Lawyer Incentives

by a professional from Duke University

4 months ago

We closed a ~$25 million transaction this week.
It was intensely negotiated with opposing counsel being the type of big law PE attorneys I’m used to seeing from my Kirkland/big law days.
Over the last two years, focusing on SMB and independent sponsor work, we’ve had to retrain ourselves.
In the big law hourly billing world, deals were worked to the bone, extracting every last conceivable bit of value (and time).
Our clients in SMB and independent sponsor work have been clear: they don’t want that.
They want us to protect their interests, tell them what they need to know, move quickly, and then get out of the way.
This is why we bill flat fees instead of hourly.
It's incredible what financial incentives do to a person’s mentality.

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2 comments

searcher from Grantham University

Eric, even with the flat fees, how flexible is your team with negotiating terms? Many firms are still operating out of the old business model and only wanting to build relationships with companies with deep pockets. That's easy for any firm to do. But how many are willing to TRULY build with smaller businesses when their pockets aren't deep?

3 months ago | like reply | 0 likes

investor from Columbia University

For ex-biglaw M&A lawyers working on search fund, independent sponsors or other lower middle market deals, many would benefit from some "retraining". In the current interest rate climate, have run into K&E and many other big law firms scooping down into single digit million dollar deals. In some cases, they've done so with disastrous results, Most big firms are not built in a manner that works well for smaller deals.

4 months ago | like reply | 1 like

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