Big vs. Small Law Firms

In choosing which law firm to engage for your transactional matter, one threshold determination to make is whether to use a large or small firm, or something in between.  Needless to say, I’m not disinterested on this point.  The way I market my firm to potential clients inevitably portrays larger firms as not worth the cost – at least with respect to the types of matters I handle.  But I spent most of my career in big firms, and there are absolutely transactions that lend themselves to the resources that a “name” firm can bring to the table.

Big vs. Small Law Firms | Andrew Abramowitz

One obvious consideration is size of the transaction.  If the nature of the deal requires that 30 attorneys with various specialties are going to need to work on it, it’s theoretically possible for a solo attorney to assemble an ad hoc team, but it’s simpler for a large firm to divide up the responsibilities in-house, and the high cost of the resulting legal fees will be manageable in the context of the overall deal size.  In addition, there are some obscure legal sub-specialties where the only practitioners work in large firms, so there isn’t really a choice.

However, for most transactional matters – including most of the deals I worked on while at large firms – there’s nothing to be gained by choosing a large firm over a high quality small law firm, and a lot (of money) to be lost.  There is the obvious point that large firms tend to charge higher fees for their work and tend to be more resistant to alternative billing structures like fixed fees.  Just as important, in my view, is that the mystique associated with the size of the firm doesn’t bear up to scrutiny.  Say your company is raising $5 million in a private stock offering, and you engage a large firm that notes in its marketing pitch that it has 50 attorneys who have applicable securities background.  Despite this, there will likely be no more than a couple of corporate attorneys at the firm working on the deal, and they don’t absorb the collective knowledge of everyone else in their department by osmosis.  And if a whole bunch of attorneys do end up working on it, you will be justifiably upset by the resulting invoice.  Yes, big firm attorneys can informally ask their colleagues questions on a non-billable basis, but there’s nothing preventing a solo attorney from checking with a colleague in the same way, without divulging sensitive client information.

To sum up, for most transactional matters, hire the attorney, not the firm.  Don’t fall into the trap of letting status drive your choice.