New role, new challenge
Dennis Unkovic, chairman of Meritas, has big plans for the network
In September, Pittsburgh attorney Dennis Unkovic donned a helmet, attached himself to a harness at the top of the Oliver Building in Downtown, and proceeded to rappel down its side. While the rappelling was part of a fundraiser for charity, it reinforced Mr. Unkovic’s image as someone not afraid of adventure.
His new role as chairman of nonprofit attorney network Meritas won’t have him jumping off buildings, but Mr. Unkovic is treating it as a challenge nonetheless. For regional law firms, competing in a global arena with giant, wellheeled firms can seem a daunting challenge indeed.
“You need to have access,” Mr. Unkovic explained, which firms with offices in numerous countries can provide. His firm, Meyer, Unkovic & Scott, has been part of the Meritas network for more than 10 years, which puts it among 7,000 lawyers at 174 law firms in 228 markets.
Minneapolis-based Meritas acts as a kind of guild for regional law firms, allowing them to connect with other firms in order to pursue cases that may span several geographic areas, and make them more attractive to international clients.
Meritas itself is a medium-sized network among the two or three dozen legal networks in the U.S. Larger ones include Lex Mundi, which lists more than 21,000 lawyers and 160 member firms, and World Services Group, which has 130 member firms. Both of those networks are based in Houston.
“Being a member of Meritas levels the playing field, especially in an age where the legal industry is changing from a seller’s market to a buyer’s market,” said Tanna Moore, Meritas president and CEO. “The pressure for legal services at lower prices is attracting nontraditional services into the industry, making it more competitive than ever.”
Law firms are granted membership to most networks only by invitation, and Meritas members have to agree to adhere to its quality assurance guidelines. Mr. Unkovic said Meritas law firms pay annual dues including a per lawyer fee, but the fee is capped to keep dues in a reasonable range, and to avoid penalizing firms with larger numbers of lawyers.
Research by Wellesley, Mass.based BTI Consulting Group shows that over the past five years, many companies have trimmed their use of outside legal counsel in an effort to control costs, particularly during the height of the recession. But Mr. Unkovic said that although he thinks companies remain cost-conscious, if the inhouse counsel can demonstrate using an outside firm would provide value to a company, it’s likely to take the chance on a regional firm.
“A Meritas firm can give you the resources of a big firm without having to pay for a big firm,” he said. “It’s the advantage of a network: The client doesn’t have to absorb the firm’s overhead costs.”
Mr. Unkovic said one of the first things he wants to do as chairman is impress upon the members that they need to be better advocates for the organization.
“We need to do things besides market to other lawyers,” he said. And, he hopes to hold more member meetings outside the U.S. so that the organization is truly global.
“Dennis has served as a leader within Meritas over the last 10 years as a board and executive committee member and in building Meritas’ Asian membership,” Ms. Moore said. “He understands firsthand the dramatic changes in the legal industry.”
Like their larger counterparts, small and midsize law firms are facing escalating scrutiny from clients over their efficiency, project management and costs. But not all small and midsize firms are reacting in the same way.
Although some firms still depend mostly on partner know-how when it comes to things like staffing and pricing, others have started to increasingly track their data and rely on management-focused professionals.
McNees Wallace & Nurick chairman David M. Kleppinger said it’s a buyer’s market for small and midsize firms, and client expectations regarding responsiveness, value and predictability have only grown. Tracking case data, Mr. Kleppinger said, has become increasingly important in creating predictability for clients.
“You have to use the data,” he said. “You need to segment a particular project or case that comes in the door to be able to identify which steps to take, and how much investment needs to be made at each step.”
Mr. Kleppinger said his firm has started educating lawyers on legal project management and budgeting services. But, so far, the firm has not turned to an exclusive professional, either inside the firm or outside, to address pricing.
When the 20-lawyer firm Fowler Hirtzel McNulty & Spaulding formed last year, John R. Sparks Jr., an attorney who hadn’t practiced in several years, was brought in to lead the firm’s quality programs, associate training and business development.
His role is to quickly figure out problems and the desired outcomes, whether that be going to trial or settling, and figure out how to get to that point as efficiently as possible. The clients’ responses to that approach have been positive, he said.
“I think our clients, to be fair, are happy to see that we’re showing this kind of commitment to” quality and efficiency, he said.
Mr. Sparks agreed focus from clients on case management has only grown, and said firms should try to measure everything that clients are paying attention to, such as total case cost and how long certain types of cases are generally in progress.
“Everybody’s being compared, so you want to make sure you’re running things efficiently, and coming to resolutions as thoughtfully and promptly as possible,” Mr. Sparks said. “We can talk anecdotally, but the tools are out there now to measure it objectively.”
Along with the rise of project management and pricing metrics, many firms reported an increased use of alternative fee arrangements.
Alternative fee arrangement and retention agreements are on the rise, Barley Snyder managing partner Jeffrey D. Lobach said, citing examples such as bringing lawyers on-site with clients, providing annual retainer services for a client, or charging result-oriented fees.
Mr. Lobach said the firm is utilizing its marketing department and research functions to help hammer out fee arrangements with clients.
S. David Fineman, president of Fineman Krekstein & Harris, said that, from time to time, his firm uses nonlawyer business professionals to help with aspects of business management. And that is likely to increase across the small and midsize market, he said.
“Everybody has to become acclimated to that,” Mr. Fineman said. “It very well could be that we’re going to have nonlawyer partners.”
Louis J. Rizzo Jr., managing
partner of Reger Rizzo & Darnall, agreed that the pressures from tightening legal budgets are being felt at the small and midsize level. But he said these pressures are nothing new.
Small and midsize firms have “been dealing with those issues long before the last seven years,” Mr. Rizzo said.