The Types of Clients that Firms Work for Depending on Firm Ranking

So the first thing is the types of clients, the firm's work for dependent and firm ranking, and, and essentially we're talking about the ability of clients to open a spigot and pay endless legal bills, meaning they can get bills of all sorts of things and the client, all sorts of amounts and the clients will be happy to pay them.

And at rank one firms, you can see here how it works, and I'm not gonna go into a ton of detail, but obviously if you're at a very low rank firm, the clients are paying small amounts of money for services, if anything, and the higher up go, the more money clients are willing to pay. And that's where, when you start getting into your four and five break.


That's when you get your high market salaries, that's when you get your bonuses for hours. That's when all this stuff that goes along with practicing and the highest firms happens because those clients can open and pay endless legal bills. And, and this is really what most people, a lot of 'em are after the problem is as you.

And [00:01:00] I'll talk more about this later, of course, but as you move up, the, these levels, your contact with a client gets more and more remote. The happiness of advising someone directly and, and so forth goes away. So it's not, these are not all great things. And again, some of the most successful attorneys I know are working at rank.

One firms, obviously anybody that starts at McDonald's is doing very well or has, or McDonald's is a very beer one, a very successful company. Amazon is an extremely successful company appeals to everybody. It doesn't, it's not luxury goods, retailer. It appeals to everyone. So it, it just depends on the type of device.

Sophistication of clients is again, is important. So the client's, the more sophisticated of the client is obviously the more sophisticated the attorney work in there has to be. So at your highest level, there's going to be all sorts of people reviewing their work. They're gonna wanna see, they're gonna wanna know that the law firm has the very best people working there, or the very best qualifications the clients are going to have, be making lots [00:02:00] and lots of money and, and expect their attorneys to be top not.

At the lowest of the, of ranked firms, the most of the clients probably wouldn't, they may have heard of Harvard law school, but they're not gonna really know anything about the quality of your schools or they're not going, they're not gonna care. They're not gonna care. It's all about your act, your money, so forth, how much charge and whether or not the work's free for them and all sorts of things.

So the sophistication of clients is really what's happening. Obviously your four and five firms, you start getting recruiting departments and all sorts of things that are making sure that the clients are well serviced, which is all part of the middle market companies are the typically your mid-size companies, which is really in a lot of respects, the meat and potatoes of the, what the mid-size to larger firms work on.

So you can see here that when you get up into the five, most of the clients are gonna be the largest companies, the most money to spend. And that's really the point of this institutional clients. Same thing, major institutional clients means [00:03:00] that these clients will trust them with everything. And they're large clients that are just writing checks.

You could have a file from if you're working for a big company, a major law firm, that's a four or five. You could just basically pick up the file and start billing things to them. Six months after completing one matter, you, the major traditional clients are what keep the biggest firms in business. They have all sorts of issues that go along with them, because then you start getting all sorts of bureaucracy and so forth that that matches them.

But it's a whole separate, that's a whole separate kind of discussion. Institutional clients are something when you, and this actually should be, this is the slide is a mistake, but the, if you're ranking for a one or two, two rank firm, then you're typically the clients are gonna be leaving reviews on different websites and so forth.

If you're ranking for working for a four or five rank firm, it's very low, same thing with threes for the most part, but this is because of their, how close they are to consumers. And so that's why it's just something to understand. The closer you get to [00:04:00] consumers, the more the consumer has a voice at a rank five firm.

They may not even the clients may not even wanna know that, that aren't, don't really have time for that. And this is another thing here. And again, there's another mistake here. This rank four should be high, but the, the rank one, there's the very lit chance that anything's gonna be reviewed by an outside attorney or general counsel.

And then when you get into rank four and five, this should say highest or high rank for rank four. It becomes a very high odds that we worse gonna be reviewed by an outside general counsel. And that just means that the quality of work has to be much higher as, uh, if, if the work is being reviewed by an outside general council, that means they don't wanna, if they see typos, they're gonna hit the roof.

If they see mistakes, they're gonna hit the roof, they're gonna wanna know, worked on their matters. And outside general council is just a kind of a note to show you that, that other people that are reviewing the firm's work, that the client is knows what's going. So as you move up the chain, it gets much higher.

This is the [00:05:00] likelihood that the clients will not pay negotiate bills, rank one firm's attorneys and rank one firm and even rank two firms. A lot of times we'll say we'll send the bill and they're happy if they collect 60%. And if they're getting 80%, they're doing really well as you go up the ladder in terms of, or down the LA up the ladder in terms of prestige level or down, however you view it.

They, you get a lot of negotiation and, and so forth. And the bills. Now it's not to say that rank four firms won't reduce their bills and so forth. It's not to say that rank five firms don't do that on occasion, but the, for people that are represented by rank five firms typically do not do a lot of negotiation compared to rank two firms or even rank three firms.

Those firms are getting a lot of pushback on their bills. They have to be very careful. They're writing off a lot more time. And so what you get and what the benefit of moving up, if you're a law firm of kind of moving up, this chain is more respect for the firm, less negotiation, more likelihood, the bills will be paid.

Now that's not to say that they're not, [00:06:00] but because you're working for deep pocket of people that are paying you very high rates and so forth, they're more likely to do that. So this has a lot of implications for employment security of all sorts of things. And it's something obviously to keep light and is another one here.

