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The Honolulu Advertiser
Posted on: Monday, March 1, 2010

Lawyers at boutique firms find that smaller is better


By Carol J. Williams
Los Angeles Times

Hawaii news photo - The Honolulu Advertiser

Keith Elkins, shown, and his partner, Scott Kalt, run a boutique law firm in Los Angeles called Elkins, Kalt, Weintraub, Reuben and Gartside LLP.

MARK BOSTER | Los Angeles Times via MCT

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LOS ANGELES Back when feuding couples had equity in their homes and investments worth fighting over, Scott Sagaria made a good living as a divorce lawyer.

But the recession cut deep into his family law business, causing the San Jose, Calif., practitioner to redirect his talents. Now he makes a good living as a bankruptcy attorney.

Like solo and small boutique law practitioners across the country, Sagaria has been better able to adapt to a shifting legal landscape than Big Law firms that had to shed more than 4,600 lawyers nationwide last year.

In an inverse demonstration that size matters, small firms able to quickly reinvent themselves have benefited despite shrinking spending on legal services and a more demanding clientele.

"It's been easier for us in the sense that we were able to change focus pretty rapidly, to adapt to what work was available to us," Sagaria says of the practice, which he opened solo in 2001 and which now has seven other lawyers from San Diego to Portland, Ore.

They're open Saturdays. They offer payment plans in the place of up-front retainers. Decisions don't need to be run past a task force or partnership committee.

Boutiques are flourishing in the current economic climate because they deal on a more personal level with the legal consumer and they tailor services to individual needs, legal analysts say. Smaller firms also have less overhead and can be more flexible and affordable, they said.

"Clients perceive that they will get more efficient legal services and more bang for their buck in the context of a small, more agile firm," said Scott Kalt, a founding partner of an 11-lawyer practice that opened in January after breaking off from a Century City firm with 150 lawyers.

Melissa Wolfe and other legal recruiters say attorney placements over the last year were almost exclusively with small firms able to market the Big Law defectors' experience at more consumer-friendly prices.

"I liken it to the dot-com experience. Some of the big firms went overboard, charging upward of $700 an hour, and when the economy changed, their clients were no longer in a position to pay that," Wolfe said. "The rainmakers left and started their own firms. One told me he tells his clients, 'I'm not any dumber but now I'm $400 an hour less.' "

Employment law, bankruptcy, real estate and family law practice areas most affected by the recession have long been the preserve of small firms and solo practitioners, said Richard Hermann, who teaches a legal career management course at the online Concord Law School.

"A large firm is a bureaucracy. Trying to change things there is like turning around a battleship," Hermann said.

Changes in the legal market have lifted Little Law into the largest and fastest-growing sector of the legal community, said Laura Farber, a partner at a 23-lawyer firm in Pasadena and vice chair of the American Bar Association division that monitors trends among small firms.

The recession has noticeably accelerated the migration to Little Law, Farber said.

"At a small firm, it's a very dramatic difference," she said. "For those of us who have children, a spouse, other interests, it makes it much more fulfilling to practice in this kind of environment."