With reports from Major Lindsey & Africa and Citi anticipating a down year for small to midsize firms industrywide, roundtable participants responded with their own predictions for Colorado the remainder of the year and beyond. Roundtable participants were Jeff Friedman, partner at Hall & Estill; Jay Kamlet of Kamlet Law and LawBank; Tom List, managing partner of Moye White; and Giovanni Ruscitti, managing partner of Berg Hill Greenleaf & Ruscitti.
The conversation was reported by Hunter + Geist and moderated by Tony Flesor, managing editor of Law Week Colorado.
EVALUATING INDUSTRY REPORTS
LAW WEEK: Before our discussion, I sent you all some 2018 forecast reports from Major Lindsey & Africa and Citi. I’m curious what you think of those types of industry forecasts, if you look at those, if you disregard them.
Let’s start with part one of the question: how much stock do you put in these types of reports?
LIST: I can tell you that I do not ignore them. I don’t necessarily read them in strict detail. Lots of the information about international trends, frankly, is irrelevant to my world. I do look for some trends that are hot in my world.
I had actually seen the Citi one before you had sent it around. It’s been on my desk for a while. I actually circulated it to the rest of my management committee and suggested that they read it, which is an unusual event for me.
I think we all get a lot of this type of information. It can be overwhelming, but there are certain sources that I give a little bit more credibility to.
RUSCITTI: I’m the same way. I look for those types of reports and read them — typically prior to our executive committee meetings — but to me, a more accurate gauge is talking to our clients, especially our general counsel contacts. They have a better sense of what’s going on in the marketplace and what they’re looking for in terms of outside counsel. So it’s informational.
FRIEDMAN: I agree. It’s foolish to ignore [industry reports] because they’re going to spot trends that you need to be aware of, but you also have to talk to your clients. That’s your first line of defense for your existing relationships, and they are typically a good measure of what you need to be thinking about or doing as you’re looking ahead for your planning for the year or your one-year, three-year, five-year plans.
WHAT SETS COLORADO APART
LIST: While the trends [in national reports] are certainly germane to our world, some of the topics are simply beyond what I need to consider for a Denver, Colorado-based law firm.
FRIEDMAN: I agree. I would say, though, from my past experience, if its prologue suggests that if there’s a downturn in the market, AmLaw 100 is going to be reaching down for our client base, I think it’s good to have this information for defensive posturing if for no other reason.
KAMLET: I think it highlights how silly law firms are in their planning. During the recession, everybody said, “We’re going to be different, we promise. We’re going to change. We’re going to bill you at our associates’ rate, we’re not going to build our firm on your back by training our associates on your backs.” And the recession has come and gone, and it’s the same old stupid things.
RUSCITTI: Well the struggle is the trends. I have been practicing law for 25 years, and the trends that you’re seeing today are the same trends that I remember reading about as a young associate. It’s the same issues that are coming up. They’re cyclical. I started off in a big firm. Yes, I got paid more money, but I billed 2,400 hours three years in a row. There’s only so much you can do.
LIST: I think our success, in terms of recruiting associates, is precisely what you just raised, and that is the folks who have spent the 2,400 hours working for a big major law firm — either international or national — they realize the work/life balance, culture, prospects for elevating their career. We’ve recruited some attorneys from New York City who took significant pay cuts because they want to live in Denver and they want our culture versus 2,400 hours working with a partner who has no idea who they are.
KAMLET: One of the things they keep saying is that the associates are appreciating the higher bump in their salaries and that they’re willing to work harder because the firms are investing in them, which is ridiculous. Again, they’ll get sick of the 2,400 hours.
At $160,000, even at 2,000 hours, you’re making $80 an hour. That’s your salary. When you break it down into that simplistic, “I’m making 80 bucks an hour,” that doesn’t always ring so positively.
RUSCITTI: The reports that I read that I think are more telling are what is important to an associate, to staff. I didn’t believe it at first that money wasn’t the No. 1 thing, but now that I’ve been in the managing partner position and talking to every single one of our employees, it’s the quality of life. It’s the hours that they’re working.
