about taking the case to trial, since he rightly assumed that I had less trial experience than him.
However, I told my adversary that I would be thrilled if the case went to trial, since it would be a great learning experience. I even told my adversary that he could “take me to school” during trial, and maybe he could show me a few things that could be useful to me in future trials. I said offhand that maybe I would do the trial for a capped rate just for the experience, and since I was running my own shop, I had the flexibility to make such a statement. My adversary seemed freaked out by my statements, and backed off his aggressive position immediately. By using small-firm flexibility, I was able to psyche out my adversary by breaking another cardinal rule of litigation that trials are costly and should be avoided whenever necessary.
In the end, larger law firms are often rigid with how they structure representations, since they are usually limited in the fee arrangements they offer and how they approach legal services. However, the flexibility available at smaller law firms can often make the difference in resolving a case in a client’s favor.
Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.