Drew Ruble [1]

• Gif Thornton Adams & Reese

• Ben Adams Baker, Donelson, Bearman, Caldwell & Berkowitz

• Keith Simmons Bass, Berry & Sims

• Howard Levine Miller & Martin

Drew Ruble: Let’s talk about current trends in the legal profession, specifically law firm growth and consolidation. Are the big getting bigger, and why?

Gif Thornton: The answer, generally, is yes, and that tracks what we’re seeing in our client communities. As businesses have grown and consolidated, the businesses that serve them—service industries like ourselves—have begun to do the same. We’re finding it makes sense to expand our regional footprint as well as to secure the breadth of services that today’s clients want and need and demand.

Ben Adams: Also, we’re all in mid-size markets, as opposed to some of the money centers. One of the things that this consolidation and regional approach has allowed us to do is to provide a broader array of expert services than we might be able to justify in one city with 100 lawyers. So that affects all of us in ways that maybe the growth in some of the bigger cities doesn’t.

Keith Simmons: We’re going to continue to see it, and the legal business is going to consolidate more and more. Having said that, I think there is a very profitable niche for firms that either choose not to be a part of a very large consolidated organization, or are not in a position to be.

Howard Levine: I agree that there is a niche, but in my experience, I don’t see how a firm similar to any one of ours could do anything but grow. If a firm our size does not grow, it’s going to shrink and dissipate. So the question is whether you’re going to shrink or whether you’re going to grow, and I think all of us feel like growth is probably the better direction.

Simmons: I don’t think there’s any question that you’ve got to grow. Our struggle constantly is to keep up with our clients and be able to provide the services they need because we’re fortunate to have many growing clients. So, you don’t have a choice. The other part is that all of us are about creating opportunities for our people. If you don’t create opportunities for your people, you can’t attract good people, and that’s the lifeblood of what we do.

DR: Regarding growth, which firms are growing the fastest? Local, regional or national firms? And why is that? Adams: Just anecdotally, I would say that many regional firms are growing significantly. There have been some major mergers in major markets throughout the country and the world. They just dwarf anything that we’ve been experiencing in our region.

Simmons: The most opportunity for growth and where it’s happening in the biggest numbers is among the national, international and global firms. Mass just breeds bigger mass. Where the least growth is taking place are the local firms—meaning the boutiques. Many don’t aspire to grow.

Thornton: The data I see is that the business of law is in a growth mode. It’s a good time to be in the business. And the firms that are growing are the good firms. If you’re working a good business plan, you’re seeing growth right now.

DR: What about firms with substantial presence in Tennessee competing on a national and international basis? How much of that goes on? What are some of the advantages or disadvantages of competing from smaller markets?

Simmons: You’ve got to decide what you’re good at, and do it. It’s difficult for a firm our size to be all things to all people. Our niche has been, and will continue to be, those strong growing mid-cap public companies, and big privately held companies in need of very sophisticated work, but that are not a Fortune 100 company. We have and do represent some Fortune 100 companies—it has served us well—but the struggle is to keep up with those businesses and provide services they need as they expand. We can’t be all things to all those clients. We may have a health care client that we do virtually everything for, but they may have a reimbursement specialist in Washington that they call on because they need that specialty.

Adams: I generally agree with what Keith was saying—a sweet spot for all of us is going to be those mid-size companies, rather than the Fortune 100 ones, partly because of where we’re located and partly because that’s just the nature of the beast. But I do think that in the last five years or so technology has made everybody closer together, making service by law firms to clients all over the world much more feasible. There’s a collapsing of people doing business together because it is so much easier to do business. For example, there’s certain areas in the health care and technology both where we’ve got a lot of expertise. We can use that expertise for Fortune 100 companies located throughout the country, and with technology you can provide it at a cheaper price. You can’t do that in all areas, obviously, but everything is collapsed and there is much more competition and mobility in the market because of technology.

Thornton: Picking up on the technology comment—to a large degree we go where our clients’ growth takes us. We’ve represented Berlitz for years, doing franchise and IP work literally around the world for them. We partner with local firms in whatever country or city we are doing business in, but because of the technology, we’re able to practice international law from Nashville. Where you’re sitting is not as critical as it would have been 20 years ago.