LIST: I couldn’t agree more. I think us older folks in the room always assume that money is the primary driving factor, and it is not by any stretch, particularly with the younger set.
FRIEDMAN: Well, I think in this town people are definitely looking for a better quality of life. I mean, I moved here from Chicago for that. But to sustain that over a course of a career, some people live for it. That’s not everybody, and it sounds like that’s the feedback you get.
RUSCITTI: Absolutely. Being in Boulder — you’ve got the Denver lifestyle and you’ve got the Boulder lifestyle — the people who come to Boulder definitely are focused on lifestyle, and they’re willing to even take a further pay cut to be at our firm and to be involved in the Boulder community.
LAW WEEK: So you’re all getting at this from the attorney perspective. You’re already voicing the fact that Denver or Boulder don’t necessarily operate in the same way New York or Chicago or anywhere on the coasts do. As far as going back to industry outlook from the client perspective, from the work perspective, what do you think might be different here? Do you have any different expectations for how some of the industry-wide forecasts might or might not be touching us here?
LIST: First and foremost, client demands for attorney work product are the same no matter where you are.
In Denver, we stress quality and quantity and fairness of price. That’s how we think we capture market share. I don’t see a lot of pressure from clients — either locally, nationally or even internationally — with our rate structure. We don’t get a lot of pushback.
I think when it’s a national company, they are working with law firms across the country, and when they see Denver rates, they’re pretty pleased.
RUSCITTI: Absolutely. And the difference is instead of getting an associate at a partner rate, you’re getting a partner at a much lower rate. And you just can’t get that [on the coasts].
What I’m starting to see — the biggest trend that’s been happening over the years — is a lot of these larger corporations are not happy with the $1,200 or $1,600 an hour, and they’re coming to us at a rapid pace. And that’s a great trend, right?
LIST: Great trend.
RUSCITTI: And the economy is booming, so this is not a recession issue. This is, “We want somebody who’s going to put the right person with the right rate with the right level of experience on my project, and it’s not going to be a first-year associate billing $600 an hour.”
FRIEDMAN: To me it’s the three Ps. It’s pricing, which is what we’re talking about here; it’s process — are you efficient or are you wasting time where the bill maybe looks bigger than it should according to your client, and we all have those conversations at one point or another; and project management — so once you’ve got your processes in place, are the right people making sure they’re doing the things they need to do to get whatever it is that needs to be done.
I think there’s a real estate thread in this room. Just from a transactional standpoint, we have a Tulsa, Oklahoma, office, and I can use a paralegal in Tulsa who looks like an absolute bargain to my Chicago clients, or an associate. It has its challenges when you’re working on the phone and you can’t walk down the hallway, but it’s a good sale point. It’s something that clients respond well to.
LAW WEEK: One of the reports specified that firms that do it all — or that try to do it all — might not necessarily thrive, but the firms that find their specialty are expected to work better. But I think what you’re all saying as far as the pricing in the market that we’re in, that might be an advantage. Do you think that sounds like that holds water, the specialization aspect?
KAMLET: Well, you can’t beat a diversified practice, in my opinion, a diversified group of practitioners, because that’s where you can start making some real inroads to companies where you’re not just real estate counsel, but you’re also able to help them with some corporate or employment [matter].
Again, I understand this idea of, “Hey, we want somebody who’s really great at this one area,” but I think particular firms have to have a diverse practice area so they can service all of those needs that crop up.
LIST: I agree with a lot of what you’re saying, but I need to respectfully disagree on part of it because I do think that the client base in Colorado, in particular, will stay with multiple firms.
Let’s take real estate, for example, since we all seem to operate in that world — they’re satisfied with the real estate work and they understand that that same firm might not be able to provide expert tax advice or securities or employment, and they’ll keep the real estate work with that firm. Our task is to try to capture those different practice areas.
I think that’s one of the big topics that we face: How do we branch from what we call low hanging fruit? The client is already in the office. How can we let them know that we have the expertise to do other practice areas? We do that by providing efficient, economical, great work in the one area that they have trust and confidence in, and it’s a challenge. I mean, it’s challenging. It really is.
