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How Small and Mid-Size Law Firms Are Serving Today’s Market

South Florida’s legal landscape includes top law firms of all sizes, from national and international giants to sole practitioners. Each type of firm — large, mid-size or small — faces its own market challenges and opportunities just as top attorneys enjoy practicing in different firm environments. In this feature, South Florida Legal Guide focuses on how small and mid-size firms (two to 25 partners) are serving today’s market. To gain their perspective, we interviewed managing partners at eleven firms about their challenges, opportunities and growth strategies. Here are their responses.

Our Questions

  • What are the general challenges facing smaller law firms in South Florida?
  • What competitive advantage do smaller firms have in the market?
  • Is it important to carve out a niche in order to compete with larger firms?
  • If so, which types of law and/or clientele do you focus on?
  • Please discuss your marketing program.
  • What are your plans for 2011-2012: will you be entering new fields of law, adding more partners and associates, etc.?
  • How often do you refer work to larger firms? And do they refer work to you?
  • What else would you like to mention about your firm or the South Florida legal market in general?

Infante, Zumpano, Salazar & Miloch, LLC

Under the direction of Emil Infante and Carlos Zumpano, its co-founders, Infante, Zumpano, Salazar & Miloch, LLC has grown rapidly since its founding in 2005. “One of the challenges facing smaller firms is lack of diversification,” says Zumpano. “Having different practice areas is particularly important during an economic downturn. Our strategy of diversification has allowed us to more than double in size.”

Today, the firm’s practice areas include bankruptcy, data, corporate transactions and litigation. Its 20 attorneys represent Fortune 500 companies, financial institutions, multinational companies and internationally known artists.

The minority-owned firm has offices in Coral Gables and Palm Beach and satellite offices in South and Central America as well as the Caribbean.

Infante says the firm has been able to attract experienced and knowledgeable attorneys who prefer to work for a smaller firm. One example is Luis Salazar, formerly with Greenberg Traurig, who leads the firm’s bankruptcy group. “We make a conscious effort to provide a better quality of life for our attorneys and our clients,” he says. “For instance, some of our clients will stop by here in the Gables for a cup of coffee. That’s the kind of thing that just doesn’t happen in a giant law firm.”

When launching a new practice area, Infante says the fastest way for a mid-size firm to get up to speed is to invest in an seasoned professional. “Starting from scratch can be difficult,” he adds. “Why re-invent the wheel, when you can bring in someone with big-firm experience.”

A decade ago, larger firms might have had an advantage in terms of resources devoted to research, but technology has leveled the playing field, according to Infante. “We have invested in our network, backup servers, copiers, wireless and VoIP phone systems,” he says. “It’s important for us to be on the cutting-edge of technology to provide efficient, user-friendly service.”

From a client service perspective, smaller firms can make quick decisions when matters warrant immediate attention, adds Zumpano. “We also get many referrals from larger firms when they face a conflict of interest,” he says. “Because we have fewer attorneys, we don’t have as many conflicts ourselves.”

For its first few years, the firm grew primarily from referrals from clients, friends and families, according to Infante. Since then, Infante Zumpano has hired a public relations professional, built an attractive website and is playing an active role in community organizations. “But we still nurture those relationships with clients and other attorneys,” says Zumpano, “because they are the key to growth.”

Looking ahead to the changing legal scene, Zumpano expects to see a pickup in corporate transactions in the next few years. “If the economic recovery continues, this will be a growth area for our firm,” he says. “We envision more mergers and acquisitions work and commercial transactions, as well as litigation.”

Brinkley Morgan

Philip Morgan, managing partner, Brinkley Morgan in Fort Lauderdale says law firms of all sizes face similar issues. “One of the challenges in South Florida is attracting good, quality legal work in a region that is home to few major corporations and has been hit hard by the real estate slump,” he says.

Other challenges shared by firms of all sizes including commanding fees that enable the firm and each of its attorneys to stay profitable, maintaining strong client relationships that result in additional work, and assuring that clients pay their bills in a timely manner, he adds.

