Midsize Firms Say Bigger Isn't Better
It’s not always easy to stay the course as a midsize Chicago law firm. Some major corporate clients prefer to work with large law firms, and economies of scale that benefit the city’s biggest legal shops elude those with a comparatively small attorney roster of, say, 200 to 500. Meanwhile, a number of big law firms from out-of-town keep a close eye on Chicago, looking for potential midsize firm merger partners to establish a presence there.
But many nonetheless say that midsize is the right size, according to the National Law Journal. Among them: Chapman and Cutler; Hinshaw & Culbertson; Schiff Hardin; and Wildman, Harrold, Allen & Dixon.
Staying relatively small compared to big-firm behemoths with attorney rosters topping 1,000—or, in a few cases, 2,000—can be a challenge: “We have some very strong firms here that fiercely want to remain independent,” says Dan Bishop, who heads Citibank’s Midwestern law firm lending program. However, that can pose financial issues, as increases in associate salaries and technology expenses outpace income growth, he says. “Expenses are rising faster than revenue, so a lot of the midsized firms are being squeezed.”
Nonetheless, for midsize firms that know their market, this is a good niche, says Bill Roberts, the managing partner of Hinshaw & Culbertson. Originally known for its expertise in representing insurance companies and related clients, the firm has emphasized a more general business practice in recent years. It now sees its future focus as serving the needs of midsize corporate clients such as ServiceMaster Co., he says.
Although the firm would consider a merger, if the right law firm marriage partner made a proposal, “the partners are pretty happy with the firm the way we are now,” Roberts tells the National Law Journal. Meanwhile, General Motors can’t be on every law firm’s client list, and midsize companies likely will be better-served by midsize firms, he continues. “There are lots and lots and lots of midlevel entities who really can’t afford, candidly, to have the top-of-the-line boutique firms doing their specialty work.”