RUSCITTI: We’ve had to address that in the last 16 months where we had to grow. We were about 28, 30 attorneys, which for us has been our sweet spot for about 10 years, and then we went up to 42, and it was through diversification. We added a couple of practice groups that were intentional to make sure that a lot of our larger corporate clients were getting all their needs met.
And we’re a little bit different in that a lot of our lawyers are cross-trained. Like a lot of law firms, if you’re in the securities group, that’s all you do. A lot of our lawyers are like myself; 40 percent of my practice is complex commercial litigation, 40 percent is transactional, and I’m a AAA arbitrator. We’re actually looking for lawyers who are that way because a lot of our clients are general counsel of a company. They might call with an OSHA whistleblower case in the morning, and that afternoon they might call and say, “Hey, we’ve got an employment contract, can you have somebody look at that?” or the next day, “We have an environmental issue, can you have someone look at that?” And what they really like — and what I think is unique about Denver specifically — is that they like calling one person and saying, “Okay, I’ll have Tom do this, I’ll have Jeff do that.” It’s that strategic partnership that I think is key that big firms struggle with.
FRIEDMAN: Not to beat the dead horse, but when my firm finally got the opportunity to open its office here, it hired as its foundational partner someone who is a client of the firm. This is someone who knew the strengths of the firm in Oklahoma. They understood his strengths as in-house counsel of the company that he was at, so he hung out his own shingle. He’s native. He’s from Boulder. And so he was a great cornerstone, a guy who’s got a variety of experience from his entire life. He’s lived on both coasts. To me, that was smart because you see plenty of firms who want to put a flag in the ground here because it’s a strong and growing market and they send somebody from one of the coasts or some other large city, and they’re not always successful.
And so then you’ve got that as your cornerstone. You add someone like another friend of mine who does ag lending but also does a lot of workouts in bankruptcy and so forth. He’s doing litigation and also doing banking and finance, and that’s great because then it seems like you’ve got 18 people in your office when maybe you’re only nine, just because you can offer a lot of different services.
LIST: To enhance that concept a little bit, at every partner meeting, we invite a handful of partners to describe their experience. We had one younger partner — and it was just a hilarious little skit that he did — “If you have this problem, just call Tim.” And every time he said, “Just call Tim.” He must have said it 25 times, but the purpose of the message was he had a broad experience in multiple different things and yet everybody thinks of him as our bankruptcy lawyer, but he’s got so much more depth.
To me, it’s not only selling outside the firm, it’s selling inside the firm. We have a lot of attorneys who have come from other firms to Moye White with varying experience in different subject matters, and we all need to know that. The easiest sell is to sell your colleague as opposed to yourself. If you don’t know that they have the expertise or the firm has the expertise in a very specific niche that may help an existing client or a new client, then shame on you.
LAW WEEK: Yes. So you’re saying almost the opposite of what the report is saying as far as leaning into your specialty. You want someone saying they recognize that you do have those other areas, and if someone has come to you for your specialty, you can use that to open the door to other work.
LIST: I do think that we like to call ourselves full service, but we lack in a couple of key critical areas, and we recognize that. We have strategic alliances with firms that we think are much more skilled in that regard. So do we want to do what you guys did [Giovanni] and grow from whatever our present number is to a larger number and bring in a practice area group? We thought about it. We’ve had a little bit of struggle and we’ve had one success.
We haven’t gotten into the whole lateral issue, but in order to expand into different practice areas, it generally involves lateral hires versus organic growth because organic growth is a long process.
LAW WEEK: We can get into the lateral issue right now.
LAW WEEK: The Major Lindsey & Africa report mentioned that “firms continue to generally prefer groups over single partners, though there is danger in a myopic preference for groups: ‘Swinging for the fences’ also results in overlooking single partners who would be a solid addition to the firm.” I mean, is that something that you see going on that we’re seeing these big groups moving versus single attorneys?
