The big opportunities in the legal profession are at small firms

Back when feuding couples had equity in their homes and investments worth fighting over, Scott Sagaria made a good living as a divorce lawyer.

But the recession cut deep into his family law business, causing the San Jose practitioner to redirect his talents. Now he makes a good living as a bankruptcy attorney.

Like solo and small boutique law practitioners across the country, Sagaria has been better able to adapt to a shifting legal landscape than Big Law firms that had to shed more than 4,600 lawyers nationwide last year.

In an inverse demonstration that size matters, small firms able to quickly reinvent themselves have benefited despite shrinking spending on legal services and a more demanding clientele.

“It’s been easier for us in the sense that we were able to change focus pretty rapidly, to adapt to what work was available to us,” Sagaria says of the practice, which he opened solo in 2001 and now has seven other lawyers from San Diego to Portland, Ore.

They’re open Saturdays. They offer payment plans in the place of up-front retainers. Decisions don’t need to be run past a task force or partnership committee.

Boutiques are flourishing in the current economic climate because they deal on a more personal level with the legal consumer and they tailor services to individual needs, legal analysts say. Smaller firms also have less overhead and can be more flexible and affordable, they said.

“Clients perceive that they will get more efficient legal services and more bang for their buck in the context of a small, more agile firm,” said Scott Kalt, a founding partner of an 11-lawyer practice that opened in January after breaking off from a Century City firm with 150 lawyers.

Melissa Wolfe and other legal recruiters say attorney placements over the last year were almost exclusively with small firms able to market the Big Law defectors’ experience at more consumer-friendly prices.

“I liken it to the dot-com experience. Some of the big firms went overboard, charging upward of $700 an hour, and when the economy changed, their clients were no longer in a position to pay that,” Wolfe said. “The rainmakers left and started their own firms. One told me he tells his clients, ‘I’m not any dumber but now I’m $400 an hour less.’ ”

Employment law, bankruptcy, real estate and family law -- practice areas most affected by the recession -- have long been the preserve of small firms and solo practitioners, said Richard Hermann, who teaches a legal career management course at the online Concord Law School and spotlights recession-driven opportunities in his recent book “The Lawyer’s Guide to Finding Success in Any Job Market.”

“A large firm is a bureaucracy. Trying to change things there is like turning around a battleship,” Hermann said.

While traditional family law practices may be struggling, flexible and far-sighted practitioners have targeted the underserved emerging market of nontraditional family law, he said, including international adoption, surrogacy and the legal needs of single-parent households and same-sex couples.

Such changes in the legal market have lifted Little Law into the largest and fastest-growing sector of the legal community, said Laura Farber, a partner at a 23-lawyer firm in Pasadena and vice chair of the American Bar Assn. division that monitors trends among small firms.

That boom has inspired troubleshooting and self-help networks, she said, including the ABA-administered www.SoloSez.net, which trades tips and advice on running a small law business.

Although the ABA doesn’t keep figures on the number of members moving from Big Law to solo or small practice, the recession has noticeably accelerated the migration, Farber said.

So, she said, has a preference among young lawyers to create a better work-life balance than that experienced by associates struggling to stay on a partnership track at the huge corporate entities of the American Lawyer 100, firms with as many as 4,000 attorneys.

“Over the years that balance was made virtually impossible unless you didn’t want to sleep,” Farber said of attorneys’ quest for meaningful practice, community involvement and quality time for home and family.

“At a small firm, it’s a very dramatic difference,” she said. “For those of us who have children, a spouse, other interests, it makes it much more fulfilling to practice in this kind of environment.”

Law firm marketing consultant Stephen Fairley attributes the defections from Big Law firms to boutiques to attorneys’ recognizing “the path to riches is through niches.”

“The age of the generalist is dead. Our clients are requiring us to know more and more about less and less,” said Fairley, chief executive of the Rainmaker Institute in Phoenix. “Everyone wants to be treated by a specialist.”

carol.williams@latimes.com