Complex Litigation Services (Part 5): A Complex Litigation Competitor with Sane Rates—How Hilgers Graben Has Done It
Over the course of this five-part series on complex litigation, we have defined what companies need when they buy complex litigation services (Part 1), typical marketplace options (Part 2), the pros and cons for virtual firms (Part 3), and why Big Law hourly rates are so high (Part 4).
Now we come to the real question: Is it inevitable that law firms selling complex litigation services have such astronomical rates? If you have read this far, you hopefully agree with us that the answer must be “no.”
None of the cost drivers at big firms—high talent costs, high overhead, competition over profits per equity partner—are complicated. Nor are they challenges that have not been solved in other industries.
Still, to build a true competitor to Big Law and the stranglehold on complex litigation services, it takes a deep understanding of the market, a pioneering spirit, and the courage to be different.
We have done just that at Hilgers Graben, and below we walk through how we are able to offer the same services at a fraction of the cost for our clients.
The big cost drivers at law firms are the high cost of talent, the geography tax, the high overhead, and the profits per equity partner model that drives high hourly rates tied to yearly lockstep rate increases. At Hilgers Graben, we turn all of this calcification of the legal business model on its head.
First, we tackle high costs through our “hub and spoke” system. To start, we have a centralized “hub” in a low-cost location—Lincoln, Nebraska. Our hub location is a brick-and-mortar headquarters, where we house a number of talented attorneys, our paralegal team, and our administrative team. This enables in-person collaboration, training, and connectivity. The exceptionally talented lawyers in Lincoln are often recruited from larger cities; the Lincoln office is comprised of a bevy of former federal court clerks (including the 3d, 9th, and 10th Circuit Courts of Appeals), alums from top schools (like the University of Chicago Law School, Columbia Law School, and Stanford Law School), and attorneys from AmLaw 50 firms like Gibson Dunn, Irell & Manella, Kirkland & Ellis, and others. These lawyers could work at just about any big firm in the country.
While the lawyers in Lincoln handle cases in Nebraska and surrounding states, they also support cases around the country led by attorneys in the firm’s “spoke” cities—major metropolitan areas in which the firm has equally talented attorneys (typically senior lawyer refugees from Big Law) who are on the ground and able to go to court and visit clients in person. We have a growing list of spoke cities from coast to coast, including San Diego, Dallas, Atlanta, Miami, Washington D.C., and more. These lawyers typically are senior (10+ years), often with first-chair trial experience, who know what is required to lead a complex litigation matter.
Second, we have jettisoned the typical profits per equity partner model that emphasizes short-term thinking. We also reject the “eat what you kill” model that only rewards originations and creates unnecessary anxiety and disincentives for lawyers. Instead, we rely on a strong compensation model that provides safety, security, and peace of mind to our lawyers and their families, while adopting an innovative reward system that allows our lawyers to capture the upside of the firm’s economic success. Doing all of this without getting caught up in the PPP rate race benefits our talented lawyers as much as it benefits our clients.
Third, we have adopted critical internal business mechanisms and processes, while emphasizing a “no jerks” culture of growth that helps drive down costs and create real value for clients. The firm has consistently executed smart business practices that any Fortune 500 CFO would recognize and applaud. A few examples include:
- Extraordinary time entry hygiene and discipline, which allow us to submit our invoices on the first day of each month, creating greater predictability for clients and more financial stability for the firm;
- A cash-based and retained earnings model that does not rely on debt or a line of credit to fund day-to-day operations and allows for strategic deployment of capital where opportunities are present;
- A nimble decision-making structure, with a CEO (our talented and experienced former three-time general counsel, Sterling Miller), as well as true department heads who focus on improving their departments instead of spending all of their time in their departments trying to put out daily fires;
- A people-first recruitment and retention model that invests time and resources into growing attorneys, coaching them, giving them new opportunities, and building on retained talent instead of the money-losing and client-last cycle of constant attrition.
How does this map onto the ever-spiraling cost cycle that we discussed in the last blog post? By leveraging the lower costs in our Lincoln-based headquarters, both for talent and for office space, our firm dramatically drives down overhead expense. In addition, where we have office space in large cities, strategically chosen locations with a much smaller footprint than other providers reduce costs even further.