KAMLET: Firms that want to come into Colorado really don’t want to do it incrementally. They really want to come in and merge with a medium to large firm because it’s high energy to actually grow something versus just taking something wholesale.
But the fact of the matter is there aren’t many firms left for firms to come and buy. The fact is [the firms are] doing great without needing the national or international firm coming in to dictate their lives.
I definitely see a slowdown of outside firms coming into town through a merger or doing what Hall Estill has done and bring in a few cornerstone people and then maybe grow, which is great. I think you’re going to see a lot more firms internal to Denver and Colorado merging like Kutak Rock and Lowe Fell & Skogg that just happened last month. There will be some internal mergers within the city, but I certainly am banking on these lateral moves because I think it’s a smart way to grow. You don’t have to worry about cultural issues when you’re trying to bring large groups. Cultural shifts will kill mergers. It’s done it to a lot of firms that came into town during the recession. A lot of firms haven’t succeeded here because of cultural discrepancies.
LIST: On the lateral hire, we typically start with a candidate, and if that candidate has a book of business that requires a group, that group also needs to go through our vetting process. It’s not just a done deal that the entire group gets to come. Our focus is on the primary lateral candidate, and then if there’s a strong advocate for the rest of his team, we’ll see whether it’s necessary. We’ve brought some teams over, there’s no doubt about it.
RUSCITTI: We’re similar. Last year, we had a lot of growth, and we did it two different ways: We brought in one group, one practice area. It was very targeted and very specific. We brought in three people. And then we grew in a couple of other areas where we went out and sought individuals, and there were hits and misses, like you said. I prefer looking for the individual first, and really it’s about finding the person, not necessarily the book of business. And the book of business, if it’s right, it’s right. You’re going to know it.
For a firm our size, you can’t grow that way. We’re not looking to be acquired, so we’re looking to grow internally first if we can, keep our people and have them become partners, which is not easy in today’s market. The pressure for a young lawyer to get business and grow that practice is greater than ever before, and it’s harder than ever before with all the new lawyers in town. But that’s still our focus, and we’re proud that a lot of people who have started off as law clerks, as first-year law students are now partners, which is cool to see.
If you’re going to grow, laterals are always going to be there, and I prefer the individual approach.
FRIEDMAN: That speaks to me coming from Chicago. The middle market firm that I grew up in, I was there for 15 years. I wasn’t jumping around. If you start bumping up against that resistance getting you beyond, say, income partner level, it can be frustrating. It’s important to foster that and to invest in the young people who are at your firm.
At the same time, so far, we have been successful in picking one or two lateral hires, but at a full shareholder equity partner level that just boosts the bottom line. Especially for an office like ours, where we have a lot of work but we’re up against you guys in establishing our brand and our reputation in town. We’re going to look for people who have been around and who know people here as well as people like myself who are going to bring an outside perspective and ruin the culture with our Chicago influence.
LAW WEEK: And as you mentioned, Jay, there are not that many firms left to be acquired. Again, it was in the reports that it can be all-inclusive general practice, mid-market firms, single-city firms are going to continue to be acquired. Giovanni, and Tom, is that something that makes you feel like you have a target on your back sometimes?
LIST: Yes, absolutely.
FRIEDMAN: How often do you get approached? Do you get approached a lot?
LIST: Yes, I do.
RUSCITTI: It’s frequent, yes.
LIST: Our mantra is we know why we’re attractive. Why are you? We haven’t found a situation where, from our perspective, we have a great fit with another group. I can tell you we won’t even consider anything east of the Mississippi River.
KAMLET: That’s smart.
LIST: There’s a cultural divide between the East Coast and Midwest and West. I just think there are some core values that are consistent with the geographical area that we’re in.
To that point you look at the landscape of the law firms in Denver 10 years ago versus today and you go, “Wow, are we dumb or are we smart?” Because 10 years ago, there were probably 30 Moye White-type law firms. Today there are maybe a dozen.
