As industries produce larger companies through mergers and acquisitions, the trend toward law firms developing into larger, regional ones is good news for Mississippi.
“If you look across the country, almost every industry is going through a very rapid process of consolidation,” said Bill Reed, president and COO of Baker Donelson’s Jackson office.
“There are mergers and acquisitions going on every day between banks, manufacturing companies, distributors, telecommunications companies, for example, and we’re ending up with bigger and bigger clients. The consequence for law firms is that in the long run, our clients are looking for fewer and fewer law firms to deal with. They want bigger law firms with more depth and more expertise and more geographic coverage so they can get what they want from fewer firms across the country. That belief is what is fueling our strategic plans, which is to get bigger and more geographically dispersed.”
As law firms grow in Mississippi, more legal business will stay in the state, said Larry Houchins, executive director of The Mississippi Bar.
“Businesses do not have to go out of state to obtain legal assistance,” said Houchins. “The law firms in Mississippi have the experience, expertise and the ‘full-service’ capabilities to serve the needs of Mississippi businesses.”
The trend toward larger firms is also the result of increasingly complex areas of the law, said Walker Watters, a prominent oil and gas attorney who recently joined Brunini Grantham Grower & Hewes in Jackson.
“It’s very difficult for a small firm or a single practitioner to provide services to his client because so many different specialties of the law cross in particular situations,” said Watters. “Since I’ve been here, it’s been a benefit to me to be able to pick up the phone and call another attorney to ask about an area of the law that I don’t know about.”
Grooming larger law firms is also fueled by increased competition from accounting firms, Reed said.
“At this point in the U.S., lawyers and accountants cannot be partners,” he said. “In Europe and in Canada, they can be, and some of the largest law firms in the world today are big five accounting firms. Traditionally, accounting firms have been a lot better capitalized and a lot better leveraged than most law firms. Recently, a group of two or three tax partners at King & Spalding in Atlanta have affiliated with Ernst & Young and opened a law office in Washington, D.C. They can’t formally be partners, but it’s the start of a trend.”
The result of larger law firms and increased competition is a better product, said Ed Brunini, Jr. of Brunini Grantham Grower & Hewes.
“Overhead costs are getting higher,” he said. “All technology does is put you in a faster world. It doesn’t make it easier to practice law. It gives everybody the same information at the same speed. It puts more competitive pressure on lawyers. The final product is probably better, but I don’t think the process is much better.”
Charles Ozier, president of Wise Carter Child & Caraway in Jackson, said the firm recently added several attorneys and will hire more this year.
“Because of our clients’ needs for so many different types of legal work, we have lawyers working in many, many different areas of specialization,” Ozier said. “For instance, we have one of the few licensed patent lawyers in the state.”
Lisa Flynt of Butler Snow O’Mara Stevens & Cannada in Jackson said the dynamics of the delivery of legal services change as law firms become larger.
“The ultimate result: providing an expanded, enhanced, more sophisticated practice to the corporate citizens of the state,” Flynt said. “The business community has benefited from being able to obtain legal services that can, and do, compete with those from Chicago or New York firms. Companies form strategic alliances with local firms who understand their business, have an interest in their community and provide more value for the price of the service.”
The creation of larger law firms is more prevalent in larger markets, said Alveno Castilla, chairman of Watkins Ludlam Winter & Stennis, a Jackson-based law firm that was established in the 1890s and lists 63 attorneys.
“We recognize the movement of regional law firms into the Jackson area,” he said. “We continue to be client-driven and adapt as our clients’ needs change.”
Tommy Shepherd, treasurer for Watkins Ludlam, said the law firm became a regional one when a practice on the Gulf Coast was recently added.
“We had clients asking us to be on the Mississippi Gulf Coast — one of the real growth areas population- and business-wise to the state — and that’s what we’ve done,” Shepherd said. “We found some of the best lawyers to affiliate with us, and we’re very pleased with how that’s developed.”
Law firms that survive and are profitable enough to attract — and keep — the best attorneys will be either large law firms or true boutiques, Reed said.
“There will always be a place for smaller, very specialized practices with solid client bases,” he said. “The one big challenge is increasing the profitability of the law firm to keep the best partners, getting the best associates is to have the money to do it. You’ve also got to have the money to keep pace with technology and marketing. Those are tremendous expenses that, five or 10 years ago, weren’t nearly as significant as they are now.”
Contact MBJ contributing writer Lynne Wilbanks Jeter at email@example.com or firstname.lastname@example.org.