Brinkley Morgan was founded in 1975 as a business law firm that also helps clients take care of their personal individual legal matters. “Our goal never has been to be the biggest firm in South Florida, but rather to be considered among the best,” Morgan says. Today the firm has approximately 20 attorneys whose practice areas include real estate, business litigation, intellectual property, corporate, employment, estate planning and tax.

In 2010, the firm decided to refresh its image with a shorter name and memorable brand. “Historically, law firms have had names that included all partners in the firm, which can become very long,” Morgan says, noting the prior name was Morgan, Solomon, Tatum, Stanley, Lunny & Gordon, LLP. “We wanted to reflect our success with a contemporary brand that would attract new attorneys while honoring the memory of Michael Brinkley, the firm’s founder.”

The firm’s rebranding and marketinginitiative consisted of a new logo, new website, redesigned and rewritten collateral materials. “In addition, we made a strong firm commitment to learn about new media platforms, including social media, and how we might include them in our marketing efforts,” Morgan says. “This is an ongoing process.” In another initiative, all attorneys were asked to identify organizations they care about and become more involved in the community if they had not been involved in the past.

The firm also opened a new office in Delray Beach to provide convenient service to Palm Beach County clients. “Our plans for growth in 2011-2012 include adding lateral hires in certain practice areas as well as adding new associates,” Morgan says. “We also are considering geographical expansion beyond the new office we recently opened in Delray Beach.”

By controlling the size of the firm, Brinkley Morgan can focus on delivering highly personalized service and business counseling. “One of the major advantages of small firms is the higher experience level of the attorneys who work on client matters, Morgan says. “Typically, top-level partners are intricately involved in client matters. The experience and skill levels of these partners are the same as partners in larger firms, but have chosen to work in the environment of a smaller firm.”

From a business perspective, smaller firms are also more nimble in responding to changing economic conditions, according to Morgan. “They have more flexibility with pricing that allows them to work cooperatively with clients at different stages of the development of the client’s business,” he says. “We also receive a number of referrals from other lawyers who look for us to provide the highest quality of legal representation.”

Gutter Chaves Josepher Rubin Forman Fleisher P.A.

Charles “Chuck” Rubin says the overall slowdown in business and real estate activity is a challenge for South Florida law firms of all sizes. “We are noticing more activities in these areas lately,” says Rubin, a taxation attorney and partner, Gutter Chaves Josepher Rubin Forman Fleisher P.A. “On the management side, we all face the issue of doing right by our employees in the face of increasing health insurance costs.”

The Boca Raton firm can trace its roots to 1986, although three of the partners have been working together since the early 1980s. Today, the firm consists of nine tax, probate, trust, and business attorneys. “We focus on those areas of law that protect and enhance individual, family and business wealth,” Rubin says. Those include planning to minimize U.S. and international taxes, estate planning, trust and estate litigation and administration, business structuring and transactions, tax disputes, and creditor protection planning. A typical client is a high-net-worth family or individual that runs a business or has previously cashed out, as well as private and publicly traded businesses that need help with tax issues.

Asked whether it is important for a smaller firm to have a niche in order to compete with larger firms, Rubin says, “Absolutely. We desire high quality and challenging legal work. To be able to capture business that often flows to the larger firms, we specialize in a few areas. Then, when clients and referral sources are looking for our counsel, our firm gets recommended for its expertise and experience.”

Rubin says smaller firms do have some competitive advantages in the South Florida market.. First, smaller firms can focusing on limited practice areas, and thus develop a reputation as the top firm in those areas. “Another assets is flexibility,” he adds. “Small shops can shift and adapt easily as the marketplace and client needs demand, without restrictive management structures or high overhead.” Gutter Chaves often gets referrals from larger firms and sends them business, Rubin adds.

To enhance the firm’s visibility in the market, Gutter Chaves’ attorneys speak at professional and bar events, and publish a regular client newsletter. Rubin himself has published a tax blog for six years now. “ We do not anticipate any major adjustments to the firm in 2011 or 2012,” he says. “We are dedicated to our principal practice areas.”

Bluestein and Wayne, P.A.

