Boutique Mystique
Bigger isn't always better. Just ask the lawyers who work at local boutique law firms.

By Paul Freeman

Shelly Crocker was strolling from the parking garage to her Seattle office one day when she had an "aha!" moment.

It was in 1999, two years after she co-founded a boutique law firm focusing on bankruptcy law. "I was whistling and was happy," she recalls. "I felt I could write one of those books: 'Do What You Love.' It was a revelation to me, that you could enjoy your work that much." In the nine years since Seattle's Crocker Kuno Ostrovsky sprang into existence, says Crocker, "almost every day I've been happy to go to work."

Not every lawyer practicing in a boutique firm-one with a handful of lawyers, typically 10 or fewer, and a focus on one or two practice areas-waxes so eloquent about the experience. And there are definite downsides to this practice model. Still, lawyers in these firms seem exceptionally content with their lot, pointing out that they can compete with big firms for certain clients, exercise greater control over their professional and personal lives and earn a good living, sometimes more than their counterparts at large firms from which many of them came.

Still, don't look for a dramatic increase in boutique firms. Like any entrepreneurial venture, these firms involve financial risk, and that is something few lawyers have the stomach for, boutique lawyers say.

The reasons lawyers forsake large firms for boutiques vary. Patricia Raskin of Seattle's Raskin Snodgrass, an intellectual property and business law boutique, says, "I didn't feel personally invested in the success of my [previous] law firm. I didn't feel the model was right for me. I wanted more control of the practice."

Crocker wanted to represent debtors, even though getting paid for the legal work can be a dicey proposition. "We're always dealing with people who don't have money," she explains. "Big firms don't have the appetite for this risk. I have plenty of appetite for risk and like to make my own decisions about whether to work with a particular client or not."

Jay Kornfeld, who left Seattle's Culp Gutterson & Grader (since dissolved) to help found Seattle's Bush, Strout & Kornfeld, another commercial-bankruptcy boutique, says he saw a "business opportunity in being a small commercial bankruptcy firm." In other words, he saw a chance to make big bucks, often a primary motivator for founding a boutique.

Despite their relatively small size, boutiques can attract powerhouse clients. Raskin Snodgrass represents the likes of Microsoft, Washington Mutual and Starwood Hotels & Resorts Worldwide. A labor and employment boutique in Spokane, Allen & McLane, counts among its clients Coldwater Creek, Fred Meyer and Premera Blue Cross.

When Dan Harris helped found Seattle's Harris & Moure, an international-law boutique, he thought it would attract small businesses exclusively. "While that's the bulk of our work, we've gotten a surprising amount of work from larger companies," he says. "They like using us as opposed to the big firms because we're cheaper and more focused."

Boutiques can become involved in high-profile matters and score major wins. Kornfeld's firm is the future-claims representative in the Catholic Diocese of Spokane bankruptcy case. Crocker's firm handled the $100 million bankruptcy of Mercer Island's Partners Mortgage Corp. Matthew Bergman of Seattle's Bergman & Frockt was one of seven plaintiffs' lawyers that helped negotiate a $4.3 billion global asbestos settlement with the Halliburton Company, involving 250,000 cases nationwide and resulting in payments of more than $30 million to Bergman & Frockt clients. Like most attorneys, boutique lawyers are reluctant to get too specific about fees, primarily because of concerns about antitrust price fixing. But Harris says his firm's hourly rates range from $250 to $350, significantly below the $450 to $600 large firms are said to charge for similar services.

In addition to lower fees, boutiques say they attract clients by offering them things they can't always obtain at large firms, such as greater access to senior lawyers. According to Kornfeld, a client hiring a particular lawyer at his firm will almost always have access to that individual. A prime example: Kornfeld was hired to represent Larry's Markets, which in May filed for bankruptcy. "I'll be the point man, always available," he says. "That's one thing clients like about hiring our firm."

Boutiques also say they offer leaner staffing, which holds down clients' fees. "I can contrast how we staff here with how we staffed at Bogle," says Kelly Corr, who left Seattle's Bogle & Gates after it self-destructed, going on to become a founding partner at the Seattle litigation boutique Corr Cronin Michelson Baumgardner & Preece. "Some large firms put a lot of people on a case; we generally put fewer people."

Boutique firms are also able to attract referrals from small to midsize law firms. Allen & McLane frequently gets these referrals for labor and employment matters. "The firms are reluctant to send their clients to larger firms, because they're afraid they won't get the client back," says partner Keller Allen.

Some clients just feel more comfortable with a boutique firm. Take Seattle's Fahlman Olson & Little, a four-lawyer trust and estate-planning firm. Its clients include professional athletes, famous artists and high-tech executives. "They understand the entrepreneurial angle of a small [law] firm," says partner Eric Fahlman. And he points out that his practice involves highly personal issues-including how much clients are worth and when they expect to die. "It's sometimes easier for clients to talk [about these issues] to a firm of four than a firm of three hundred."

