Smaller law firms offer a jet-set lifestyle. Bigger firms specialize in corporate, employment and real estate law. The overhead of a law firm typically runs 35 to 55 percent of revenue, which can make a small firm seem like a luxury. But you must consider all of these factors before deciding whether or not to join a big firm. Listed below are three pros and cons of each type of law firm. Here’s how to choose the right one for you.
Smaller law firms have a jet-setting lifestyle
Many small law firms boast of their jet-setting lifestyle. While it is true that big law firms offer better salaries and work-life balance, smaller firms offer more perks. These benefits include direct contact with clients, increased negotiating power, and early opportunities to tackle important work. Many small law firms cater to the needs of younger attorneys, who are increasingly valuing work-life balance and better salaries. Additionally, many young attorneys are now parents, and their perks are often more attractive to them.
For example, Crowell & Moring recently started hosting wine parties in its New York office. One associate requested Spanish wines, and the firm delivered. In addition to wine, the firm offers training programs to its associates. Some boutique law firms even match the standard bonus scale of Big Law’s elite. They are also able to pigeonhole their associates into a particular practice area.
Large firms specialize in corporate, employment, and real estate law
Large law firms are often referred to as “full-service” firms, and they are often composed of dozens of attorneys in multiple locations and states. These firms focus on a wide range of legal areas, from real estate to corporate and employment law. They also tend to have large legal departments and other support staff. However, the firm’s most notable practice areas are real estate, tax, and corporate.
Big law firms
Big law firms are capable of handling most legal matters. These types of law firms handle everything from business transactions to large-scale litigation, and often represent high-profile clients. Large law firms usually represent entities that are involved in multiple practice areas, and they may also represent individuals with issues spanning multiple practice areas. Some law firms are further separated into sub-specialties, such as litigation or transactional law. While the latter deals with representation in court, transactional law firms handle heavy paperwork.
Law firms: Career opportunities for advancement
Career opportunities at large law firms are plentiful, including opportunities for advancement. While billable hours are high, the prestige associated with these firms can be valuable to an attorney’s resume. Many large law firms are also known for offering their associates specialized training and advancement opportunities. In addition to offering excellent career advancement, large law firms also help junior attorneys outside the firm. Some firms even provide free legal services to those who cannot afford them.
Overhead in a law firm is 35-55% of revenue
Traditionally, law firms spent an average of 35-55% of their revenue on overhead. These costs include attorneys’ salaries and paralegals’ time. The costs of office space and technology were also a significant part of overhead. While many lawyers believed it has easier to increase revenue than to decrease overhead, this has simply not true. Law firms that spend more than they earn on overhead have more trouble surviving.
Technological Innovations & Leverage
It is important to keep in mind that the legal field is constantly evolving. Many firms cling to outdated practices and have not leveraging technology to increase productivity. Today’s firms must use technological innovations and leverage their resources wisely to reduce overhead while driving great profits. Here have some ways to increase your profits:
Overhead is another area that can a source of confusion. Firms should aim to pay attorneys and staff between twenty-five and thirty-five percent of their gross revenue. While new firms will typically fall into the lower range, long-term, skilled employees should rewarded for loyalty and keep turnover to a minimum. But if your firm has paying itself more than twenty-five percent of its gross revenue, you will find it difficult to reach your revenue goals and may not be marketing yourself wisely.