They, this is caring more about attorney quality than cost than you can see here, something that we've already covered, but it a rank five firms, the firms are much more likely to care about the quality of the work than they are cost. I've seen instances I was talking to, I don't know an attorney, I don't know SRO, uh, not too long ago, which I would consider five firm.

And they were upset that as a ninth year, the client was insisting that they do document review to look for privileged documents or something in, in a matter, and really was happy to pay that rate. And it was something where they had to review the documents every day for, and report them or something I don't to, to some government agency.

But the point is that the, at the highest level, the law firm, the clients care more about the quality [00:07:00] than the cost, and they become much more cost sensitive as you move up the line. And here again is the educational pedigree. So the clients are gonna be very start getting concerned about your educational pedigree.

When you're at a rank three firm that at the rank far four firms, it's very high. They, they do. For the most part care about it and that the clients are smart enough to know the differences between schools and so forth. Most of the rank foreign by firms have in-house well, probably for the most part, all of them, but have in-house general counsel and so forth, same thing with rank three, a lot of them do so they start being very concerned about educational pedigree and the backgrounds and so forth.

They, the attorneys. And so in order to protect those relationships, you start getting very rigid, great cutoffs and concerned about quality of law school and how you did and so forth. The higher you move up, this food chain, then same thing with law schools like the clients concerned about, well, you did in law school, there's been instances where Gibson done, which I would consider a five firm has had people that were high up in [00:08:00] secretary of state.

So I think there was an instance where someone was secretary of state. This is decades ago and trying to get into Gibson Dunn. And they didn't like the fact that the, this person that had been secretary of state had gotten a C or something when they were at Harvard law school or something, some great law school like that.

So I didn't hire them because of that. So the point is these large, and I don't know that's how that firm operates today still, but they, these firms, the highest ranked firms are gonna be very concerned about how you did in law school and their clients will often ask about it because they're paying how high hourly rates.

And then again, the former prestige levels. Of your clients. So if you do switch firms at some point and you move from a one to two, the clients, aren't gonna be really concerned if you move from a two to three and there might be concern might not. But if you move from a three to a four, if you were practicing, say family law and you move to a four firm, and now you're doing commercial litigation and the client finds out about that.

They're not [00:09:00] gonna like clients are typically if they, if you have contact with the clients and tell them the firm you worked at before, and it's not a, a firm with high hiring criteria, as you move up, they may care about that. And then this is another thing here, but some of these firms often will have client more than 5% of their business.

So you can see here that as you start getting in, and this should be that one, client's more, this is not completely accurate in my opinion, this chart, but, but it, it should give you the idea that the rank one firms are very spread out. They have lots and lots of clients, maybe sometimes tens of thousands and very little business comes from one person or one client.

And as you get into, as you move up with the role here, many times they do have clients that can be more than 5% the business, and, and this could be institutional. Clients are going a lot to, so that has its own set of risk. And then this is another thing too, that's of interesting. The clients can be pulled in and ripped off by the firm, rank one firms because the client doesn't really know what's going on.

They can be, they can [00:10:00] tell their clients that they did all sorts of things. The client can be bill and ripped off. I was reading an article about a personal injury attorney in Los Angeles that for decades wasn't paying his clients, their settlements and was considered one of the top attorneys in California.

And I would say he was probably his personal injury was so ranked one firm and the client at smaller law firms typically have the ability to the clients that are working at smaller firms. The clients can be bullied a lot of times by the firm and ripped off by the firm. And, uh, and when I say ripped off means the clients can be told that different type of work is necessary or they can, they can be taken advantage of.

And unfortunately the less sophisticated the client many times, the more that that can happen. You certainly, if you're a for firm represented in a giant company, they're typically not gonna be bullied. They may get extra work, but usually there's some need for it that can be justified based on [00:11:00] the client's ability to pay.

And, but as you go down a thing, there, you get a sense of that. And then this is firms advertising online. So most of your one firms, because they're getting work from consumers, they're advertising pretty much anywhere they can. And as you go down to the five firms, it almost becomes the very, not a. Good thing, very unre respected to even do any type of advertise.

It's very rare that your four and five firms more hard than do any advertise. Now your four firms made, but ads, magazines, occasionally do other things. They sponsor events, but you don't see your five firms really doing any advertising often. Right? So it just doesn't happen. But you're one and two firms.

Most of their leads and clients come from advertising. That's where you start seeing ads on buses and radio ads for tax resolution, all those sorts of things. So these are your lower ranked firms need to attract consumers. And your higher ranked firms typically have lots of institutional clients and do not do a lot of advertising.

And they [00:12:00] get most of their business referrals to the extent that even at your five rank firms and a lot of your four ranked firms, there's almost a predominant ethos that, you know, business, and this doesn't always help the attorneys working there, but the business should come from the quality of your work and the quality of your firm and people referring things to you.

But it is not necessarily case that a lot of times, even with the four and five rank firms, the people that bring in the most business so forth are out there, but they're certainly not advertisement. And then this is again, no advertising that you can see here. That you're one and two almost always do advertising.

You're born five, hardly, very likely none. Your three firms will do advertising occasionally, but again, not that often. So that understands of the types of clients.


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