For more than 20 years, Bluestein and Wayne, P.A. has been counseling clients in family law matters. Led by co-founders Harold Bluestein and Barry Wayne, the Coral Gables firm established in 1989 now has five attorneys.

“The opportunities for smaller law firms in South Florida haven’t changed through the years,” says Wayne. “If you have a boutique practice and do quality work, clients will gravitate toward your firm.” For sustained success, Bluestein adds that a smaller firm needs to establish a reputation for being “go-to” professionals within a certain area of expertise. “If that’s the case, there will always be plenty of opportunities,” he says. “The challenge is to find creative ways to help your clients' in a constructive manner through changing economic circumstances.”

From the standpoint of marital law, that means recognizing that a divorcing couple’s assets may have lost value in recent years. Income streams may be smaller and it can take time to liquidate real estate assets in today’s market. “You have to analyze the options, looking at the advantages and disadvantages of different strategies, as well as the parties tolerance for market risk,” says Bluestein. “Even people with high net worth might be facing liquidity issues.”

In a divorce case, for instance, it might be better to hold a property until market conditions improve, if one of the parties has the ability to carry that asset. Or it might mean reviewing the value of that asset if the litigation process takes several months. “We take pride on our ability to analyze the economic components of our clients’ relationships and to explain them in everyday language,” Wayne says. “That helps them make better decisions since they understand what needs to be accomplished.”

Wayne says the firm gets a steady stream of referrals from larger law firms.“Generally, the large firms don’t hold themselves out as family and marital law specialists,” he says. “They refer clients to us for a divorce or a prenuptial agreement. In turn, we constantly refer our clients to corporate, tax or immigration attorneys. That reciprocity promotes our ability to get business.”

As for marketing, Bluestein and Wayne will continue to rely on referrals from clients, attorneys, accountants and other professionals. “We are happy to be a five person firm and be selective in the matters we take,” Bluestein says. “We enjoy that style of personalized practice much more than trying to become a high-volume firm.”

Heller Waldman P.L.
Glen Waldman enjoys working in a small firm setting. “It’s a wonderful environment to practice law,” says Waldman, founding shareholder, Heller Waldman P.L., a boutique firm in Coconut Grove. “The biggest challenge is overcoming the perception from large corporations that feel they need a big firm to handle their case. A small firm with the expertise and experience can do just as good a job — and the clients know exactly who will be working with them.”

The seven-attorney firm is focused on two practice groups. Waldman handles complex commercial litigation and arbitration, while partner Dan Heller leads estate and tax planning. The firm also handles probate litigation.

“Adding new practice areas can be dangerous to a smaller firm,” Waldman says. “You might be successful by bringing in attorneys with expertise in that area, but otherwise you risk becoming a jack of all trades and master of none.” Instead, Waldman said the firm will gradually add more attorneys in its chosen market segments over the next year or so. “We’re just looking for smart, measured growth,” he adds.

Waldman Heller does get referrals from larger firms in conflicts of interest situations or when attorneys are looking for certain types of expertise. “We also send clients to small and large firms that can provide high-quality service,” Waldman says.

Overhead is lower in a smaller firm, which has a great impact on profitability and sustainability, Waldman adds. “As for technology, it used to be that big firms had the advantage, but today that gap has been closed. Virtually all firms now have access to the same tools and solutions, regardless of size.” In addition, newer firms can actually have more advanced technology, since they are using a more recent platform without legacy issues.

In general, smaller firms are less likely to face conflict issues, and can respond more quickly to new business inquiries. “When someone needs immediate legal help, they don’t want to go through a long, drawn-out conflict check with a big firm’s committee and then wait for the retainer letter to be approved,” Waldman says. “Smaller firms can make quick determinations and have more flexibility in terms of fee arrangements. So, small firms can move faster, which is a big advantage in today’s market.”

Gaebe, Mullen, Antonelli & DiMatteo

In the highly competitive legal business, clients demand more from attorneys in less time. “This poses a challenge for smaller law firms to perform, so they must consider their focus carefully,” says Christienne Sherouse, partner in the Coral Gables office of Gaebe, Mullen, Antonelli & DiMatteo. “If you start small, always start with a niche.”