At the same time, by creating a new and innovative approach to sharing upside from our firm’s success, we have not gone down the road of Big Law compensation models. By doing so, we have avoided the war of talent attrition that comes with the limited number of new equity partners made at big firms, and, instead, have created a lasting retention model that snowballs value to our attorneys over time.
Powering this innovative model are the internal culture, processes, consistency, and approach of a well-run business.
The result? Dramatically lower billable rates, where we avoid the vicious cycle of raising rates in lockstep every year, and the flexibility to offer true Alternative Fee Arrangements, providing real innovative pricing options for clients.
In a previous post, we walked through a checklist of what a law firm must be able to offer to handle complex litigation on a nationwide scale. It is one thing to have lower costs, but a law firm must be able to provide high-quality service as well.
Can Hilgers Graben truly provide these complex litigation services at a significantly lower price point? The answer is a resounding “yes.” The firm has nearly 150 professionals around the country between its litigation group and its “Edge” discovery counsel team. Over the past several years, these lawyers have worked on some of the most difficult cases in the country.
Let’s walk through the checklist:
- Lead trial lawyers? The firm has elite trial talent, including its National Trial Counsel Mike Merriman, Alec Schultz, Alice LaCour, and Grant Schmidt. These lawyers know how to win cases in front of a jury.
- Experienced Complex Litigation Junior Partner / Senior Associates? Yes. Hilgers Graben has a number of talented attorneys who fit this role, coming from firms like Jones Day, Hogan Lovells, DLA Piper, Gibson Dunn, and other elite firms.
- Qualified Complex Litigation Associates? Yes. Hilgers Graben has an incredibly strong group of associates, from top schools and law firms, many of whom are former judicial clerks, that supports cases around the country.
- Qualified Litigation Paralegals? Yes. Hilgers Graben has outstanding paralegals. Led by the head of our paralegal team, Danika Davis, the accomplished group is primarily based in Lincoln but supports cases nationwide.
- Litigation Team Scalability? Yes. The firm has litigators around the country, in our hub and in our spokes, who can handle virtually all the needs of a case when it expands.
- Geographic Scale? Yes. The firm has locations and lawyers in over a dozen states (including major metro areas like San Diego, Chicago, Denver, Atlanta, Dallas, and Miami), and can practice in over 25 states, including Hawaii.
What about the discovery roles so critical to taking on a complex litigation matter, roles that are often doled out to a second firm or vendor to handle? Here again, Hilgers Graben leads the pack, providing its clients with a vertically integrated “Edge” discovery counsel team:
- Litigation Support Specialists? Absolutely. The firm has a team of specialists able to help handle the data side of eDiscovery.
- Discovery Review Team? Yes. We have a deep bench of experienced review attorneys who have worked on some of the most challenging cases in the country, and who have, time –and –again, used their capacity to handle massive surges of work.
- eDiscovery Hosting/Processing Capacity? Yes.
- Integrated Discovery Counsel? Yes. Our Edge team is integrated vertically, i.e., it covers all parts of the EDRM model (from collection to production of documents) under one roof. At the same time, the firm is horizontally integrated too. Our teammates are not temporary staff attorneys who cycle off matters with regularity. We have attorneys who stay long-term and get to know clients’ documents and data extremely well, allowing for that knowledge to spread “horizontally” across cases.
We hope you have found this five-part series on complex litigation interesting and illuminating, and that we have been able to peel back some of the “black box” nature of the current pricing structure. At Hilgers Graben we have not set out to reinvent the wheel; we want to smash it because—as we have shown— complex litigation pricing is based on upside-down economic drivers, resulting in insane rates that climb every year.
Clients deserve more. They deserve high-quality lawyers with deep litigation experience and national reach, solid bench support across the board, and an innovative integrated eDiscovery process that ties into what the trial team needs, all at an affordable price. As hundreds of clients have and are learning, that’s exactly what we offer.
Interested in learning more? Reach out to [email protected].