Taking on Big Law: Small Law Firms & Solo Practitioners Are Competing in the Big Leagues

Topics: Canada, Client Relations, Efficiency, Law Firm Profitability, Law Firms, Leadership, Small Law Firms

small law

Today, there seems to be a renaissance in small law firm space, says a new article in Canadian Lawyer magazine.

The article, by columnist Jim Middlemiss, notes that despite all the attention directed toward large law firms, the reality is that most lawyers work at firms of 10 or fewer lawyers, according to 2016 statistics on law firms from the Federation of Law Societies of Canada, and solo practitioners dominate the landscape, followed by firms with between two and 10 lawyers.

Simply put, small and solo practitioners make up the heart of the regulated profession, and they will tell you that heart is beating strongly, the article states.

“There are more small boutiques opening up, particularly in the litigation world, which is where I practice,” says Kathryn Manning of DMG Advocates LLP in Toronto, a six-lawyer firm. She notes that “big firms” are expensive, and that makes it challenging for litigators who are starting out their careers to bring in a steady array of business and build a book of clients. Billing rates are high and can only support bet-the-farm types of litigation, she says.

Small and solo practitioners make up the heart of the regulated profession, and they will tell you that heart is beating strongly.

Further, the article points out that a time when Big Law’s growth is stagnant, small firms continue to hold their own. According to figures from the Law Society of Ontario (LSO), in 2017, law firms with more than 51 lawyers constituted 19.7% of licensees, down from 21% in 2013. Firms with two to 10 lawyers inched up to 31.7% from 30% in 2013.

The breakdown is similar in other provinces. In B.C., for example, solo practitioners account for 71% of law firms, while two- to five-lawyer firms account for 21%. And in Alberta, there has been a growth spurt in small firms. The number of lawyers practicing at two- to 10-lawyer firms has grown to 2,960 at the end of October from 2,054 practitioners in 2017. The number of solo practitioners has also bumped up in that province.

Skeptics might say the growth in smaller firms is because business is slow at big law firms and they are shedding people. New graduates are also forced to go out on their own. That’s partly true, says Michele Ballagh of Hamilton intellectual property boutique Ballagh + Edward LLP, and who is part of the LSO’s Coach and Advisor Network, which mentors lawyers. She notes that some graduates start their own firms, but it’s not easy, noting it takes up to five years to learn to practice law after being called to the bar. Then there’s the challenge in learning to run a business. It’s easier, she says, when you “have a book of business.”

Probably the biggest change that solo and small firms have seen recently is the type of work they take on. What used to be general practices that dabbled in a range of legal issues have become honed and finely tuned law firms with a focus on specific practice areas.

Check out the full article here, and the latest issue of Canadian Lawyer here.