Since its founding in 1985, the firm has focused on commercial litigation. “We started with a niche — defending insurance companies in auto accidents and personal injury cases — and would do it again,” says partner Mark Antonelli. “We built from that niche, but did it carefully and strategically, representing U.S. corporations, multinationals, institutions and municipalities. As our experience in litigation has deepened, we have found ourselves in demand as business counselors, helping companies avoid litigation unless absolutely necessary.”

Now the firm has 19 lawyers, which puts it in the mid-sized category, he adds. “Small-tomidsized firms like ours are able to respond more quickly to clients’ changes and provide more value and bench strength,” Antonelli says. “ Smaller firms with staying power can also be more cohesive and approach clients as teams. Many of our staff, as well as our senior attorneys, have been with us since we opened in 1985.”

Now, the firm’s challenge is to expand its litigation and counseling work, says Sherouse. To do so, the firm is reaching out to the region’s corporate counsels, corporations and multinationals through educational sessions. Members of the firm are active in national invitation-only organizations and societies, such as the Defense Research Institute and the American Board of Trial Advocates (ABOTA). “We have conducted CLE seminars for attorneys and see great value in educating corporate clients,” she says.

In some non-litigation matters, Gaebe Mullen refers work to larger firms, and also partners with large firms in national litigation, such as the ValuJet case. Multinationals have referred work to the firm when seeking Florida counsel in both state and federal cases, says Sherouse.

In the past year, Gaebe Mullen has promoted two partners from within and added several associates. “We anticipate further expansion in this year and in 2012,” says Antonelli. “We are gradually shifting our emphasis more from insurance companies to corporations. We also expect our appellate work to grow in quality and quantity. We work hard to keep ahead of the latest trial and litigation technology to give our clients better service in less time.”

Zarco Einhorn Salkowski & Brito, P.A.

Robert Zarco believes that having a legal niche is critical to the success of a smaller law firm. “If you are not a large firm, you need to market yourself as a boutique with a concentration on a particular area of law,” says Zarco, founding partner, Zarco, Einhorn, Salkowski & Brito, P.A. in Miami. “If you want to survive and develop a name for yourself, specialization is an absolute necessity. Otherwise, you will attract only small companies. But if you have a specialty or a reputation in your field, you will have no problem getting clients anywhere in the world.”

Founded in 1991, Zarco Einhorn initially focused only on franchise law, and has gradually expanded to licensing, dealerships, distributorships and similar relationships with brands, marketers and manufacturers. The firm has achieved national recognition in the area of franchising by representing clients throughout the world. “We have grown the firm gradually by extending our core areas of practice,” he says. “I would be very cautious about adding a new niche.”

Currently, the 12-attorney firm handles a wide array of litigation for its clients with four trial teams, all headed by Zarco. “I want to be involved in all my cases, giving my best efforts to provide very personalized service,” he says. “I couldn’t do that if our firm grew to 30 or 40 lawyers.” In fact, Zarco says he is available to clients 24/7 — despite his wife’s complaints. Our firm’s motto is that the client always comes first,” he adds. “We truly value being problem-solvers for our clients,” he says.

Another positive attribute for smaller firms is continuity, Zarco adds. Longevity in terms of partners, associates and employees is important for generating referrals and maintaining long-term client relationships. “Because we are so specialized, we get work from everyone,” he says. “In turn, we make referrals to attorneys and firms where our client will also receive personal attention.”

In today’s market, Zarco says firms with 40 to 60 lawyers are often in a difficult spot in the market. They have higher overhead than a smaller firm, yet are still vulnerable to market changes that shift income. On the other hand, larger firms often have institutional clients who provide a stable source of income regardless of changing economic conditions.

“I believe that a 10- to 15-lawyer firm is the optimal size to serve the client,” he adds. “It also offers a familiar, congenial environment along with the financial rewards.”