One advantage of practicing in a boutique firm, according to those doing it, is being more the master of your fate. "We're the captain of our own ship, not dependent on how another department or office is doing," says Corr.

Boutique firms also claim they're more flexible than large firms about alternative-fee arrangements that can produce substantial financial rewards for a firm. "We always have our eyes open for fee arrangements and contingencies that, in a big firm, we couldn't take," says Jim Murray of Gordon Murray Tilden, a litigation boutique that represents Boeing, Puget Sound Energy, Costco Wholesale and Weyerhaeuser in coverage disputes between the companies and insurers.

In some cases, a dispute might involve both legal and factual issues. Murray's firm might cut a deal in which it agrees to handle pretrial motions on the legal issues for a fixed fee, no matter how much work is involved; if the firm prevails on the motions and the factual issues, it might take a percentage of the recovery. "In some years, these arrangements have been very successful," says Murray, adding that though big firms can offer similar arrangements, "the momentum is against it."

Another advantage of a boutique practice, some say, is the potential for a more balanced life. Bob Sebris of Bellevue's Sebris Busto James, a labor and employment law boutique, says he doesn't bill as many hours as he did at his former firm. And his current firm offers a low-key atmosphere he says is hard to beat. "We have casual day every day, not just Friday."

What about money? How do lawyer incomes at boutique firms stack up against what large-firm lawyers take home? Many boutique lawyers invoke ignorance on this issue or parry the question with the polite euphemism that they make a "comfortable living." Some of the reticence may spring from concerns about offending larger, full-service firms that send them business the big firms can't handle because of client conflicts.

Raskin, however, isn't shy about her earning power. She and her partner, Erin Snodgrass, "don't work as much as we used to, but we make more money" than at their previous firm. Crocker, who takes six weeks of vacation most years, says, "Over my lifetime, I expect I'll do better financially, and I'm going to take a heck of a lot more vacations."

Practicing in a boutique firm can bring welcome surprises. "I've felt more security in a small firm than I felt in a larger setting," says Kornfeld. The reason, he believes, is that he directly controls the issues affecting his livelihood, and in a small firm everyone pulls in the same direction. Large firms, he says, can have many divergent views on firm issues.

For Corr, a big surprise is the enjoyment he's deriving from practicing in his boutique firm. "The imploding of Bogle left a sour taste in our mouths. Our new firm has been a lot of fun and a reasonable success. We weren't sure when we jumped from the dock we could swim, but we're still floating."

While lawyers in boutique firms express a relatively high level of job satisfaction, they admit boutique practice has downsides. One is the absence of broad substantive expertise. When Murray, who used to practice at a large firm in Washington, D.C., would litigate a case involving a particular environmental statute, he says, "I could pick up the phone and talk to someone [at my firm] who just did that statute and ask him, 'I've got this issue and what do you think?' "

Even though it doesn't take a big pile of legal work to keep a boutique firm busy, "when things slow down, we don't have another practice group to pick up the slack," says Kornfeld. The other side of that problem: too much work. "There are times when everybody has to pitch in because we're so busy, and you wind up doing more to get things out the door than if you had a bigger support staff."

Harris relates an incident in which one of his firm's seven lawyers was vacationing in Spain when he was contacted by a Hawaiian company seeking to buy a Vietnamese bamboo firm. The lawyer spent 14 hours at an Internet café banging out an agreement for this transaction. Sometimes, says Harris, "the workload can be crushing because we hate to turn down good work."

Then there's the size dilemma: how large a firm can be without losing its boutique advantages. For Seattle's McKinley & Irvin, a family law boutique with 10 lawyers, the answer is clear: 10 to 12. "I wouldn't want our firm to be any larger," says partner Rita Irvin. "We have a very congenial culture for work, including celebrating everybody's birthday with a cake."

Other lawyers confess uncertainty on the size issue. "It's a question we're constantly asking ourselves," says Murray, whose firm has 10 lawyers. "If we begin to grow for the sake of it, we'll have some of the same headaches larger firms have in terms of overhead and management."

Whether the number of boutique law firms in Washington is growing is an open question. Corr points out that though there are more boutiques than a decade or two ago, the number of lawyers in the state has also grown. "So there may be more boutiques, but maybe the percentage of lawyers practicing in them is no greater." In eastern Washington, Allen sees no movement toward boutique firms.

Several factors-among them law-firm mergers creating ever larger firms with higher billable-hour requirements-could lead to more boutiques. "These pressures create dynamics within large law firms that might cause people there to think of alternative law practices," says Sebris. And Raskin says she and her partner "get calls all the time" from other lawyers about practicing in a boutique firm.

Yet most boutique lawyers don't expect to see a surge in boutiques. "Lots of lawyers . . . if they leave a big firm, they're worried about what kind of clients they'll have," says Allen.

Murray echoes that sentiment: "It's not in a lawyer's genes to take this kind of risk." L&P

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