Growing Midsize Firm Pays Big Bucks, Targets 'Core Industries'
As a number of BigLaw firms have struggled over the past year to deal with the global economic downturn, one of their midsize competitors has been enjoying record revenue and expanding in selected markets.
Loeb & Loeb, a five-office national firm with some 300 lawyers on its attorney roster, anticipates both a larger headcount and a bigger footprint as it continues with a program of targeted growth in identified “core industries,” says David Schaefer. He serves as managing partner of the firm’s New York office and its national practice management chair.
In the near future, the firm, which got its start in Los Angeles a century or so ago but now has its largest office in New York, expects the most expansion in its newest offices in Chicago and Washington, D.C., he tells the ABA Journal. They opened their doors five years ago and late last year, respectively, and should be “considerably larger in the next three to five years.”
A small satellite office in Nashville, Tenn., was set up about 18 years ago to cater to clients in the country music industry, and it is expected to stay at roughly half a dozen lawyers.
Luck has been one factor in Loeb & Loeb’s successful business equation, Schaefer readily admits. The firm, fortuitously, has on its client list companies such as JPMorgan Chase that have done relatively well during the global recession. “If our main clients would have been the companies that failed, it would have been a less-than-stellar year,” he says.
However, he also credits a strategic growth plan that identifies key industries Loeb would like to serve and develops top teams with specific legal—and business—expertise to address their needs.
“The strategy has been to find the industries that we can be really good in that don’t require thousands of lawyers in dozens of cities and cater to those clients,” Schaefer explains. Seven or eight years ago, for instance, the firm honed in on financial services, media and entertainment and real estate as target areas for growth. More recent additions to its practice portfolio include new media and technology and a Washington, D.C.-based energy group.
“We’re not trying to be all things to all clients. We’re picking the industries, and we’re picking our legal expertise based on those industries. … If you’re in our sweet spot, you won’t find anybody better,” he says. “But that doesn’t mean we can do everything.”
Although ready to provide standard legal services when called upon by clients to do so, the firm’s attorneys don’t simply wait for the phone to ring or urgent e-mails to light up their BlackBerries, according to Schaefer. Instead, they talk to clients about their businesses, helping them anticipate and address legal issues and corporate concerns before they become major problems.
When the Lehman Brothers investment bank failed about 15 months ago, for example, Loeb & Loeb lawyers called up clients and asked “Do you have business relationships with Lehman? We know that there are some things that you need to do … let’s be proactive,” Schaefer says.
The firm made some layoffs in 2008 as it “took a closer look at some of the practice areas that were being immediately affected” by the economic downturn, he says, and froze salaries because of the economic uncertainty. However, 2008 was a record-breaking year for the firm financially, he says, and 2009, which officially ends, from a fiscal standpoint, at the end of January, should be close to the same level.
“We’re having a really good year,” Schaefer says of 2009, “much better than expected,” crediting the firm’s success to “a combination of being lucky and being good.”
Like its BigLaw competitors, Loeb & Loeb pays first-year associates a starting salary of $160,000 annually. And, although its merit-based advancement system features “a little bit more compression” between the low and high ends of the associate pay scale, he says, merit bonuses paid to top-performing attorneys can make up the difference.
“We have associates that will get $60,000, $70,000, $80,000 bonuses,” Schaefer says, both for the 2008 fiscal year and the 2009 fiscal year, although others in the same class might get only $10,000.
ABAJournal.com: “Loeb & Loeb Lures Morgan Lewis Partner, an Outsourcing Expert, in Latest Expansion Effort”
Above the Law: “Nationwide Layoff Watch: Loeb & Loeb Layoffs Round 2”
Blog of Legal Times: “Loeb & Loeb Opening D.C. Office”