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Swimming With the Big Fish: Minnows Making Waves

Published: December 15, 2005 | E-Mail

The tide is against them, but some small N.J. firms manage to land work with billion-dollar corporations

by Henry Gottlieb
from the November 28, 2005 issue of New Jersey Law Journal

Paul Tang’s company was in a tough real estate dispute a few years ago, and though the details are no longer fresh, Tang remembers being impressed by the lawyer for the adversary, Ira Meislik.

That’s good for Meislik.

Tang, as general counsel of Burlington Coat Factory Warehouse Corp., a retailer with $3.2 billion in revenue and 362 stores in 42 states, hires lawyers who know about real estate leasing, and Meislik is one of them. Which makes eight-lawyer Meislik & Levavy in Montclair, N.J., one of the few small partnerships on this year’s list of outside firms used by some of New Jersey’s largest publicly traded corporations.

Small firms make some general counsel nervous, but not Tang. “I think that’s the kind of attitude you would find in larger corporations where things are institutionalized,” he says. “They are afraid if they make a bad choice, it will reflect on them, so they stick with large firms with big reputations.”

“I have a lot of confidence in my own ability to recognize good talent,” says Tang, who was a partner at two New York firms before becoming Burlington Coat Factory’s general counsel in 1993.

Valley National Bank in Wayne, Horizon Blue Cross Blue Shield of New Jersey in Newark and Pearson Education Inc. in Upper Saddle River are among the small number of corporations whose rosters of outside counsel include firms with fewer than 15 lawyers. For the most part, the 146 firms listed by the 44 corporations in the survey have more than 100 lawyers. That includes 58 New Jersey firms, topped by Pitney Hardin of Florham Park, Jackson Lewis of Morristown and Sills Cummis Epstein & Gross of Newark.

“With a small firm you don’t have the automatic credibility of being a large firm that’s been around for 150 years,” Meislik says. “Also, you’re perceived not to have the resources to be able to expand or contract on any given day to do the work.” It’s also a myth, he suggests, that large firms can’t provide personal attention to clients. Small firms have to have something special going for them.


SELLING PERSONAL SERVICE

The relationship between Meislik & Levavy and Burlington Coat Factory appears to be a case history of how a small firm can get an edge.

First, Meislik had the good fortune to have a client whose work required interaction with Tang. “We saw each other in person, on the phone, across the table,” Meislik says. “I think that he recognized we bring a great deal more to the table than the mundane pushing of papers.”

Second, the firm offers personal service in a highly specialized niche—leasing for retailers—for which some large firms aren’t known. Meislik’s leadership of American Bar Association real estate committees and membership in the American College of Real Estate Lawyers presumably add to his firm’s credibility, he says. His writing and speaking on real estate issues hasn’t led to much business, but it does tell potential clients that “we’re recognized among our colleagues to be credible.”

Meislik says he does work for two other large corporations that he declines to name—one in Pennsylvania, the other in New York—and is currently trying to woo two more. But he doesn’t put a lot of stock in marketing campaigns. He has given presentations for industry groups that have allowed him to “stand before 50 potential clients and wow them,” but no clients were corralled that way. “We’ve had the opportunity, but we haven’t been able to close,” he says.

Meislik says he doesn’t think general counsel who hire real estate lawyers for leases are preoccupied with the price of the services, because legal fees are a small fraction of the total cost of the deal. Even so, his firm charges less than other firms he has seen in such transactions, which doesn’t bother him, he says, because “we feel we get a fair fee.”

“We’re not missing any meals here,” he jokes.


CREATIVITY COUNTS

Rees Morrison, a consultant at Hildebrandt International in Somerset, says, however, that offering lower prices than large firms tends to be an essential element of any small firm’s strategy for breaking into work for Fortune 1000 corporations.

Other conditions:

• The work has to be specialized. “They don’t have to be specialized in the eyes of the world, but they have to be good at the work they are trying to get,” Morrison says.

