To follow or not to follow?

Business clients face complex choices when lawyers change firms

Lisa Lowe

When a lawyer leaves a firm, whether to a new firm or to start an independent practice, clients can be faced with complex choices. For starters, clients often need to decide whether to move with their lawyer, or stay with the existing firm relationship.

In any case, clients will need to consider how to ensure that service quality is maintained and institutional knowledge is retained. The scope and complexity of a client’s legal needs is likely to be a primary consideration.

Scope & size

At Schwabe, Williamson & Wyatt, partner Lisa Lowe said, “It depends on the size of the client. If it’s a big client, their relationship may be with a number of different attorneys within the firm.”

Lowe continued, “Internally you may have different departments. You need to talk about what kind of legal work is being done. You should have a really good handle on what that looks like.”

Donald Russo, another partner at Schwabe, Willamson & Wyatt, agreed that many clients require a complex mix of legal services. That said, the legal team needs to provide a detailed plan to the customer as to how the firm will handle a transition, he noted.

“If the firm is smart, there’s already someone that the client relies on that can step in,” added Lowe. “You want to keep things as consistent before the departure as possible, especially in a case where there are a lot of different people handling different work. That kind of institutional memory is not something you’re going to get with a new firm.”

According to Joe Vance, a Miller Nash partner working out of the firm’s Vancouver office, there is “a significant number of clients that don’t really care about the firm, they care about the lawyer.” However, he noted that clients should assess any new situation in terms of efficiencies and resources.

“Many clients value the efficiencies that come by having all their work at one firm,” he said. “As far as billing, and regardless of what problem I have, there’s one place I can call. Whatever the problem or situation, there’s somebody there who can handle it.”

For clients, Vance suggested answering the following questions:

“For our company, is there value in those types of efficiencies? And… regarding the lawyer who’s providing me the services, is he at a law firm that has the resources to provide what we need?”

Change & opportunity

Vancouver attorney Steve Horenstein left Miller Nash earlier this year to start his own firm. Like Vance, Horenstein said that “the business of practicing law is changing dramatically” and “increasingly, clients hire lawyers, not firms.”

“Because of the recession, businesses had to change the way they were doing business, and they have a high expectation that law firms will do the same,” Horenstein noted.

These changes, he explained, range from the nature of services offered to the method of billing.

“Clients want their lawyer to really understand their business, and in many cases their industry, and be providing them content and keeping them up to date. Smart lawyers are doing that now.”

Moreover, according to Horenstein, clients “are looking for more certainty in their legal costs,” including alternatives to open-ended hourly billing.

Lowe said she sees many of the same trends.

“We are having discussions all the time about alternative billing methods, and we have those with all kinds of clients. Right now it’s a buyer’s market,” she said.

“If you’ve got a really good relationship with the person who left, now you’re sitting down with that lawyer to discuss how the new firm can handle your matters,” Lowe added. “How is the new firm going to provide you the same service that was provided from the old firm?”

In any event, Lowe said, changes at a law firm bring opportunities for clients.

“One of the things that happens when a lawyer leaves is that it’s an opportunity to review the service and what you’re paying for it,” she said.

Improving legal services through technology

Large clients worried about following their attorney to a smaller sized firm should understand how the use of technology and networking has changed the client services landscape, according to Horenstein.

“I was a little apprehensive about being able to use litigators and other specialists that are outside my firm, but I’ve found that it’s been really easy to build a network of those people,” he admitted. “We either refer to them or we affiliate with them. I get my choice of who I want to use and they are really pleased to do it.”

Technology is facilitating this type of cooperation, especially “the ability to share documents,” said Horenstein. It is also changing client expectations, as firms move to utilize technologies that are more client-centric than lawyer-centric. These include secure access to documents, and electronic billing and payment.

“Bottom line and reaction time” are becoming increasingly important, added Lowe. “The question of ‘how fast can you respond?’ is another issue. That’s the kind of thing I think you’re going to see being contemplated for those choosing a law firm.”

Beware conflicts

If clients follow a lawyer to a new firm, Russo cautions that the new firm must thoroughly evaluate existing relationships for possibility of conflicts.

“In the past year we’ve had several long-term practicing lawyers move to our firm from a couple different firms in the Portland-Seattle markets,” Russo explained. “Once you start that conversation with those attorneys, they also provide their client list. And now you’re running all kinds of conflict checks to make sure this can work. We run into issues routinely. So we say, ‘can we get around this with conflict waivers?’”

While in most cases this is possible, he said, clients should be active to ensure their new firm performs appropriate due diligence in this regard.