DR: So do clients today even want or care about one-stop shopping for law firms?

Levine: They want good service. And just as though you were picking a doctor to operate on your heart, you want somebody that has experience. You have to be able to provide that depth and expertise before that company will come to you.

Adams: There is some sort of a bias with larger clients to use as few firms as possible if they’re getting the outstanding client service that Howard talks about. If you can provide them really outstanding service in, say, litigation management across a large region, then they would prefer that to the use of many different law firms.

Thornton: If they can find a firm that has a footprint that matches their footprint—that’s their preference. On the other hand, it will always be the case that they’ll use multiple law firms and really look for the people with the expertise they’re looking for.

Simmons: You have to factor in the rate structure of the firm, and whether or not the type of practice is becoming more of a commodity than a specialty that you can charge a higher rate for, and we’re seeing that in our labor and employment areas. Obviously, insurance defense has been that way for quite some time. Adams: There are areas where it’s impossible to do every service. Price does not allow us to be all things to all people.

DR: Is specialization an identifiable trend in the profession? Strictly IP boutiques, or strictly tax boutiques, labor boutiques, etc.?

Adams: Specialization has been the overriding trend of all trends for the last 30 or 40 years. And it will continue, whether it is a boutique firm, or in our larger firms. Having really specialized expertise is critical to everything we do.

Thornton: You see firms either going big and general, or going small and doing one thing really well.

Levine: But the bigger you get as a firm, the more specialty you see within that firm. When I started practicing, we all did everything. And you just can’t do that anymore. It’s just not possible.

DR: What about some other identifiable trends in the profession?

Adams: One trend that is relatively recent is the trend of major corporations to really insist on efforts in diversity and results in diversity. It was talked about for years, but now there’s some more concrete actions—a call to action by some of the major in-house counsel throughout the country. Wal-Mart is now going through a round of actually firing some well-established law firms that were doing good work. Wal-Mart just felt like the firms weren’t making headway with diversity.

Thornton: We do a lot of work with public entities and a lot of the public procurement now has specific components that require diversity participation. We embrace that, but it is an ongoing challenge. Generally speaking, the game is to recruit, retain, motivate and manage the best talent you possibly can to make your team, and doing that with minority attorneys has got to be a goal.

DR: Where does the talent come from, and what is your opinion of the caliber of students being produced by the law schools these days?

Levine: The talent is terrific—every one of us only look at and only interview the top people in their classes in these schools, and those people are excellent.

Simmons: The people we’re getting now are probably smarter and have greater résumés than ever before. I’m so thankful I don’t have to compete with these young people. They have fabulous backgrounds, they’ve been to great schools, and they’ve done well. However, law schools more and more recruit by the numbers, so that they can look good in U.S. News & World Report. You get students in law school who are really good at being students, and have always been good at being students, and those people rise to the top because that’s what is rewarded at law school—being a good student. In the past, law schools have been less driven by that and more driven by the total person. Many times, you get some really bright people coming out of law school who may not be the best practitioners.

Adams: I agree with that mostly, but I would throw in another factor. To me, it also entails some generational differences—the whole Generation X, Gener- ation Y approach to things that is a little different than how we may have approached building a career, or building a profession. They are shaped by forces unlike those that shaped us, and their attitudes are different. Because of this, I’m not quite sure how you can really identify those people who are really going to be in it for the long haul, wanting to build a career with your firm.

Simmons: This whole generational thing presents management challenges, and it’s educational for us geezers that have been around for awhile—it introduces a whole other element into the workplace, and I think it’s fascinating. It bleeds over into stuff like alternative work schedules that would have been unheard of ten or fifteen years ago. Now, it’s a thing we need to do and not necessarily just for women. You have to do many innovative things to hold on to and motivate and develop the great young talented people.

DR: A recent survey of mid-level associates published in The American Lawyer found senior partners lacking in the areas of communication, not clearly communicating what it takes to be a partner, not openly communicating the status of a firm’s finances and strategies, and not adequately providing training and guidance. Responses?