Clark, Fountain, La Vista, Prather, Keen & Littky-Rubin

Finding the right people can be a big challenge for a smaller law firm. “When you have a niche practice like ours, it is challenging to find someone who possesses the necessary knowledge and skills at the outset,” says Mark W. Clark, partner, Clark, Fountain, La Vista, Prather, Keen & Littky-Rubin in West Palm Beach. “Because there are not many high-end personal injury firms that do what we do, we spend an extensive amount of time training new associates.”

Another challenge for Clark Fountain is the massive advertising by other personal injury firms. “Clients often select the firm based on TV commercials and radio spots, not necessarily because the firm is most qualified to handle their case,” Clark says. “Since it can be a challenge for clients to locate you, it is critical to spend advertising and marketing dollars wisely.”

With nine attorneys, the West Palm Beach firm specializes in complex — and often expensive — cases with catastrophic damages and those involving products liability. A large portion of the firm’s business comes from other lawyers looking for specialized representation for a client.

“Our marketing efforts are targeted to other attorneys to educate them about our capabilities and that we co-counsel on cases where the client can benefit from our core area of practice,”  Clark says. “Knowledgeable professionals are not moved by TV ads or catchy slogans. Attorneys care about the ability to handle cases and produce results.”

Clark Fountain is now in a growth mode, adding associates, paralegals and legal assistants. In the next year, firm will continue to focus on its core areas of catastrophic personal injury, products liability and medical malpractice, and also expand its contingency fee commercial litigation work. “We have the financial resources and relationships with the top experts in the field to go toe-to-toe against the country’s largest corporations,” Clark says. In general, a smaller firm can provide personalized attention to clients, and also adopt quickly to change, Clark says. Smaller firms also have lower overhead, allowing for contingent fee and other types of financial arrangements, in addition to hourly billing.

“Law is like medicine,” Clark says. “Becoming highly specialized is critical in order to differentiate yourself from others. The more specialized, and the more risky the case, the fewer attorneys who are willing and able to undertake the work. We thrive on the challenge and the reward of these complex cases.”

Harper Meyer Perez Hagen O’Connor Albert & Dribin LLP

When talking with prospective clients, George Harper likes to say his firm offers “big law — just with a small price.” After all, he says, the partners at Harper Meyer Perez Hagen O’Connor Albert & Dribin LLP all have experience at big firms but prefer the environment of a smaller firm without the overhead costs and distractions.

“It can be challenging for smaller firms to demonstrate to their potential clients that any loss in the perceived prestige of having ‘big law’ represent them, is more that made up for by receiving the same quality legal services, at a significantly lower cost,” says Harper, who is chairman of the 11-attorney Miami firm. “Also, it can be a much more meaningful statement in a smaller firm to say that the clients really do come first.”

On the other hand, a smaller firm, may not have a competitive advantage over the larger firms in a highly regulated and personnel intensive area such as securities regulation. “We do sometimes refer work to the larger firms, and they refer work to us,” Harper says. “When our clients are faced with something like large and complex litigation or a public offering that may need to be staffed by more attorneys than we have, or if the issue involves a specialized area beyond the scope of our experience and knowledge, we have always reached out to other firms, including the larger firms, to assist us.”

Founded in 2002, Harper Meyer is a full-service law firm, focusing on the commercial matters with a strong international practice. Harper says the firm’s marketing is largely done through word of mouth, and the biggest source of referrals are existing clients and other attorneys. In addition, the firm’s partners are often invited to speak at seminars and conferences in their fields. “We don’t have any present intention to expand in 2011- 2012,” he adds. “We are committed to the principle that growth for the sake of growth is a bad business model. But we have learned over the years that as the business environment around us changes, we need to change with it.”

That flexibility is another advantage of smaller firms, which can adopt to market trends more quickly than larger firms, Harper believes. For example, Harper Meyer for many years emphasized outbound transactions by U.S. institutions venturing into Latin America. “In recent years, we noticed that the tide was shifting in the other direction with many Latin American and European companies seeing Miami as the destination rather than the jumping-off point,” he says. We also noticed that general counsel were becoming more comfortable forging into Latin American and elsewhere without the need for an intermediary. That being the case, our firm brought on partners who could provide a U.S. and Florida perspective for our clients.”

Phillips, Cantor, & Shalek, P.A.

