Enviro Boutiques Get Boost From Climate Work

By Erin Coe

Law360, New York (September 02, 2008) -- As more companies seek to address climate change and alternatives to oil, the growing demand for legal expertise is giving environmental boutiques a leg up on full-service firms.

Although boutiques are not able to get internal client referrals like larger firms, they are often successful at pulling in clients by charging more affordable rates. And it does not hurt that a wave of new work in the environmental field is coming their way.

Concerns over global warming and alternative energy sources are already helping to boost the market for boutique firms, according to Peter Zeughauser, a principal of legal consulting firm Zeughauser Group.

“Environmental law is becoming more integrated with a full suite of natural resources practices. As oil prices have gone up, global warming has grown more important and it has had a favorable impact on environmental law and demand. And the more demand in the market, the more boutiques can prosper,” he said.

Larry D. Silver, who left Duane Morris LLP in 2003 to become a name partner at environmental boutique Langsam Stevens & Silver LLP, said his firm is swamped with work even as the economy flails.

“We’re struggling to get all the work done. Big companies are faced with a downturn and they are looking for lower billing rates, and that favors smaller firms,” Silver said.

His Philadelphia-based firm, made up of 11 lawyers, has seen a surge of business involving toxic torts, zoning and land use, and issues related to the Comprehensive Environmental Response Compensation and Liability Act, according to Silver. When he worked at Duane Morris, Silver said he noticed that some of his midsized clients were unable to afford the billing rate and that environmental lawyers were under constant pressure to meet the firm’s billable hour requirements. He said these are reasons why boutiques will continue to have an edge on big law firms.

“Boutiques have lower overhead and they charge less for the same quality work,” he said.

Big law firms, however, have the advantage of drawing on more resources to develop relationships with significant clients that need lawyers for a variety of services.

But Zeughauser said both full-service firms and boutiques are having a hard time holding on to clients because competition is fierce.

“It’s all about talent, service and value for the dollar,” he said.

With new laws on climate change on the horizon, Joseph M. Manko, partner at 28-lawyer boutique Manko Gold Katcher & Fox LLP, admits that it is difficult to figure out how to best position the firm on matters dealing with energy and land development. “I think the only challenge is being able to stay up on the law and see it coming before it happens. The whole climate change issue is going to be groundbreaking,” he said.

Manko had previously worked at WolfBlock LLP for 25 years. He said he left with his full staff of lawyers to form the boutique in 1989 in order to expand his practice to include an environmental engineering component and in an effort to retain talent.

“I was having difficulty retaining staff in the big firm. Big firms have all kinds of political problems that have nothing to do with the practice,” Manko said.

He said despite a rocky economy, his firm has managed to increase its market share thanks to its specialty focus on areas including brownfields, refinery capabilities, chemical and petroleum regulations and waste management for clients like Liberty Property Trust, a $6 billion real estate investment trust.

“The only way to remain independent is by having a specialty that is highly regarded and needed. Judging from the last 20 years, I think we fit that,” he said.

Compared to major law firms, boutiques do not have to deal with as many conflicts, and they allow for greater flexibility in terms of the clients that they are able to represent.

Silver said he has been able take up work for environmental groups without having to worry about conflict issues. He said he recently obtained a favorable Pennsylvania appellate decision for an environmental organization that was hit with a Strategic Lawsuit Against Public Participation for allegedly interfering with a development project.

“But I also represent developers. I don’t have to be on one side or the other like I would at a big firm,” he said.

Zeughauser said boutiques can stay competitive by raising their profile through traditional marketing and business development activities, like speaking at events and being involved in industry groups.

He also said boutiques have to be aggressive in developing referral sources, such as with another litigation boutique or a smaller corporate firm that does not want to lose its clients to a full-service firm.

Manko said his firm has assisted law firms that do not have an environmental practice.

“They know that we are not trying to take their client over,” he said.

He added that his firm started an environmental law network 15 years ago as a way to connect boutiques throughout the United States and Canada and to refer clients.

James A. Payne, an attorney at four-lawyer boutique The Environmental Law Group Ltd., said he is already starting to deal with climate change issues for his clients and expects to guide them on greenhouse gas regulations coming down the pike.

Payne and the other attorneys established the Minneapolis boutique in 2000, a few years after Popham Haik Schnobrich & Kaufman Ltd. — the larger firm they were working for — fell apart and was picked up by Oppenheimer Wolff & Donnelly LLP.

“We wanted to provide services in a small firm without having the continual pressure to raise fees,” Payne said. “Keeping our fee structure reasonable helps when we represent big public institutions, like universities and airports. We offer rates they are more capable of paying.”

When asked whether he would consider working at a large firm again, Payne, like the other boutique attorneys, said he would not trade the flexibility he got from working at a boutique.

“Our philosophy is that it’s not just about practicing law — it’s about teaching, writing and serving on community boards,” he said on behalf of his firm. “We formed a firm to provide excellent service to clients and give us the freedom to be good lawyers and community members.”