Levine: That’s a perpetual fight. We are always attempting to communicate, and we never, ever succeed in adequately communicating to the younger lawyers what we expect from them to become equity partners. In many cases, it’s that you know it when you see it. I wish we had a formula that would be satisfactory to all of those young folks.

Simmons: It’s only partially generational. It is also a reflection of the structure of our profession now. We’ve got much bigger firms. It is much more difficult to make partner—the upward mobility that was historically just kind of there in a law firm is not generally there as much as it was. What I hear the young people saying is, “Invest in me, care about my career.” That’s human nature. That is not generational. That’s what I wanted when I was coming along. It’s what anybody would want in any profession at any time. And that’s our challenge as law firms—to invest in their careers and make them as good as they can be.

Adams: That underscores a trend you see in most large law firms—a much more coordinated, organized effort at professional training and development than there was when all of us grew up. Then it was pretty much a sink-or-swim environment. It worked. But the expectations and demands of the young people today are more along the lines of what Keith is talking about. They want it demonstrated in real organized, formal approaches, in addition to mentoring.

DR: Switching gears, what about the issue of law firms staying rooted in central business districts or moving out—is there a trend there? What’s behind it? Is one preferable to the other?

Simmons: It is less crucial for law firms to be in central business districts. If you poll your litigators in big law firms, they spend a whole lot less time in the courtroom than they used to, so being close to the courthouse is not as necessary. Technology, again, has made it unnecessary to be running back and forth to the courthouse all the time. Big lawsuits just don’t get tried, and that’s what most of us handle—big lawsuits. Being near other lawyers is important, but again, I think technology has changed that a lot. Being close or being accessible to your clients is important. We all sort of culturally, traditionally, like being in the central business district, and I hope our firm stays there, but I don’t think it is crucial.

Thornton: I would punctuate the point by saying our lawyers are practicing at home, in the evenings and at all sorts of hours, and we want them at the clients’ offices, and we’re encouraging that much more. You see fewer managing partners patrolling the halls of an office, downtown or anywhere else, because the practice is going on in all sorts of different places. We plan to stay downtown as well, though.

DR: Finally, what’s the most significant thing that has occurred to your firm in the past year.

Thornton: The most significant step that Adams & Reese has taken is coming to Nashville. It was part of the strategic plan that was adopted in 2001—to get to the desirable markets of Birmingham and to Nashville within five years. And that is a compliment to those of us who live and practice here. The move puts us in a broader regional footprint from which we can serve clients wherever they are, but particularly in this area.

Simmons: We spent a lot of time on pharmaceutical litigation this year, and last year, and it has made us look at different ways to staff big matters, including people in non-traditional lawyer roles, people who are not proceeding toward partnership but want challenging, interesting work and are content with that. We didn’t talk about that a minute ago, but I think that is another big trend in the future—different ways to employ talent that are outside of the traditional mold of law firms. Additionally, we’ve had about four big lawsuits that either settled, or, one of them was tried to jury and we won it for our client, Philip Morris. In our regulatory and investigatory areas, we’ve had a couple of engagements that are really Wall Street-type engagements. It’s been a good year on both the litigation and the transactional side for us.

Adams: Katrina has been the most incredible event in my lifetime in this part of the country, and that’s had a huge impact on our Louisiana and Mississippi colleagues. It’s not only created a lot of hardship, but it is also presenting many opportunities for the future. And so following rapid growth in ’03 in Birmingham, and in ’04 in Louisiana, this was a year for some consolidation and integration emphasis, but also to get going in growing our Washington offices.

Levine: We’re in the process of studying what growth potential we have within this region, and we’ve been amending our strategic plan to take into consideration what kind of growth our lawyers really want to see. We were also very successful in litigation in winning a Tyson Foods case recently, and we’re lucky to have representation of a significant Coca-Cola interest.

DR: Any final thoughts?

Simmons: I thought the biggest trend in the profession was to see how we could increase managing partner compensation.

Levine: Well, that’s the next thing I was going to ask.

Thornton: I think I’d be happy with just lowering managing partner stress.

DR: Thanks, gentlemen. Interesting conversation. feedback: ruble@businesstn.com [3]