Gary S. Phillips likes to tell clients: “You don’t hire a firm, you hire a lawyer.” That helps put the issue of the law firm’s size at rest, and helping to create a level playing field. “Smaller firms typically require partner-level communications with the client,” adds Phillips, partner, Phillips, Cantor, & Shalek, P.A. in Hollywood. “That’s a big advantage in developing long-lasting client relationships. Also, clients can receive partner-level service at a lower cost than at a big firm.”

Phillips says the seven-attorney firm focuses on litigation (primarily commercial, construction, condominium, corporate and employment), probate, trusts and estates, and transactional work, including real estate, business law and institutional lending. “I do not believe that small firms need to limit themselves to one or two niches to compete with large firms,” he adds. “It goes back to my philosophy that a client hires an attorney and not a firm. While I may compete with attorneys for cases, I learned a long time ago that there is plenty of work available for good attorneys.”

Phillips, Cantor, & Shalek does not have a formal marketing program. Much of the firm’s work comes from referrals from clients and other attorneys. In fact, Phillips recently referred a large securities matter to one large firm and a major bankruptcy to another firm. “You would be amazed how far promptly returning phone calls and understanding your clients’ needs will take you,” Phillips adds. “We encourage our attorneys to get to know our clients and their businesses, including taking a tour of their offices or facilities to better understand how we can help them.”

In general, small and large law firms today face similar issues, Phillips says. “We all face the challenge of recruiting quality employees, and bringing in challenging cases as well as the bread and butter type clients,” he says. But Phillips does see a difference in management: Small firms make faster decisions on cases, salaries, expenses and daily operating issues, but lack some of the support staff such as word processing around the clock, copy and fax services and runners. However, small firms can easily outsource the support tasks when needed, he notes.

“Unless we find the perfect fit, we have no plans to expand during the next year,” Phillips says. “Our attorneys and staff spend a lot of time together and we treat each other like family. I would not want to disrupt our firm’s chemistry.”

Ver Ploeg & Lumpkin

Through the years, Brenton Ver Ploeg has seen large South Florida firms get squeezed out of the marketplace by their bigger and smaller competitors. High salaries, autocratic management and difficulty adopting to market changes are among the reasons. “Firms with many departments find it hard to keep everyone going when the business is down,” says Ver Ploeg, founder and managing shareholder at Ver Ploeg & Lumpkin in Miami. “But real estate lawyers, for instance, still have to eat and pay their mortgages regardless of the market.”

Smaller firms, Ver Ploeg says, have more focus, which provides the foundation for long-term growth, and more flexibility in their businesses and financial operations. “I’m all for focused practice areas,” he says.

Since opening its doors in 1995 as a classic niche practice, Ver Ploeg & Lumpkin has represented individual, corporate, and governmental policyholders, as well as bankruptcy trustees, in coverage and bad faith disputes with their insurance companies. Now, the firm has 23 attorneys with two more associates due to arrive this fall. “In just three years, we filled the 30th floor at Miami Tower— a space we once planned to solve our space needs for ten years — and are presently negotiating with building management to add offices on the 31st floor,” Ver Ploeg says.

The firm has expanded steadily in response to client demands, Ver Ploeg says, rather than setting internal growth targets. “We wouldn’t presume to speak for other firms, but this niche practice has been our passport to success,” he says. “Our size and focus has allowed us to build internal cooperation and camaraderie. We have no plans whatsoever to expand into other areas of practice.”

Ver Ploeg says the firm has traditionally underspent on marketing, but has bought time on National Public Radio (NPR) and hired a public relations firm. In addition, members of the firm are speakers at many statewide and national seminars focusing on insurance issues. “Probably 75 percent of our cases result from referrals from attorneys familiar with our focus,” Ver Ploeg adds. “We invariably refer out cases not within our field, though many of our partners have general commercial litigation backgrounds.”

Summing up the reasons for working at a smaller firm, Ver Ploeg points to the challenging cases, financial benefits and quality of work life. “I think many attorneys just enjoy working in a smaller firm,” he says. “And it’s something you can sustain over time.”

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