No Serfs: Another Pressure On Traditional Firms - Flight of talent

No Serfs: Another Pressure On Traditional Firms - Flight of talent

Frustrated by the demands of traditional firms, more attorneys are seriously exploring NewLaw as a viable financial, career and lifestyle alternative.

Washington healthcare lawyer [Harry Silver](http://www.potomaclaw.com/attorney-profiles/harry-r-silver/?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank) is a refugee from BigLaw.

After being a partner at firms such as Akin Gump and Patton Boggs, he joined The Potomac Law Group in 2013 as Counsel. Silver says that in the wake of the Great Recession, even as clients were demanding lower rates “the first $300,000 I billed them every year still went towards paying for the Oriental rugs and art collection.”

Along with offering lower fees, moving his practice to a NewLaw firm also provides a lifestyle benefit. Thanks to Wi-Fi, Skype and other technology, Silver now spends summers working from his place in the Blue Ridge Mountains, going into the District only for an occasional in-person client meeting, a court appearance or to attend a Nationals baseball game before returning to Washington full-time in the fall.

“My clients don’t care where I do the work, as long as it gets done,” says Silver, who was named by AmLaw Media as one of Washington’s best lawyers in 2013.

This flexibility combined with substantial cost savings for clients is changing – and challenging – how, where and under what circumstances someone practices law. And it no longer means taking a risk of sacrificing income for a better lifestyle.

As a result, it’s becoming easier to recruit high-powered attorneys, according to Donna Kent, Chief Operating Officer of [NewLAWu.s](http://www.newlawus.com/?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target="). “Before, the only alternative to life in a traditional law firm was going in-house or going solo. NewLaw firms like ours not only offer better income opportunities, we provide a genuine lifestyle option along with [more innovative technology](https://www.linkedin.com/pulse/emergence-newlaw-20-james-bliwas?trk=mp-author-card&lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank) that makes it easier to practice law.”

Kent adds that many lawyers are beginning to seriously question the high price they must pay to succeed in OldLaw: “Women, especially, often are penalized or made to feel they are worth less than men because they want to juggle their work and family obligations. The cost structure of law firms force some women out of the profession altogether.”

In other words, NewLaw firms such as Kent’s offer attorneys balance rather than forcing them to make personal sacrifices or even work until they drop dead.

Income Boost

Yet even lawyers seeking harmony between their professional and personal lives must eat.

With so much attention focusing recently on BigLaw and other firms upping [salaries of first year associates to $180,000](http://abovethelaw.com/2016/06/salary-wars-scorecard-which-firms-have-announced-raises/?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank), it’s easy to overlook the reality that such a lofty income takes a long time for many lawyers to achieve – if they ever do. Even still, some attorneys have hesitated moving to a NewLaw firm because of a fear that their income would decline as a result of leaving the security, image and brand of a large firm.

That objection is disappearing.

“We can demonstrate that an attorney with $300,000 or more of portable business will always do better with us than in a traditional firm,” insists Kent.

For example, she says that a lawyer who has been billing just $400,000 annually to files they control can see their income rise by a remarkable $100,000 – even after shelling out for office overhead, malpractice insurance, benefits and the self-employed tax differential. The greater their billings, the wider the gap.

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Moreover, the figures only represent payments for files a lawyer generates and works. They don’t include additional income generated from fee sharing or origination credits, nor a trailing fee on billings from other attorneys a lawyer might recruit into a firm. Likewise, it doesn’t factor in an attorney’s ability to gain additional work as a result of improved productivity and providing greater value.

Consequently, with NewLaw maturing whatever income risk that may have existed by moving from a traditional firm has largely evaporated.

Choices

Beyond dollars, NewLaw’s other key selling point is the flexibility the business model offers professionals.

In a [June 2016 article in Corporate Counsel](http://www.corpcounsel.com/id=1202760663523/Is-WorkLife-Balance-a-Hopeless-Goal-in-the-Legal-Profession-?kw=Is Work-Life Balance a Hopeless Goal in the Legal Profession?cn=20160623&pt=Daily Alert&src=EMC-Email&et=editorial&bu=Corporate Counsel&slreturn=20160523104616&lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank), Susan Smith Blakely writes about the difficulty women lawyers in particular face in trying to find a work-life balance in traditional firms.

“(M)any of the women who choose in-house practice do it as a default choice after law firm practice proves unsatisfactory in meeting their needs and career goals,” she states. “The challenge has less to do with gender than with culture and what has become a workaholic profession within a Workaholic America.”

The problem isn’t limited to women. I know three former senior associates in large firms who opted out of the partnership chase because they wanted more from life than clocking 2,000-plus hours a year. Two worked in large U.S. firms, the other in a sizeable Canadian firm.

Attorneys are questioning the price of succeeding in OldLaw.

“Life was insane,” one of them told me not long ago; he has a first class law degree and was a sixth year associate already generating some of his own files.

“I have a one year old and want to watch him grow up. A former colleague almost missed her daughter’s first dance recital because a partner wouldn’t let her leave early as a deal was falling apart,” he says ruefully. “That’s when I knew it was time to find another way to earn a living.”

He now teaches American history – his Ivy League undergraduate degree – at a private high school in a New York City suburb. He is sanguine about the career switch: “I have predicable hours and don’t work weekends. Best of all, our son knows who his dad is.”

The [life and lifestyle limitations](http://www.theglobeandmail.com/report-on-business/small-business/sb-money/why-so-many-young-lawyers-dislike-their-jobs/article29807625/?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank) of traditional law firms may be costing the profession part of its future as talented men and women like him opt for something different in their lives.

Empowering

The new model also offers better opportunities for lawyers to move into leadership positions faster, regardless of their seniority in a firm.

Despite paying lip service to helping their women lawyers, only 31 firms were cited this year by the [Women in Law Empowerment Forum](http://www.wilef.com/cert2.html?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank) for making serious strides to equalize gender roles, down from 44 in 2015. As [Above The Law put it](http://abovethelaw.com/2016/06/which-firms-offer-women-the-most-power-and-highest-pay-2016/?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank), “It’s more than a bit disheartening.”

This may explain why NewLaw firms have a growing list of lawyers seriously exploring the option they offer.

The appeal is likely to grow. According to Nicole Nohama Auerbach, founding partner of the [Valorem Law Group](http://www.valoremlaw.com/?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3BXxbWMFhqSg%2BCW4LUCp9dUA%3D%3D" Target=" Blank), “NewLaw offers so much potential for lawyers who want more than the old normal because they don’t find it rewarding or efficient any longer.”

With NewLaw attracting established, senior lawyers, it’s become more than just an annoying distraction to established firms or viewed as a resource for them to co-opt by signing deals to send along low-end files as a way of corralling a competitive threat.

“We’re speaking with serious attorneys, both women and men, who have serious practices,” states NewLAWu.s.’ Kent. “Now that the higher income opportunity is demonstrable, the appeal of NewLaw firms is huge because we also offer better leadership opportunities for professionals along with a happier personal life.”

What started as a phenomenon may now further disrupt a profession where many highly-educated, richly paid people often are still treated like serfs.

How do you think traditional law firms will meet the growing challenge from NewLaw? Or won’t they notice it? And, if money alone isn’t enough to prevent a brain drain, how will genuine culture change be accomplished?

Author

James Bliwas

I’ve spent my career working with law firms on marketing issues. I am managing director of Leaner Law Marketing and senior marketing communications strategist at Professional Services Marketing.

Toronto, Canada https://www.linkedin.com/in/james-bliwas/ James Bliwas

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