RUSCITTI: I think it is actually. If you look at the most recent numbers, firms of 40 to 60 attorneys, they’re dwindling. And I don’t think it’s a good trend because I don’t think clients are getting better service and efficiency from these bigger firms.
Again, I have friends in these big firms, and they put out good work product. They’re good. I started off there. I got well trained like you did, and I owe it to that experience, but if I’m hiring a lawyer, it’s going to be from somebody like us.
LIST: I think there’s enough market share where there are clients that have that exact same point of view. They want to hire a Denver, Colorado-based law firm for Denver, Colorado-based business or extend it even further if they show the expertise. There’s no urge for us to expand into different markets outside of Colorado, nor to become a satellite office of somebody in a different city.
RUSCITTI: Sometimes you have to expand to satisfy. We have an office in Cheyenne [Wyoming] and Los Angeles, and those are really very strategic alliances for clients, but I’m like you. There’s no need to say, “OK, let’s go open an office in Chicago. Let’s go open an office in New York.” I wouldn’t want to do it.
KAMLET: But I do see that people are going to start to look to — sorry — the second tier Colorado cities: Boulder, Colorado Springs, Fort Collins.
RUSCITTI: Second tier?
FRIEDMAN: The way I understand it, Denver was second tier to Boulder for a long time.
KAMLET: Fair enough. But again, whether it’s intra-Denver or just intra-metropolitan area, I think Colorado Springs and Boulder and Fort Collins are great targets with rich potential for those acquisitions — smart, strategic acquisitions.
LIST: I agree. Those are separate legal community markets, and they’re hard at times to penetrate as a Denver-based law firm.
RUSCITTI: It’s very hard. A lot of firms have tried. Boulder is a very unique place because we’re No. 2 in the country when it comes to VC private equity funds that come in. It’s No. 1 or No. 2 in the country in terms of intellectual property development. So your client base is a very interesting group. It’s a very rich group in terms of their experience. A lot of them are entrepreneurs as well, so you have that emerging growth, entrepreneurial spirit. It’s a very unique market. We love it. I agree, it’s probably a place where nationals are starting to look to try to pick off firms. There aren’t too many.
LIST: Do you think nationals have penetrated that particular niche in Boulder?
RUSCITTI: They’ve tried and really, really struggled.
FRIEDMAN: In that little market — those 40- to maybe 60-attorney-firms — don’t you feel like the boutique firms and the nationals are just picking away at that middle space?
That was always a struggle. That was always the push-pull at a firm the size of ours back in Chicago where we were differentiating ourselves in one respect, and we were trying to be the developers’ go-to law firm. But we prided ourselves on our culture, we refused to consider mergers, and then the recession happened and people sat around and said, “Why are we so resistant to considering these things?” And that’s when you started to see a collapse of a lot of that culture — that middle-market firm that was well recognized and well respected in the marketplace just evaporated.
I think you’re uniquely situated because you’re sitting in Boulder, and that’s your market, and you know it really well.
RUSCITTI: We know it well, and we don’t see the nibbling away from the bigger firms. It’s really the little boutique firms that specialize in a particular area of law.
So the VC private equity firms, they’re relatively small in Boulder, and they’re quite successful. I’m always actually amazed at how successful those firms are. They’ve developed a niche.
We don’t really view ourselves as necessarily competing against those guys. Really, I think our main competition with clients is the bigger firms, and they’re really not necessarily in Boulder either. Firms like that are the ones that we’re starting to see the transition of clients to a firm like ours. So I didn’t view it as nibbling. I just viewed it as a transition coming the other direction.
LAW WEEK: I wanted to also talk about external forces or obstacles. I’m curious what pressures you’re seeing. Some of the things that were cited in these reports were decreasing attorney efficiency, alternative legal providers taking away some of the work, as well as corporate counsel doing a lot more of their own work than in the past. Do you see those things continue to be factors in your world?
