The Virtual Firm Model: Acceding To The Overriding Interests Of The Client

Editor: Mr. Bruno, would you tell our readers something about your professional experience?

Bruno: I have been an attorney since 1983, principally in the areas of environmental litigation and insurance recovery. Following a year as a judicial clerk I began my career in private practice at a large multidiscipline New Jersey firm. I was one of the original members of the firm's environmental group, which, in time, became the largest environmental department in New Jersey. The insurance recovery practice that I am very involved with today was a natural outgrowth of that environmental practice. Years later, we started our own firm with three of my partners and have continued with the same core practices.

Editor: Please tell us about the founding of Robertson Freilich. What was the founding partners' strategy?

Bruno: The four founding partners left our old firm in 1999. We believed we could provide more efficient and effective service to our corporate clients through a small litigation-only firm focused on four core practice areas: environmental, insurance recovery, complex commercial disputes, and trial practice. At the time we organized Robertson Freilich it appeared that many corporate clients were coming to see the advantages of going to a small specialized firm - one possessed with the requisite expertise but also more attentive to their needs than might be the case with the larger firms - even for large-scale litigation. We were aware of surveys indicating that nearly 70 percent of general counsel at the Fortune 1,000 companies were unhappy with their outside counsel, and we believed we understood why: the cost of outside legal services, outside counsel's unfamiliarity with the client's business, and lack of attentiveness to the client's needs. We thought we could address all of these issues, and I believe I am safe in saying that we have.

In addition, one of the things we wanted to do internally was to get back to practicing law as a true partnership, as opposed to practicing with the corporate model so prevalent among the larger firms.

Editor: You have spoken about a very interesting concept, that of the "virtual firm." For starters, what do you mean by the term?

Bruno: The concept has been around for some time, although there is no question that advances in electronic technology in recent years have increased the utility of the virtual firm. The term refers to situations in which two or more law firms arrange to work on a legal matter as one firm, organizing the legal team and the assignment of tasks in a way that appears to best suit the needs of the client and makes the most effective and efficient use of the skills and experiences of the members of the legal team.

A virtual firm team might be created in a number of ways. We have established a team of two or more firms in advance of being retained for a particular matter or project and then approached the client as a way of marketing ourselves. Another way is where the client itself - familiar with the strength of several firms - suggests that the matter would best be handled by the firms working together. A virtual firm team might also be the result of the firm initially retained coming to the conclusion that an additional skill set is required to effectively handle a matter.

Editor: Law firms are notoriously given to promoting their own areas of expertise. How do you go about avoiding a clash of interests where lawyers from different firms are involved?

Bruno: In the area of litigation, where matters can stretch out for many years and require a tremendous amount of teamwork, this can be a challenge. Whether it is client-to-firm or firm-to-firm, it is critical to attain, from the outset, a high level of trust and understanding regarding how the case is going to be staffed and handled. With such a foundation, a clash of interests is usually avoided. Clear direction from the client regarding who is to function as lead decision-maker is helpful, but there is no question that this model requires counsel to check their egos at the door. In the long run, clients come to appreciate the flexibility that the model affords, and the participating firms benefit from a relationship that can endure over a long period of time, often much longer than the case at hand.

What also helps is that very often one of the firms constituting the team is the client's principal outside counsel and brings to the table an institutional knowledge of the client and its business. That is an extremely valuable contribution. We see the ultimate value of this model to the client as a combination of three elements - subject-matter expertise; a familiarity with the local environment, including the courts and the regulatory bodies; and institutional knowledge of the client - which may only be available through the use of several different firms. At the end of the day, it is the overriding interests of the client that must come first.

Editor: Does the concept extend to include a situation where you have law firm lawyers and members of the client's legal department on the same team?

Bruno: Client involvement is very important in these arrangements because management of the legal team can be complicated. At the same time, however, it is important not to burden the client with responsibilities that the outside firms have been brought in to handle. It is important to know when to call upon the client and when to sort things out among the members of the team without reference to the client.

Editor: What type of organization is most receptive to this concept?

Bruno: Our experience has been that the larger corporations are more apt to consider it. For one thing, such enterprises are familiar with multiple counsel and complex matter management. The size and complexity of the matter - litigation, to be sure, but also transactional projects - are also factors that contribute to a company being receptive to the virtual firm approach.

As I mentioned, the model is also used to address a client's geographical concerns, which include a firm's proximity to and familiarity with the courts or regulatory bodies. Such concerns also extend to the firm's knowledge of the community and the local business environment. On a side note, let me mention that the relationship resulting from a virtual firm arrangement goes well beyond what we mean by retaining local counsel. This is a substantive relationship, and the local firm is going to be called upon to function at a very high level.

Editor: Would you use this model where one firm has been trial counsel and another is brought in to work on the appeal?

Bruno: Yes. We are currently handling a federal court matter in New Jersey for a client where we suggested to the client that another prominent New Jersey firm be brought in to assist us on the appeal. We are looking to partner with a particular attorney who is highly respected for his appellate expertise, and the client is very appreciative of our having come up with this idea.

Editor: Have you used this model in some of the complex environmental and insurance recovery matters that the firm handles?

Bruno: Yes. We have had a great deal of experience in using the virtual firm model in both of these areas. I was recently involved in a products-related insurance recovery matter that was litigated in federal court in Georgia. That matter had us partner with a Georgia firm and with a London-based firm where the client was based. We are currently working on an environmental insurance recovery matter being litigated on the West Coast which involves partnering with a Los Angeles firm and a Seattle firm.

Another example is a large antitrust litigation in federal court in Kentucky that we handled for one of our clients. The team included, in addition to a highly-regarded Kentucky firm, a large New York firm. We put the team together before approaching the client and then advised that this was, in our view, the best way in which to handle the matter. We were retained and obtained a very good result.

Editor: Would you summarize the benefits to the client that derive from the virtual firm model?

Bruno: Above everything else, using this model permits the client an opportunity to maintain, and indeed expand, its outside counsel relationships with firms such as Robertson Freilich that do not have multiple office locations. That enables the firm to maintain its institutional knowledge of the client and the client's preferred approach to litigation matters, certainly a matter of great concern to the client. In that way, the model serves to reduce, if not eliminate, the firm's learning curve. It also enables the client to address, effectively and efficiently, a whole series of issues having to do with subject-matter expertise and familiarity with local forums that might be beyond the reach of a single outside law firm.

Editor: And this model has been well received by clients?

Bruno: Clients are very receptive. The model permits them to work with our firm - its people and expertise - in a variety of work settings, and that serves to enhance the client-firm relationship. In addition, it demonstrates to the client that the firm places the client's interests ahead of what would otherwise be normal business biases. Law firms are very protective of their client relationships, and what we are doing here, in partnering with other firms, is signaling to the client that their interests come first. They are very appreciative of that.

Editor: How do you see this model evolving in the years to come?

Bruno: As matters become more complex and, as a consequence, the practice of law becomes more specialized, companies will need to look to outside counsel to assemble teams that best suit the interests of the client and address the particular matter. The virtual firm model provides the client with an opportunity to retain a better team than might otherwise be the case. From the law firm standpoint, those who do not consider bringing this model to the attention of their clients are likely going to lose business opportunities to those who do.

Let me add that the virtual firm model does not fit every law firm. Because of the way in which Robertson Freilich was organized and then built, the model fits exceptionally well. The concept of teamwork pervades everything we do. Consequently, we are quite comfortable with partnering with other firms and building a team as if it were from entirely within our own ranks. This model is fast becoming a crucial aspect of our firm's strategic business plan.

Published September 1, 2007.