I read Jay Shepherd’s blog post announcing that he was shutting down Shepherd Law Group after 13 years of operation in order to pursue a consulting business he had created to help lawyers and others price their work. Jay, as almost everyone knows, is a committed value pricer. He has written about his pricing approach at length, and has contributed mightily to the discussion about the problems with hourly billing.
While I wish Jay well in his new endeavor, I am left to lament the waste of closing a firm that had established itself in a niche practice area (employment law) and had developed a great brand based on its approach to pricing.
Jay’s decision to simply close the doors of Shepherd Law Group is not unique, and Jay likely considered a number of options before choosing the course he took. But the news of his decision invites a discussion of what it is that lawyers build when then start or join a small law firm. I would put the question this way: Are you building a vehicle to deliver the services you provide that is no longer relevant when you decide to no longer provide the service? Or are you building a brand that delivers value regardless of who is in the driver’s seat? Apple, for example, has built a brand that is bigger than Steve Jobs, just as Microsoft became bigger than Bill Gates. In contrast, David Maister (author of The Trusted Advisor and many other books) built a brand based solely on David Maister, and when David decided to retire, there was no residual brand, no residual operation and no residual value.
When my partners and I chose to name our firm Valorem Law Group, we deliberately chose a name that would allow us to build value in a brand, rather than creating a firm that was simply a vehicle to deliver our personal legal services. We believe Valorem has certain values, a certain way of doing business and an approach that attracts clients. We price outcomes that our clients seek, bring a healthy dose of creativity to achieving those objectives, and more. These values and approaches guide everything from hiring to delivery of services. When I stop practicing (based on currently anticipated college tuition payments, this will be approximately 2048), my hope is that my ownership interest in the brand has value to someone else who will pay to acquire that stake. Maybe by then, non-lawyers will be able to invest, but even if not, I hope others in the firm will want to own that stake.
In the end, maybe our approach is for naught and we simply do what Jay did and close the doors. I hope not. We won’t know if our approach will work out for the better until we reach the point where one of the owners chooses to stop practicing—and I hope that is many years away. But the issue of what you are building is one you should think about when you begin your investment, rather than at the end of the road.
Patrick Lamb is a founding member of Valorem Law Group, a litigation firm representing business interests. Valorem helps clients solve their business disputes and coping with pressures to reduce legal spend using nontraditional approaches, including use of nonhourly fee structures, coordination with LPOs or contract lawyers, joint-venturing with other firms and implementation of project management tools to handle lawsuits or portfolios of litigation.
Pat is the author of the the recently published book Alternative Fee Arrangements: Value Fees and the Changing Legal Market. He also blogs at In Search Of Perfect Client Service.