Small firms see opportunity in CT’s tough legal industry…
There’s a downsizing trend in the law sector these days, with lawyers taking advantage of technology and a teamwork approach to practice in smaller firms or open their own shop.
The latest example: Attorneys Matt Baldini and Richard Lang, two lawyers who have practiced in both corporate and traditional firm settings, have teamed up to start Baldini Lang LLC, a Hartford-based firm focused on serving credit unions, community banks, financial technology companies, and franchises.
Jonathan Shapiro, owner of Shapiro Law Offices in Middletown and Stamford, a small independent firm with three lawyers and a paralegal, is one of those who thinks small can be effective. Acquisitions by larger firms are still part of the mix, he said, but there is a motivation among many lawyers to go small, particularly after years of downsizing and layoffs in the industry.
“A lot of people are starting their own firms — going out on their own or even working with a small group of people,” he said. “Sometimes it is about specialization, but there are other young attorneys who start their own practices right out of the gate.”
Connecticut Bar Association President Mark Dubois, who is an attorney with Geraghty & Bonnano in New London, said a large contraction in the legal industry emerged about seven years ago that affected both large and small firms.
Some of it was rooted in the recession, but another factor was “the ubiquity of do-it-yourself resources available for free or cheap online,” he said.
“Some new market players, such as Legal Zoom, started skimming off the low-hanging fruit from traditional practice. That trend continues,” he said. “Though the pressure on large firms is easing up some as the economy improves, the pressure on small firms continues as more and more folks venture to court without lawyers or use Internet resources for simple work like incorporation, wills, and such.”
Still, solo and small practices have always made up 60 percent to 70 percent of the Connecticut law market, he said. As big firms began to contract, there was more of an inclination among lawyers, including recent grads, to open their own shops or join smaller firms. Many big firms will hire lawyers with three-to-five years of experience and with a portable book of business, he said, but they will not pay for new lawyers on the learning curve.
The trend toward smaller practices, however, has led to increased competition.
“So the market for new lawyers who wish to open up a shop is flooded with supply but facing declining demand,” Dubois said. “Some who are clever will find new ways to offer services and will thrive. But others find themselves saddled with large student debt, high startup costs, and a lack of sharp business skills, which they would need to fashion a viable business plan.”
Tips for entrepreneurial lawyers
Shelton/Westport lawyer Carmina Tessitore, who started her own firm in 2013, said young lawyers must be careful about hanging their own shingle. Lawyers who want to become entrepreneurs need experience and capital, she said.
Tessitore said she developed both by saving money and working at medium-sized law firms and as a mediator for the state Judicial Department.
“I saved up a lot, until I got to the point when I was ready,” Tessitore said. “Many people do not realize that you have to cover yourself while growing your business. You have to treat the practice as a business with your product being legal services.”
Lawyers looking to strike out on their own also need to be as well-rounded as possible, she said.
In addition to mediation, for example, Tessitore handles cases involving family matters, foreclosures, small business cases, and labor and employment issues. She also contracts services out to other firms and is an adjunct faculty member at Quinnipiac University.
Shapiro said there is a plethora of legal resources available on the Internet, like databases and libraries that cater to the solo or small practice.
But good old-fashioned teamwork can also help small practitioners make ends meet without having to hire a ton of support staff.
“The smaller firms rely on [other] resources because no one can do everything,” Shapiro said. “No matter how talented a lawyer is, it also helps to have other lawyers to bounce things off of.”
Shapiro said he often teams up with N. Kane Bennett, a neighbor of his at Aeton Law Partners in Middletown. Bennett started his firm in 2012 with two attorneys and a staffer; today the firm employs five lawyers and two support staff.
“As a small firm, we have developed what you might call a consortium of resources that is designed to duplicate what you have in a bigger firm setting, attorneys and professionals from various areas that I do not practice in that I can lean on as a resource or referral as needed,” Bennett said.
Bennett said he also maintains mentor relationships with younger attorneys and peer relationships with veteran legal minds.