Queen City Law managing director Marcus Beveridge shares his take on the recipe for success
Boutique firms have been on the rise in NZ over the past 3 decades - but what will keep the market going? Queen City Law managing director Marcus Beveridge breaks down what differentiates a boutique from a full-service firm and why clients choose boutiques.
Ksenia: [00:00:23] Hello and welcome to New Zealand lawyer with us today we have Marcus Beveridge managing director at Queen City Law. Here to talk to us about the rise of boutique law firms in New Zealand. Hi, Marcus. It's great to have you with us.
Marcus: [00:00:36] Hi, Ksenia. Great to be here.
Ksenia: [00:00:38] So, first of all, Marcus, let's start at the very basics. What is a boutique law firm?
Marcus: [00:00:44] So the boutique is a derived from a French word called Bottega, and it's really a specialist area. So boutiques can be any particular size. They don't necessarily have to be small, although although most people cannot, they think of boutique needing a smaller practice. But that doesn't have to be the case. And in fact, some of the larger global firms who specialize in areas like insurance or aviation, law, finance or suchlike could be considered boutique because they're highly specialized. So typically a boutique will be a firm that is recognized as being a industry leader in a bespoke area of the law. In our case, it's immigration, particularly business, immigration, property and construction and litigation. So we have three strings to our bow, but that's what traditionally a boutique will be.
Ksenia: [00:01:36] And so what is the difference between a boutique law firm and, say, a larger full service law firm?
Marcus: [00:01:42] Well, the answer to that question is that there are several possible answers to that. Firstly, a boutique firm will be specialized in typically only a couple of areas of the law, as opposed to a large national firm which may have a practice comprising RMA techs, corporate banking and finance and suchlike. And the boutique may only have one or two areas of specialization. Boutiques also tend to be far more client centric, and their leaders are often very high profile. For example, leading national conferences and one area of the law or being regular media commentators in the newspaper and on TV in an area of the law that you won't necessarily see from the bigger firms. So they often have a lot more not charisma, but a lot more media time than the large national firms. The other thing is that the large national firms often are external sorry, their internal look. They look at their own achievements, whereas boutiques are often extremely client centric and are focused on their clients achievements and really wrap around the client's business activity more closely perhaps than the national law firm. The way of charging may be different, and there may be several other fundamental differences in how a firm practices.
Ksenia: [00:03:18] And so to look at it from the client's perspective, why would a client choose a boutique law firm over a larger law firm that might have expertise across a broader range of practice areas?
Marcus: [00:03:30] Good question. Kissinger To some, some clients will go to boutiques for various reasons they won't want to be passed around like a ping pong ball, which sometimes happens in the larger firms. And they'll want to deal with someone who is recognized as being highly specialized in one area of the law in terms of things like charge up rates and the cost of the legal service. It may be that there is not much in it. And but so there'll be that. That's one reason. Another reason may be that the boutique law firm owners often will be recognized in the field by a number of their peers and people in the industry. And so there will be a kind of clustering effect where clients will want to actually take advice from a particular lawyer who is well recognized in their local area as being an expert. And so a myriad of reasons will apply. It also depends on the nature of the client. If it's, say, a bank, they may have lawyers, and therefore that may preclude a boutique from giving advice to a client who needs to have a zipped up client relationship where, you know, the big law firms, cleaners know the large banks, cleaners type thing. But certainly a lot of people will prefer to go to boutiques for more accessibility and for the perceived expertise.
Ksenia: [00:05:04] So you've listed quite a few advantages of boutiques there. But looking at it from the other side, are there any potential weaknesses to boutiques?
Marcus: [00:05:13] Good question, because that's very insightful. Yes, there are there are issues. One of the major issues for boutiques compared to, say, the larger firms will be things like succession planning. If the firm is built upon the founded by, say, charismatic individuals who have run a practice and they haven't been able to groom the younger people to come in and take over the practice with the same sort of systems in place as the larger firms. In terms of recruitment and retention, then it may be difficult for the boutique to survive beyond the lifetime of the specialists. So that's a natural challenge for boutiques to get those settings right. But some of them have been able to do so and will continue to flourish. Another thing would be, I suppose, like in the larger firms say you've got corporate litigation, property tax and a few other divisions. They'd say we have what we have now where we have a major property slowdown. So you're in a boutique which is premised entirely upon the property and you don't have any other skills or any other philosophy of bow. Then you're going to be sort of swimming in the deep end with water wings because you won't have any other legal work to be able to do, which will make life very difficult. But some of the boutiques will be able to move quickly and to to mine the hills for sort of pockets of gold, because they are nimble and agile. That is the very nature of many boutiques that they can move into different spaces. But it can also be, as I said, a disadvantage if you're exposed to one particular segment of the legal market.
Ksenia: [00:06:53] And so taking all of that into account, what do you think boutiques need to do in order to compete and to be successful in the legal market?
Marcus: [00:07:02] I guess they need to be highly specialized in a couple of areas of the law and recognized to be leaders in that space. In our case, we have very strong property lawyers and immigration lawyers who are extremely well networked. And in fact, today we have a major announcement for our billionaire in immigration that's come out. And this firm is already being sought to provide answers to the media. And it's sort of self perpetuating because that then drives certain client work to this practice. So there is another firm that pops to mind is a law firm that has done exceedingly well in the Law Awards and the property space. And that's one of the guys from a larger firm and a couple of guys from medium sized firms who branched off, I think, eight years ago and have done extremely well in the Law Awards. And they've even gone to the to the length of taking a premise at one of New Zealand's largest commercial office towers, where they attract a lot of quality work. So, yeah, there's several answers to the question, but that's the main one.
Ksenia: [00:08:14] And just finally talking a bit about the future of boutiques. Where do you see that going? Do you think we're likely to see more boutiques come and go from the market in New Zealand?
Marcus: [00:08:25] Yes, I do believe that New Zealand will see more proliferation of boutiques. There's multiple reasons for that and one of them is also with the bigger firms. You know, they're sort of sending some of the older guys out to pasture at the at the reasonably gender age of 55. You know, some of the large firms are getting partners to retire. And and a lot of those guys who've got enormous IQ, their brains trust, they've been around for a long time. They've seen a lot of stuff and they've still got a lot of life left in them. So we've observed over the last few years a few guys in their mid-fifties setting up their own practices and doing pretty well and in fact in some cases competing against the firms they lift. And I believe that. And the other thing is, some of the guys in the larger firms will get frustrated in terms of profit shares. And just because different parts of the firms will be profitable and other parts won't be. In any given economic times. So we would expect more successful boutiques to be set up and to flourish in our local market. I think the pandemic probably, if anything, would sort of all go well for more boutiques to come about too, because of of the nature of working from home and some of the consequences of those sorts of things. Although I personally am a firm believer in getting to the office designed for us, that's where the sort of magic happens. So, you know, that's my view.
Ksenia: [00:10:00] Well, that was really insightful. Marcus, thank you so much for coming on and for sharing all of your thoughts on boutique law firms. We really appreciate it. And to all of our viewers here at New Zealand Lawyer, thank you for watching and we'll see you again soon in the next video.