In some circles, downtown Sacramento’s Downey Brand LLP is being called the incredible shrinking law firm.
While there might be ample evidence to support that line, the leaders of the 88-year-old firm say that Downey Brand is well-financed, client-focused and here to stay.
“My sense is that we’ve reached the new equilibrium … and in reaching that new equilibrium you’re going to lose and gain people in the overall changes … and changes in the marketplace,” said Scott Shapiro, Downey Brand’s recently elected managing partner.
Downey Brand remains Sacramento’s largest law firm – Kronick Moskovitz Tiedemann & Girard is ranked No. 2 on multiple lists, with more than 50 attorneys at 400 Capitol Mall – but profound changes have taken place over the past year.
A year ago, Downey Brand had more than 120 attorneys. Since then, attorneys have periodically departed in groups to form boutique law firms of their own. Thirty-five have left in the past five to six months alone. Today, Downey Brand has 83 attorneys.
As attorneys left, Downey Brand has correspondingly reduced support staff in its Sacramento office – 17 departures, representing nearly 20 percent of staff. With fewer workers in the high-rise at 621 Capitol Mall, Downey Brand recently renegotiated its lease with Sacramento’s David S. Taylor Interests Inc. As of June 1, Downey Brand will go from occupying about 100,000 square feet on five floors to about 60,000 square feet on three floors.
All this might make a steely eyed business executive swallow hard, but Shapiro and recently elected firm Chairman Stan Van Vleck insist that they are not in panic mode. They said most of what has occurred comes as no surprise since they assumed their executive-sharing duties in March.
“We knew then that some (Downey Brand attorneys) would say, ‘You know what, I understand what you’re doing, but I don’t think it’s for me,’ ” Shapiro said.
Attorneys who have left Downey Brand in recent months report that they are happy working for smaller firms, and especially enjoying their time with former Downey Brand colleagues who share their legal interests. Several who left Downey Brand declined to speak on the record about their experiences there. Others conceded privately that they don’t miss the in-office meetings and what they considered a strict management structure that aimed to control everything from division of work to personal appearance.
Other Downey Brand alums said now was the right time to break away.
In April, Downey Brand partners Tom Stewart, Winnie Ward and Gregg Josephson left to form Stewart Ward & Josephson LLP, specializing in real estate and business law transactions from Sacramento offices at 1601 Response Road.
“I think it just made a lot of sense for us,” Stewart said. “We had clients. We had experience. We did not need anyone to hand us work. Working at a big firm can get you a lot of interesting work, but it’s a package deal that comes with meetings and committees and administrative details. You have to feed the beast.”
It is not unusual for attorneys with specific skill sets to leave large law firms and strike out on their own, subsequently working with clients they knew from their time with larger firms. Four years ago, the National Law Journal was reporting about the growing trend of attorneys with large U.S. firms splitting off to form their own boutique firms.
Today, industry analysts point out that not only is a smaller firm potentially more lucrative for “specialist” attorneys, boutiques typically have lower management and overhead costs, enabling them to entice clients with lower fees. The Los Angeles-based EZC International Arbitration Law Firm called the launch of boutique firms a global trend, with heavy activity in both Europe and Asia.
Industry trends aside, Downey Brand conceded early this year that there was enough “uncertainty” in its offices to set up a strategic weekend retreat in early March. It was during that retreat that Downey Brand partners elected Shapiro as the new managing partner and Van Vleck as chairman. They pledged to make Downey Brand more of a “one-stop shop” for clients seeking diverse expertise.
Sharpiro and Van Vleck said they split up general management duties so both could keep their hands in the legal business of the firm. Both said last week that the shared responsibility approach has worked well, and there are plans to hire more attorneys up the road.
Since the retreat, however, others have left Downey Brand.
The most recent departures included Jeffrey Koewler, a former managing partner at Downey Brand. He’s part of the newly formed law firm of Delfino Madden O’Malley Coyle & Koewler LLP at 500 Capitol Mall, a stone’s throw from Downey Brand’s offices. Delfino Madden specializes in corporate, business, employment and family law and is made up of Downey Brand alums Dan Coyle, John O’Malley, Jennifer Madden and Chris Delfino.
Shapiro and Van Vleck say they have not been blindsided by the departures. Economics alone helped set the table, according to Shapiro.
“One of the things that I’ve become aware of over time … is that when the economy was bad, economically, there was no viable way to leave. There was no guarantee of office space (and no) guaranteed revenues,” Shapiro said. “There was a long period of time when (attorneys working for large firms) felt trapped, if you will.
“With the economy picking up, there are more opportunities for people to strike out on their own. And sure, there are occasions where people mutually agree that some personalities don’t play well together. But we’ve respected the decisions of those who decided to leave. We’ve been giving them time to make their arrangements.”
Tom Bronstein, a Washington, D.C., legal industry consultant and analyst, said the trend of lawyers splitting off from large urban firms to form smaller boutique firms is “certainly driven by economics.”
“Back in the dark days of the recession, it’s true that there were fewer avenues for (attorneys) to suddenly split off from the mother ship and try it on their own, cold turkey,” Bronstein said. “Many business clients just cut legal costs from their budgets in order to survive … Now, with the economy gaining some momentum and businesses looking to grow again, there’s more demand for legal talent with special skills.
“Now is a much better environment for starting a boutique firm.”
Call The Bee’s Mark Glover, (916) 321-1184.