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Bar News - September 21, 2001 NH's Top Law Firms Weather Change By: Lisa Sandford MERGERS, THE INTERNET and competition from outside entities are all affecting the way law firms operate. But to what extent have these factors influenced the private law firm landscape in New Hampshire – particularly the "big cats?" A list of the state’s 20 largest private law firms five years ago compared to today shows that the top three firms in terms of size have remained the same – although their rankings have changed. According to NH Bar Association member statistics as of July 2001 (which includes those admitted to the NH Bar at the last swearing-in in May), McLane, Graf, Raulerson & Middleton is the biggest firm in the state, employing 70 NH attorneys, compared to its third-ranking 55 attorneys five years ago. Not far behind is Devine, Millimet & Branch, which retains its second-place spot with 66 NH Bar members, including a few in its Andover, Mass. office – four more total lawyers than it employed in 1996. Sheehan Phinney Bass + Green, which was the biggest firm in the state five years ago with 72 attorneys, now is the third largest with 43. Many of the spokespeople for these firms, however, don’t gauge their success by size and ranking, but by their ability to maintain clients and quality attorneys. "Size alone doesn’t matter," said Mike McCluskey, executive director of McLane Graf, which ranked as the largest NH firm. "Size does allow you to do some things that smaller firms don’t necessarily have the resources for, such as investing in technology and spreading costs over a bigger client base. It gives you the resources to meet a lot of your client needs," he said. "But clients come to you in the first place because you’ve got the expertise to deal with their problems and can provide them a wide variety of services." "We don’t plan around size, but around client needs, and our size follows as a result," said Rick Strawbridge, the administrator for Wiggin & Nourie, which dropped from 50 to 35 attorneys in the last five years, making it the sixth-largest firm. Brad Cook, a senior partner at Sheehan Phinney Bass + Green, said that his firm "never set out to be the biggest" in the state. "We had 14 attorneys and were the third largest when I came here 30 years ago, now we have 43 and we’re still the third largest," said Cook. "Our goal has just been to serve our clients and put out the best product we can." In other words, size doesn’t matter. But growth – or decline – in the state’s bigger law firms is often indicative of the trends influencing NH’s legal landscape overall. Market changes In the past five years, the state’s law firms have seen more competition from outside entities, including accounting firms and financial institutions, as well as multi-state law firms. "Competition for clients has become quite aggressive. Law firms from outside the state – from Boston, Rhode Island, Maine – are beginning to open firms here," said Susan V. Duprey, the president of Devine, Millimet & Branch. Included are Boston-based Nixon Peabody, the offspring of a merger with Manchester’s Peabody Brown, and the merger of Portland, Maine-based Pierce Atwood with the Portsmouth law firm Mulhern & Scott. "Out-of-state firms are creating a New Hampshire presence and are seeking the state’s best business," said Duprey. Technology has also had its effect in the past five years. The Internet has enabled clients to be more savvy, making them "more sophisticated and demanding in their needs," said Strawbridge. E-mail has given clients "more intimate and immediate access" to attorneys, which also has its demands, according to Rich Nelson, president of Nelson, Kinder, Mosseau & Saturley, a firm that has grown from 10 attorneys in 1996 to 17 today. Another challenge that has gradually become more prominent is that clients have become less apt to stick with one law firm to meet their legal needs. "Providing legal services has become more of a commodity, clients shop around rather than being firmly centered in one law firm," said Cook. "Wiggin & Nourie used to be the firm of Amoskeag Bank, now banks use any number of law firms," he said. Duprey agreed. "Clients are looking for more value-added and are more willing to move firms," she said. The biggest influence: NH’s economy Cook believes that in the last 10 years or so the changing face of NH’s economy –rather than trends in Internet use, law firm mergers and such – has had the biggest influence on the law firm landscape. Many NH-based banks and sizable companies – the major corporate clients of firms like Sheehan Phinney – have merged with or been acquired by out-of-state and national companies. Such companies often retain their own corporate counsel or hire large multi-state firms to represent them. "A lot of the larger law firms (in NH) grew up around a bank, but the banks failed in the 1990s and now there are no large New Hampshire banks," said Cook. "I used to worry about what would happen to our firm if Citizens Bank and Healthsource got