Entrepreneurial, independent, nimble: smaller firms can thrive

Smaller firms that play to their strengths can be highly successful, but there’s no hiding when the structure is flat and efficient.

Smaller firms offer young lawyers plenty of contact with partners and with clients giving them a sense that they are making a difference as well as building a career.

Smaller domestic firms playing in big-league markets can carve out remarkable success if they are smart and well-structured.

At 16-partner Swaab, one of the smallest in The Australian Legal Partnership Survey, that pattern was set by its late and much-loved founder Fred Swaab.

Headcount is tight by choice, the lack of expansion beyond Sydney is also by choice.

“We are nimble, we can do whatever we want, there is a relative lack of red tape and we are only accountable to each other,” managing partner Mary Digiglio says.

“When we are approached about mergers and joining a bigger organisation it’s what always stops us – that we would lose our autonomy. We would become a part of a bigger picture; as it is now, we are the whole picture.”

One city block away from Swaab sits Addisons, which has grown from 12 partners to 21 in the decade since managing partner Kieren Parker joined as a senior associate. All partners have equity and a third of them are women.

At smaller firms, independence is essential at every level, he says. “Partners and their teams are trusted to run their practice and have a good deal of autonomy,” he says.” You can be both nimble and entrepreneurial and still remain a trusted, long-term adviser for clients.”

That holds for both firms: Digiglio joined Swaab in her early 30s from HWL Ebsworth, having been a partner at Ebsworth & Ebsworth when that firm merged.

Mary Digiglio, managing partner, Swaab lawyers.

She found her existing clients undaunted by her move to a smaller operation.

“The message was ‘we give you the work, it’s up to you how you choose to resource it and whether you are using affiliated firms or firms you are not financially integrated with’. My clients have stayed true to that,” she says.

Parker argues part of the value proposition for clients is “engaging lawyers who are at the top of their game without paying for big infrastructure or harbour views”.

Both firms often find themselves across the table from top-tier lawyers in matters, so don’t regard size as an impediment to gaining and retaining high-quality, interesting cases, nor from operating beyond Australian shores: Addisons has international clients of many years standing and Swaab is a longtime member of the Meritas global alliance of independent law firms.

Part of the value of the Meritas network is that it sweetens the offer to prospective recruits for whom the potential of working overseas is important.

Swaab has dropped by one partner in the past year, so in the market-wide fight for talent the imperative for smaller firms is to play to their intrinsic strengths.

Parker regards the argument for young lawyers to sign as compelling. “We typically operate in small teams and all lawyers have a high level of interaction with partners and clients daily, so it’s an environment in which younger lawyers have plenty of opportunity to develop,” he says.

That extends to partners wanting to qualify for equity partnership: at Swaab, six of its partners have equity and three of them are women.

Kieren Parker, managing partner, Addisons.

“We can invest in emerging partners who wouldn’t be given an opportunity to be a partner at a larger firm because their practice size wouldn’t justify it,” Digiglio says. “We can give them an opportunity – not just pay lip service – we can give young partners a platform and then facilitate the support they need to succeed.”

For her, this adds up to the chance to “make a difference”, which is what attracted her to Swaab. She defines its culture, framed by the founder, as “generosity of spirit”, the understanding that lawyers there “can use their privileged position in life to do a lot of good and give a little bit of ourselves”.

Beside the clear advantages of being a small firm sits the imperative to run a tight ship. “From a business point of view you cannot run with every idea,” Parker says. “You need discipline to focus on what is important for our clients and meaningful for our staff.”

With a lean headcount and a flatter structure, there are no cushy gigs for the higher-ups.

“You work harder at a smaller firm at a number of levels,” Digiglio says. “You are the firm. So if you want all the benefits of a smaller firm, then you’ve got to put the hard yards in as well. There are only so many people you can leverage off. The smaller the firm, the less you can hide.”

If she was a punter, she would bet on the appearance of more small firms. “I think Covid probably has exposed some people to an environment of more self-management, a realisation about what you can achieve with minimal resources and infrastructure,” she says.

At Addisons, Parker says the purpose of a decade’s growth has been to develop “a depth of practice”. Now, “we have the luxury of growing more strategically”, he says. “It is time to raise the firm’s profile.”