THE BOUTIQUE LAW firm in New Zealand is taking a big slice of legal work from larger firms that rely on brand positioning, because the small New Zealand market sees clients allocating work through their personal networks, attendees at last week’s Strategic Law Firm Management Forum heard.
In a panel session entitled ‘Responding to market forces and the rise of the boutique firm’, Julian Long of specialist commercial law and litigation boutique Lee Salmon Long said that in New Zealand, “it’s easy to know people, and people do, so the need for brand comfort is less”.
Phil Clark, former CEO and managing partner of Minter Ellison in Sydney, agreed that boutique practices were flourishing because of the small size of the New Zealand market, and said it is harder to develop networks in Australia.
John Horner of Quigg Partners also agreed the rise of boutique firms suits the small market and reduces the risk of conflicts, saying that boutiques are “here to stay”.
Clark said the emergence of boutiques is also a generational phenomenon, because it is more exciting for younger lawyers to do their own thing than hang on “treading water” in a large firm for a long period. Long speculated that in 1992, the path to partnership in a large firm took approximately seven years, but now lawyers are likely to wait 12 to 13 years to achieve partnership.
Quality of advice is what differentiates boutique firms from small general practice firms, according to Horner. He said specialisation is the key to offering quality service and charging premium fees. Boutiques also have a flexibility not shared by the large firms in being able to source the best external providers for their clients rather than having to use other practice groups within the firm, Horner said.
Long originally worked at Russell McVeagh, and admitted to being scared when he started his own firm with just two other partners, but said both the staff numbers and client base grew quickly. Rob Fisher, chair of Simpson Grierson, suggested a correlation between the drop in partner numbers at the large firms over the last ten years and the rise of boutiques. Fisher humorously noted that five boutique firms have been formed by lawyers who formerly worked at Russell McVeagh, suggesting that perhaps that firm was responsible for the rise of boutiques.