acquired. Well guess what? They got acquired and we lost millions of dollars worth of business." Similarly, McLane Graf represented Energy North for 50 years, until it was bought out by Keyspan, ending the long-term legal relationship. "The size of commercial law firms tracks commercial activity. Those of us who were strongly focused on NH-based corporations that were acquired or merged have seen that impact how may people we need to service our remaining clients," Cook added. Duprey agreed that "consolidation in the business world" has been most influential on NH law firms recently. "Our clients get merged into or purchased by larger companies and their legal work ends up getting exported out of state," said Duprey. Because of mergers and acquisitions, "local businesses don’t have local decision-makers," agreed Nelson. Evolving with the changes In the face of these challenges to their viability, the big NH firms are adapting to keep themselves competitive. Sheehan Phinney, for example, has managed to remain among the top three biggest firms in the state despite the loss of its major corporate clients and corresponding drop in its attorney numbers. In fact, Cook said that his firm is "more profitable today than in a lot of the years when we had 70-plus attorneys." He credits the firm’s ability to adjust its size to maximize efficiency – in other words, adjusting attorney numbers to meet client needs. More importantly, the practice areas of these firms must evolve to meet client demand. McLane Graf’s corporate transactions now focus on small to mid-size businesses, while its litigation practice, high-end trust and estate planning and employment law have become growth areas recently, said McCluskey. Sheehan Phinney’s securities group is now smaller than five years ago, while its litigation department has become more active and profitable, particularly custom and corporate litigation, according to Cook. Duprey said that litigation work in intellectual property, employment, and mergers and acquisitions has grown considerably in her firm, as have new areas of practice related to high technology, telecommunications and government relations. Nelson Kinder’s biggest growth area has been large construction litigation, with employment litigation and out-of-state – even international – litigation on the rise as well, according to Nelson. Wiggin & Nourie has undergone a "major restructuring" since 1996, after its key NH bank clients disappeared through mergers and acquisitions, said Strawbridge. The firm dropped down to about 30 attorneys, but has rebounded in the past year, adding a few lawyers to its ranks. The restructuring has included the firm’s shifting its focus: Its major cases now are national automotive class-action suits. Wiggin & Nourie’s corporate department, which shrank following the departure of its bank clients, has begun to grow again, Strawbridge said. McCluskey believes that the trends in law practice tend to offset each other. "When general corporate work is booming, for instance, bankruptcy is slow. There are counterbalances in the practice of law," he said. Survival tips When it comes to surviving the ever-changing environment of the legal profession, the big firm representatives have several suggestions on how to remain successful in good times and bad. The most simple: Pay attention to client needs. "You need to be attentive to clients, to know them and listen to them," said Duprey. "You need to deliver the services they want, not necessarily what you think they need," she said. "Organize your firm around the needs of your clients. As their needs change, so should the offerings of the firm," agreed Strawbridge. Another key piece of advice was to be flexible in terms of practice areas, evolving to meet market demand. "Changes in the local economy drove us (large law firms) to change, it forced lawyers to be careful not to be over-dependent on one sector of business," said Duprey. "If you focus on one area or specialty, that puts you at risk. If it gets wiped out or the regulations change and that part of your practice goes under, then where are you? You have to be diversified," she said. McCluskey advised that law firms should "be aware of market trends and focus on those areas that are viable." "We’d love to represent large corporations, but they aren’t here in NH. Your practice should reflect the marketplace," he said. But diversification shouldn’t mean lack of specialization. The large law firm attorneys believe that firms should play up their strengths. "We try to focus on our areas of strength. We try to do what we do well and turn away stuff that we’re not good at," said Nelson. Cook believes there are key principles that firms large and small should live by, regardless of the changing legal environment. "Be flexible. Do good work all the time. Be attentive to clients and provide good service. Be loyal to your clients. The practice of law is a profession and a service, none of these key things have changed in a couple hundred years," said Cook.
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