Needs Prompt Lateral Moves

December 1, 2006
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As one of the “last of the cottage industries,” law firms are beginning to make changes in order to meet the needs of their clients on a more global level.

While it was once common for attorneys to spend an entire career at the same firm, today, as the industry changes, attorneys are moving to larger regional and national firms.

Tracy Larsen, managing partner of Barnes & Thornburg, which got its start in Indiana and is one of the largest legal firms in the Midwest, said 22 years ago when he started practicing law, one firm represented a client for all its legal needs. Now, clients may shop around for each legal issue, seeking out the experience and expertise of the best firm for the job.

To make sure such discriminating clients’ needs are met, firms are hiring more experienced attorneys, sometimes from larger firms or from firms in larger markets. Larsen said it has become more difficult today for a smaller firm to gain the level of expertise that clients are demanding.

While Barnes & Thornburg is relatively new to West Michigan — Larsen was one of the founders of the Grand Rapids office in 2003 — its growing practice intentionally includes some of the area’s more experienced attorneys. Though the firm does occasionally hire attorneys straight out of law school, the majority of its members come from larger markets or have had substantial experience in other major Grand Rapids firms, Larsen said. Attorneys are recruited by the firm and also apply for positions on their own.

Larsen said what makes the firm attractive to potential members is the stature of its attorneys, their status as individuals and their economic worth.

“Most all of our partners came with significant books of business,” he said.

When attorneys look at joining Barnes & Thornburg, Larsen said, they see an opportunity to grow their practice and expand their expertise.

Larsen said the firm decided to come to Grand Rapids because of the nature of the city and its work ethic, the number of companies present, and the expertise of the attorneys in the city. The firm had been looking at the city as a possible location since 1992.

About half of the firm’s clients are national while the other half are within Michigan, Larsen said.

Barnes & Thornburg is able to keep its overhead costs down by having its offices mainly in lower-cost centers such as Grand Rapids and Indianapolis, rather than locating in larger cities, Larsen said. The work can be done in any city, using the telephone and technology such as video conferencing and other electronic communication.

“It’s very difficult to find certain expertise in every market,” he said, making it necessary to share resources between offices.

Larsen said Barnes & Thornburg hand-picks people who are leaders in their practice areas at other firms. Of the 20 attorneys at the Grand Rapids office, Larsen said, every one came from another firm, except one first-year attorney who had previous experience in another field.

He said switching firms used to be unheard of here.

“You almost never saw partners at big firms leave,” he said.

Higher expectations from clients are now prompting those moves, Larsen said.

The changes don’t stop at the attorney level, Larsen said, as mergers between firms are on the rise.

“The world is getting to be a much smaller place,” he said.

In spite of the large firms created by these mergers, Larsen said, he believes there is a place for firms of all sizes, comparing it to the need for both community banks and national banks.

Larsen said there are three tiers of attorneys at Barnes & Thornburg: partner, associate and counsel. Counsel may be an attorney who has more experience than an associate, but does not concentrate fully on practicing law. He or she may have a very narrow focus or even have another career.

“When hiring associates, we’ll look for future partners,” he said.

While some firms are adding experienced attorneys one-by-one, Varnum, Riddering, Schmidt and Howlett recently added an entire office.

Four attorneys from the former Muskegon firm Lague, Newman & Irish PC recently joined Varnum. Larry Burns, chairman of the health care practice group, said attorneys from smaller firms joining a larger one en masse is not unusual, especially if the smaller firm is dissolving.

“Their firm was a fairly small operation, and I think that they found some synergy in joining our office because of their breadth and the depth that we could provide to them as they serve their existing clients,” he said.

“It helps us by giving us the opportunity to serve all of their clients who we weren’t previously working with.”

Richard Lague, Todd Helle, William Newman and Charyn Hain brought their experience — and clients — to Varnum in September.

While each situation is unique, Burns said, when attorneys change firms in this manner, there is an attempt to allow both parties to gain from the move.

“Part of the process of establishing these new affiliates is to identify and respect the experience and the strong character and reputation the attorney has,” he said.

Though Larsen said he believes there is more movement of lawyers between firms than in the past, Burns said there has always been some, but the circumstances vary.

“I think there’s always a little bit of horizontal movement,” he said. “It varies from situation to situation. … Part of the process of establishing new affiliations is to identify and respect the experience and the strong character — respect what the attorney has.”

For the time being, the four Muskegon attorneys will remain in their old office under a new lease with Varnum. They are splitting their time between Muskegon and Grand Rapids.

“We have an office right now in Grand Haven,” Burns said. “We’re looking closely at Muskegon, and this gives us a great opportunity to do that. Sometimes it’s the right place at the right time.”

Burns said in his experience, it is easier to expand into a new market by working with attorneys who are already there and have established good relationships and contacts. With Lague, Helle, Newman and Hain joining Varnum, Burns said the opportunities are exciting.

“It really gives us a very strong health care law practice in West Michigan,” he said. “I’m excited to be working with them and I’m pleased with the way things have developed so far.”    LQX

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