DISCO tablecloth pattern

Discovery: The DISCO Blog

Innovate or Die: The Challenges of Being a Litigation Boutique

Posted by Kent Radford on Sep 24, 2015 1:31:14 PM

I’ve worked in large firms and litigation boutiques; I much preferred a boutique practice.  Little things like a relaxed dress code (jeans every day if I chose) and more intimate relationships with every employee, and bigger things like greater flexibility in case selection and the ability to take on cases with the potential for broad social impact but no real financial gain (think file-sharing litigation) made a boutique better for me. Most importantly, the boutique experience showed me how a person can innovate in the law quickly and with dramatic results.

Metallica Sued Napster

Overarching Challenges and the Opportunity

Litigation boutiques have drawbacks, of course, and face a unique set of challenges compared to other types of firms. Boutiques often experience problems around cash flow, limited resources (other than cash), and differentiation; but these (and similar) issues are often turned into great drivers for innovation.  In particular, with no large committees or bureaucracy to navigate, boutiques have a unique ability to smartly invest in and adopt new technology to solve the problems they face. 

Limited Cash Flow and Resources Call for Creative Solutions

Boutiques often face cash flow issues.  There is a certain security that comes with being backed by a firm with hundreds of millions of dollars in yearly revenue; it’s a dramatically different thing knowing that you might be the sole source of operating capital.  Absent principals with deep pockets, this potentially limited pool of capital can limit the firm in almost every aspect. 

A boutique’s cash flow is also impacted by the very nature of the specialized practice.  Revenue may be quite spiky, while larger full-service firms have the ability to smooth out cash flow during periods of slow litigation with increased demand in other counter-cyclical practice areas.

On a related note, litigation boutiques also have fewer resources to deploy on any given matter.  A large firm with hundreds of litigators can handle hundreds or thousands of cases at any given time.  A boutique may only be able to handle a few dozen cases across the entire firm.  Practically speaking, this means if a single case hits an intense discovery phase or requires dozens of document reviewers, a boutique will be stretched in ways that larger firms will not. 

Embrace Technology the Right Way

Be smart about adopting technology. With limited cash flow, choose and purchase only the essential software and hardware.  Programs to find primary case law, case management software, and productivity software come to mind. Don’t buy technology that is unnecessary, outdated, or can be provided by someone else more efficiently and less expensively. 

For example, do you really need to own a large printer/fax machine when you can electronically sign most documents and fax from your computer (assuming you don’t just email documents)?  Do you really need to invest in shared drives or servers when you can store the firm’s documents in Box or Dropbox for a fraction of the price?  Do you need to invest in in-house ediscovery systems when you can use a SaaS product like DISCO at a fraction of the cost and many times the speed of other software? 

Build a Positive Reputation

Litigation boutiques also face difficulty in differentiating themselves from other firms.  This makes business development difficult and may make landing “bet the company” cases challenging.  For most cases, in-house counsel have what I call a “justified by reputation” rule.  They look for a certain level of competence, but excellence beyond that standard is less important than reputation.  Understandably, in-house counsel also employ a “CYA” criterion for engaging outside counsel on high profile or high risk matters, because few are ever reprimanded for hiring the “best” firm, even if that firm ended up losing the case.

The obvious answer is to become the “best” I suppose, but even the best wasn’t always in that position; the question is how a boutique gets there. Initially, do whatever it takes to develop a brand.  You can use some well-known approaches to developing a reputation:

  • Take the early cases in your chosen area
  • Take socially meaningful cases in your area (even if they don’t pay) and doggedly pursue them
  • Avoid the temptation of taking anything that walks through the door just because it pays

These steps develop and demonstrate the firm’s expertise and help develop the firm’s brand.  Then use technology to let the world know what you are doing. Blog or use other social media to announce and discuss those wins, the socially meaningful cases, and your expertise.  You need to become the town crier, at least as it relates to your firm.  After all, the firm can never be the “best” if no one knows about it. 

Reputation? Check. Now What?

Once you jump to the “justified by reputation” group, how do you get in the “bet the company” group? Win.  A lot.  Seriously, you have to win.

I suggest innovating again to increase your chances of winning.  Given that the vast majority of time and money in litigation is spent doing discovery, use the best available technology for discovery and always keep an eye toward the future.  Technology that allows you to work smarter, not harder (like machine learning, software with a lawyer- focused user interface and design, and remote access to the documents from any location on any hardware) is constantly being developed and refined. 

The right ediscovery software can tremendously increase the likelihood of finding the relevant documents in a much shorter period of time.  With the evidence in hand, spending money on other phases of the case can increase a boutique’s chances of winning dramatically.

Topics: ediscovery, Legal Industry, Litigation Boutiques