• Small firms must be creative. They can, for example, offer training to corporate managers or lawyers, provide form documents, take an in-house paralegal on secondment to the firm or offer hourly rate discounts coupled with a discretionary premium.

“Small firms can be creative in almost any number of ways because most of the big firms are not,” Morrison says.

• Small firms can promote personal service. He says: “They are in a better position to say, ‘I am the name partner, and I’m going to be working for you, and I’m going to care about you because you’re my biggest client.’ And that’s nothing Skadden Arps can say.”

“It’s really deskside manner, a high service quotient,” he says.

Finally, Morrison says small firms need not worry that in-house counsel will have to justify the retention to higher corporate officers. That’s because the work small firms do rarely gets a chief executive’s attention. “You’re under the radar,” he says. “In fact, you may not be selling to a general counsel. You might be trying to do well by the head of litigation or the head of real estate.” He advises small firms to pick an area of law they are steeped in, write a half-page update on a solution to a particular problem and send it around to corporate counsel. “Someone might call you,” he says.


KEEPING ONE’S CONTACTS

For some small-firm entrepreneurs, big-firm experience can be a plus when trying to impress in-house lawyers, and contacts from those days can be crucial.

Frederic Shulman, of 13-lawyer Price Meese, Shulman & Darminio in Woodcliff Lake, is a former partner at New York’s Hale, Russell & Gray. Lawyers he knew there went to work at Viacom Corp., and later for Pearson Education, which bought the rights to Viacom print brands, including Prentice-Hall and Simon & Schuster.

Pearson Education, which had $4.5 billion in sales last year, uses Shulman’s firm for its chief specialty, land use, for contract litigation and even for personal injury work. The firm also is called in when an employee is subpoenaed.

“They’ve done a very good job for us,” says George Costello, vice president for labor and employment in the counsel’s office. Costello says the company had its liability carrier put Price Meese on its list of firms it likes to use for Bergen County. “They haven’t done major real estate contracts for us, but I don’t see why they couldn’t,” Costello says.

“We use them because we have great results,” Costello says. And, he adds, they are markedly less expensive than firms in New York City and marginally less expensive than larger New Jersey firms, like McElroy, Deutsch, Mulvaney & Carpenter, which does the company’s employment work.

Another firm whose attorneys have large-firm experience is four-lawyer Kelley, Wardell & Craig, which works for Horizon Blue Cross Blue Shield on litigation and health law issues. The firm used to be the Haddonfield office of Philadelphia’s 250-lawyer Saul Ewing. Assistant General Counsel Lenore Brady says Horizon uses Kelley Wardell to defend the company against class actions before the classes become certified. “The quality of the work has been excellent,” she says. “They’re efficient; they don’t have enough lawyers to be as duplicative as some of the larger firms.” And their prices are fair and reasonable, she says.

Lucinda Long, the general counsel at Valley National Bank, says she is concerned about the size of a firm only when a matter requires a broad range of services, such as litigation, tax, environmental law, all at once. Then a large firm is required, particularly when troops are needed for extensive document production.

Otherwise, small firms are fine, she says. “I think the main thing is I don’t assume that people who work in large firms are necessarily smarter or better lawyers than people who work in small firms,” she says. She uses seven-lawyer Sodini & Spina in Edison for commercial litigation arising from suspected fraudulent transactions, 14-lawyer Williams, Caliri, Miller & Otley in Wayne for real estate and land use work and six-lawyer Schiller & Pittenger in Scotch Plains for work on Small Business Administration loans. SBA work is an ideal niche for a small firm that wants to work for a large bank because the issues and the forms are repetitive, Long says. “Big firms don’t do SBA loans because they wouldn’t make enough money doing it,” Long says.

Like all general counsel, Long receives plenty of mail from firms that want her company’s business. Unlike many general counsel, she reads it, though she adds that most of the material is filed away. She says price is an important element in such pitches.

“What small firms need to do is take the posture that they are competent enough to do the same quality work as large firms, but at lower prices, so they are cost-effective,” Long says. “That’s the pitch that counts.”


MEISLIK & MEISLIK
66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 • info@meislik.com