The Foster Group Featured in The American Reporter on Middle Market Law Firms
/When it Comes to Law Firms, What is the Middle Market and Why Does it Matter?
For those seeking legal counsel, the cost of representation is a major consideration. The most affordable attorneys fees are often at least $250 per hour, while rates for those with a wide range of experience and long record of success exceed $1,500 per hour. With those numbers, it is easy to see how even a small legal issue can quickly become exorbitantly expensive.
However, hunting down the cheapest option when faced with a legal situation is not necessarily the best course of action. Attorneys that charge higher fees often bring a higher level of experience that can be invaluable in certain cases. In such situations, a middle market law firm can be the best solution for balancing cost and capability.
What are middle market law firms
The term “middle market” is used in the legal field to describe a broad cross-section of law firms. It generally does not refer to the number of attorneys employed by a firm; middle market firms can range from boutique firms, which typically have under 50 attorneys and focus on a niche area of practice, to firms that rank among the highest grossing in the nation.
In some cases, middle market is used as an indication of a firm’s client base, although it can encompass a wide range of client types. Generally speaking, middle-market can range anywhere from startups to companies generating in excess of $1B in revenue, although top performing middle-market firms can certainly handle transactions valued at over $1B. Middle-market often is an indicator of the typical deal size a firm handles, or their “sweet spot” in terms of expertise.
The one factor that is consistent for middle market firms is the partner billing rates, which on average range between $600 and $950 per hour, although it can vary by geography.
“Middle market firms excel at offering a full-service platform and blending a cost-value approach that clients are seeking,” says Drew Foster, Managing Director at Foster Group Legal Search. “Unlike some smaller firms that can have limited bench strength or lack expertise in certain practice areas, and unlike some big law firms that charge premium rates for expertise, middle market firms can provide both a strong value proposition with expertise and a helpful geographic footprint, in a more cost-effective manner.”
Foster Group Legal Search is a full-service legal recruiting firm that specializes in helping partners, counsel, and associates to find positions with the world’s top law firms and companies. Their legal recruiters pride themselves on taking a career-counseling approach with their candidates, especially when attorneys find themselves at a transition point in their careers.
As Drew points out, the cost savings that middle market firms can offer when compared with more expensive firms doe not mean a lower level of service. Middle market firms, where attorneys typically are not hampered by a high level of bureaucracy, can be agile and attentive to clients’ needs. Clients of all shapes and sizes are valued and receive attention regardless of the size of the matter. In addition, they have the means to provide attorneys with the resources and support that they need to succeed.
Finding top talent at mid-sized firms
It would be natural to assume that the top talent in the legal field would be found at the largest firms where the highest fees are charged, but that is not necessarily the case.
“Attorneys at middle market firms have often been trained at top BigLaw firms,” explains Michelle Foster, Managing Partner of Foster Group Legal Search.
Elaine Oh, who serves as a Managing Director at Foster Group Legal Search, adds that top talent is attracted to middle market firms because of the greater flexibility they find there.
“We are finding that middle market firms tend to be filled with sophisticated attorneys capable of working with marquee clients and handling complex legal matters, but with less ‘red tape’ and bureaucratic roadblocks found at larger firms,” says Elaine. “There also tends to be more flexibility for attorneys in areas such as remote work, billable hours requirement, billing arrangements, and partnership track. By capitalizing on these factors, many mid-market firms are attracting top talent.”
Changes brought to the workplace by the COVID-19 pandemic have also assisted middle market firms in building teams that include top talent, as Michelle explains.
“As a result of COVID, we have seen more flexible work arrangements designed to address work/life issues and retain talent being put in place at middle market firms,” Michelle says. “These include creative compensation structures and tracks that adjust for hours in conjunction with compensation. As a result, attorneys can select an ‘hours track’ that provides for personal and professional sustainability, without taking themselves off of a Partnership track.”
Flexible billing rates are a final and key benefit often associated with middle market firms. Bill rate flexibility allows attorneys to offer the same high quality work their clients expect at an even more affordable rate. Especially for those at the beginning stages of building a practice, rate flexibility allows these attorneys to start building sooner rather than later.