FRIEDMAN: Corporate counsel is an interesting one. I’m now sitting in private practice for almost 20 years. There are times you think, “Boy, it would be great to give up the billable hour, go in-house somewhere, and life would be easier,” but you’re actually taking a pay cut these days and doing more work because the corporations are expecting you to carry the load instead of offloading it to outside firms. So I don’t worry so much about that. I look for the play where I can go to a GC and say, “Hey, in this one respect we’ve automated the blah, blah, blah lease document, and we can spit out 50 of those in the time that my competition can only do 10, and it gets you far ahead and if you guys want to run with it from there, great. We get a little something and you get a little something.” It’s a win-win. So I worry less about them.
I worry more about the low-hanging fruit that a lot of us, for a long time, take for granted. I don’t mean to say I worry about it. I mean to say that I think you’ll see it disappear. I know LegalZoom isn’t perfect, but the entrepreneurial types want to spend a fixed amount and have what they consider a suite of agreements and documents that they need in place, are willing to take a little bit of risk on that despite the fact that we’ll do it better. We’ll customize it, we’ll tailor it, but not everybody wants to spend money on customization and tailoring.
So I see us losing work to those types of operations. I think technology is going to be a big challenge for us. Those of us who aren’t spending money on AI right now, at some point in the future, when it matures, we’re all going to be jumping in and having to spend something on that type of technology.
So you need to be listening to what your clients are insisting upon and adjusting to those things.
LIST: I haven’t seen any impact on the alternative legal service provider concept that I read about. I just don’t think it’s reached Moye White in Denver, Colorado. You know, there was a lot of information [in the reports] about the big four [accounting firms] trying to usurp some legal work, legal tasks, due diligence, those things. We haven’t seen that impact. I haven’t seen it in Denver.
RUSCITTI: I haven’t either, no impact.
LIST: No impact. Technology, it’s not my strength, but what we have done at Moye White is hire talent in that arena to keep us on the forefront to the extent we can, and there have been changes that we have implemented that are struggles for some of the older set, but you have to adapt. And once you adapt, you go, I can’t believe I used to do it the other way. You know, the whole timekeeping thing, I still see people writing it down and I go, Wow, are you kidding me? But we try to get people to become more efficient even in that task.
RUSCITTI: The external factors from outside counsel, if you’ve developed a good relationship with your outside counsel and they appreciate that relationship, that’s going to really impact your relationship. It’s really what’s happening at the business level in terms of how are they viewing that legal expense. Is it a project expense or what are they doing with that cost?
One of the interesting things that I started hearing from a lot of clients lately is about alternative pricing and fee structures. That is something that I think we’ll start to see impacting all of us in the future. For example, taking litigation on a fixed fee. That was unheard of 10 years ago, 15 years ago. At least I never heard of it. I’m starting to hear clients ask that question. That is going to be something that we’re going to start hearing more of going forward because companies have become a lot more cost conscious, which goes back to an earlier point which is they’re tired of paying the $1,200-plus an hour.
LIST: I’ll take that in a different way. Alternative fee arrangements, the way I like to characterize that is cost certainty with the client. You can call it whatever you want, but if you provide the legal service that you’ve been asked to provide for a fee that you told them you would provide it for, then they don’t care how you get there. That’s what I see in terms of alternative fee-type arrangements.
KAMLET: But I would caution using that model with potential new clients because I think for a lot of that, they’re just using you as a benchmark to see if they can get a firm they are more used to. “Hey, Moye White will do it, why won’t you guys?”
I would do it with clients that are existing clients that I know are going to be repeat clients and they’re asking for some certainty in this one area, if I can figure it out, for sure. But if it’s somebody who’s calling cold, saying we’d like you to do this …
LIST: It’s a red flag.
KAMLET: Yes, it’s a red flag.
FRIEDMAN: It has to be fair to both sides. They’d have to get a benefit of the bargain and you have to make a living.
LIST: And you have to say that.
FRIEDMAN: If you can get to that point. If you don’t say it, then you’re being levered to take your number and go somewhere else.
