A partner at TressCox Lawyers who has just launched a boutique firm told Lawyers Weekly that start-ups led by ex-large law partners will keep big firm fees in check.
TressCox partners Alfonso Grillo (pictured) and Garrick Higgins have co-founded a new firm called GrilloHiggins, which officially opened its doors yesterday (2 June). The Melbourne firm will focus on the partners’ existing M&A, capital markets, corporate advisory and energy & resources practices.
Grillo and Higgins worked together at TressCox for more than 15 years. They have brought across two lawyers, senior associate Tony Petani and associate Eli Davis-Ross, to the new firm, along with their “supportive” clients, said Grillo.
GrilloHiggins is the latest in a series of boutique firms that have been been set up by mid-tier or large law partners.
In May, Tony O’Malley and Tim Blue, two big fish who held leadership roles at King & Wood Mallesons, launched Sydney boutique LCR Advisory. A few months earlier two corporate partners from Minter Ellison and DLA Piper co-founded ‘virtual firm’ Hive Legal and, late last year, a legal veteran from CBP Lawyers started Melbourne-based White & Mason.
Grillo commented that the trend will continue, adding that boutique firms “keep larger firms honest in terms of being competitive”.
The new deal
Despite the founders of these new firms coming from large law environments, the smaller start-ups are jettisoning much of the rusted-on pillars of the large law firm model.
In particular, value pricing is replacing the billable hour.
Grillo said he started GrilloHiggins to move away from traditional billing methods, which can “provide uncertainty and reward inefficiency”.
“I wanted to offer [clients] greater ... cost certainty, value pricing and risk-sharing arrangements,” he explained.
Grillo added that billing methods had moved to the forefront of his discussions with clients, many of whom were frustrated with large law’s inflexibility when it comes to pricing.
“The nature of legal practice is changing from time billing,” he said.
“We’re being encouraged to adopt more risk sharing and fixed-fee arrangements, and that doesn’t necessarily reflect how a larger firm wants to operate.”
The cost of technology
Working against the clients of firms that use time billing is the prevalence of email, according to Grillo.
He said firms regularly exceed budgetary expectations when there are multiple lawyers working on a matter who are all billing the client to review the same email correspondence.
“When you record each email as a unit and there are multiple readers of that email across a firm, all of a sudden things can get well and truly out of hand without the client appreciating that’s what’s occurring,” he said.
While Grillo admitted that his firm will default to time billing on some matters, his aim is to ensure all fees reflect the value given to clients. He cited fixed fees and component pricing as models he is “not shirking away from”.