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How to Successfully Launch a Boutique After Big Law

Sept. 18, 2015, 7:34 PM

Editor’s Note: The authors of this article are partners at Shapiro Arato LLP, a litigation boutique in New York City. They were formerly partners, respectively, at Gibson Dunn & Crutcher and Latham & Watkins.

By Cynthia Arato and Alexandra Shapiro

Launching your own law firm presents many daunting challenges as the legal marketplace becomes increasingly competitive. It has been close to seven years since we left partnerships at large international law firms to start our litigation boutique, Shapiro Arato LLP. With that experience under our belt, we have a few thoughts about how a boutique can succeed and position itself to handle significant and high-stakes litigation.

Leaving Big Law to launch a boutique firm in New York may seem like a risky proposition, particularly in our case, as we launched our firm in January 2009 in the midst of the financial crisis. For us, however, the time was right. Although we were at great firms (Latham & Watkins and Gibson Dunn), we sometimes lost opportunities to handle interesting cases because of firm conflicts and the inability to be flexible about rates. In addition, trends in the legal marketplace at the time supported establishing a premier litigation boutique that handled significant cases for sophisticated clients, such as the demand for flexible fee structures; clients’ growing resistance to paying high hourly rates for junior associates’ work; preference for lean staffing and more hands-on work from partners; and the use of contract lawyers and technology tools to manage document discovery.

Since we founded the firm, it has grown and become an established presence in the New York litigation market. We have had a string of high-profile successes, most recently overturning the conviction of David Parse in one of the largest criminal tax fraud cases brought in the Second Circuit. Here are some tips to help you succeed too.

Go for the bigger cases. Even large firms now routinely use contract lawyers and technology tools to manage voluminous discovery. We’re not suggesting you pitch a two-man operation for a large product liability class action over multiple districts. But don’t be shy about your ability to use these tools to handle cases that, on first blush, seem “too big” and focus on what you bring to the table: hands-on work from an experienced, skilled partner.

Innovate. Running our own firm allows us to be flexible and to respond rapidly to client needs. We often implement creative billing arrangements, and we beta-tested a new litigation management software system that we now regularly use.

Open with a base of business. Be realistic about your existing business relationships and your current workload. The best time to open your doors is when you have existing cases that can come with you to your new firm. Are you the sole or only active partner on a number of your cases? Are those cases “small” on the Big Law scale? They are likely to move with you and can help anchor your firm’s work.

Always think about business development. But do more than the typical speaking engagements/publishing articles/having lunch. Take new matters that may appear too small; they can lead to bigger cases down the road. Take on a pro bono case with an interesting or high profile issue, to establish or solidify your expertise.

Hire the best lawyers, not to fill short-term needs. One of the biggest benefits of litigating at a boutique is working with the same group of lawyers, on a daily basis, as a team, across all of our cases. But that only works well if you make the right hire. Take your time during the interview process; ask probing questions; make sure to include existing associates; and don’t hire only for immediate needs. Our first two hires were in the middle of their federal clerkships and could not start for several months. So we found a work-around using contract lawyers in the interim, rather than hiring a second or third choice. And, in the other direction, keep your eyes open for the truly great candidate and hire him or her even if you aren’t actively looking and don’t “need” anyone at that exact moment in time.