I like to do a budget. Spend some time, break down the matter into its components because clients don’t always appreciate all the things that you need to do to get to that finish-line goal. We need to show it to them and then do the low, expected and high. Once that invoice comes out every month, they know where they’re at. They’ve got a mile marker, and typically they’re willing to pay, and you’ll actually find you’ll make a little bit more money. Of course, it could also be used against you, but you have to have a good, trusting relationship.
LIST: And as it relates to corporate clients in particular, they obviously operate on budgets, and legal is part of that budget. If they’re exceeding that budget, they have to answer to somebody, typically, and that’s when the pressure comes back on the law firm. But if you can meet that budget or even come under that budget, you’ve got a friend for life. You’ve eliminated one of the biggest issues in talking to my in-house counsel. I don’t want to have to go and talk to my GC about why I exceeded the budget.
FRIEDMAN: We’ve all done it long enough, I think, that you talk to your contractor, who gives you an estimate. They sit and think about it, “Okay, what materials do I need?”
I think probably less so in litigation and more so on transactional work you can have a pretty good feel of what the cost is.
KAMLET: That’s a good point. A contractor buddy of mine was talking in this group yesterday, and he said they have an official estimator who comes in and says, “Here’s what it’s going to cost us to do it.” And then maybe your numbers guy is that estimator.
I think that might be a great new position in a law firm. All right, let’s figure out how we can do this and have somebody who’s dedicated to pull all the data from other deals that were similar and say here’s what it is. That would be an interesting option.
FRIEDMAN: It works. It’s a tough discipline, it really is. I’m not saying it’s easy. It’s time consuming. It’s the last thing we want to do. Most of us just want to get the project, roll up our sleeves, dive in, and start doing the work. Clients work in budgets. They set their budgets every year.
LIST: They do.
FRIEDMAN: And their legal staff is a big part of that budget, so you don’t want to be the guy who causes headaches.
LIST: No, you don’t.
THE COLORADO FORECAST
LAW WEEK: I want to bring things back to this idea of these industry-wide predictions. I’m just curious, if you were to come up with your own micro-industry prediction just looking here at our market, what would you say the outlook is for the remainder of 2018 and beyond for here in the Denver area?
LIST: Flat-to-modest increase. I don’t see a decline. This economy is killing it. So I do think there’s an intense battle for existing legal work shifting to market share. How that happens is what we deal with every day, but I don’t see the demand for legal work diminishing in Denver in the next year or two.
RUSCITTI: I see it increasing a little bit. I think there are some industries that are going to see some growth. Oil and gas is on the uptick. I think construction.
We do a lot of construction work. All of our construction clients were initially expecting their backlog to go away in 2018, and the opposite has happened. They’re now backlogged into 2019 and 2020, and they are very busy, and their needs are becoming more diverse.
Maybe it’s because the firms our size are getting more calls, but I’m actually seeing an uptick, not only in my practice, but in all of my partners’. So I’m hoping that what I’m seeing in the beginning of the first two months of 2018 is reflective of the rest of the year, which is some growth. That’s what I’m hoping for.
FRIEDMAN: I have clients in Chicago who are interested in looking at Denver, but the bigger upstream firms like JLL, for example, out of Chicago think that pricing has crested here. I’m speaking only to real estate because it’s what I know. But my smaller middle-market clients, they’re happy to come and keep looking, and they’re finding bargains here in their estimation. I’m not talking about new construction from the ground up. I’m not sure where Denver is going to be in the next year. With all the cranes that we see, obviously the opportunities are fewer and further between. If the fundamentals remain strong, then things will keep chugging along. But I do generally think that we’re at a maintained, if not moderate growth.
LIST: I would modify my answer slightly in the real estate arena. I think we’re looking for uptick. The rest of our practice areas at Moye White I’m saying moderate to flat.
RUSCITTI: Yeah, litigation has actually gone down a little bit. It is very unpredictable, but last year, we started seeing towards the end of the year maybe a little bit of an uptick in litigation, people were fighting a little bit more, but all of a sudden we’ve seen it change and more deals are starting to come across the table again. So I think litigation may be staying at the same level. Although if you would have asked me six months ago, I would have said, No, it’s going to pick up in 2018.