Why Midsize is the Right Size During a Downturn
Managing Partner Ronald H. Shechtman discussed the strengths of midsize law firms during economically stressful times with The Mid-Market Report. The advantages of a smaller sized team and a unique business structure could be the saving grace during a downturn. The following is an excerpt from The Mid-Market Report article titled "Why Midsize Firms Are Less Likely to Eat Their Young In A Crisis":
Ron Shechtman, managing partner at New York-based Pryor Cashman, said the smaller number of attorneys at a typical midsize firm makes weathering down cycles easier.
“In Big Law, they depend on leverage,” Shechtman said. “In partner compensation, one of the basics in setting partner comp is whether you meet a standard of three associate hours to one partner hour. That model has nothing to do with a midsize firm.”
It’s a visible difference, he noted.
“When we walk into a room litigating against an Am Law 50 firm, they have four to five people in the room. We have two. That dynamic, where clients are much more concerned about getting the right senior person, plays well for a firm that doesn’t depend as much on leverage,” Shechtman said.
That isn’t to say that midsize firms don’t have financial concerns related to the pandemic. While they have less overhead, smaller firms also have less room for error financially.
Shechtman said that while different practice areas have been affected differently by the pandemic, such as labor and employment receiving more attention and real estate receiving less, larger firms usually tend to focus more on big corporate deals and litigation, which have both been stymied by the pandemic.
“Our business doesn’t depend on giant transactions or complex litigation that requires large teams,” Shechtman said. “We are less dependent upon those elements, and less affected by big transactions slowing down.”
Read the full article published in The Mid-Market Report linked below.
