Schwabe Gets a Makeover: Innovation at a 126-Year-Old Firm
Graciela Gomez Cowger, CEO of Oregon-based Schwabe, Williamson & Wyatt, explains her firm's move to an industry-focused model and new governance structure.
How big is your firm, where is it located and what are its primary areas of practice and focus?
Schwabe, Williamson & Wyatt is a law firm that offers a new type of client experience based on a deep industry focus. We provide full-spectrum legal services to our clients through comprehensive, proactive and industry-focused support to help them achieve their goals. We focus on six industry groups: health care, technology, transportation, ports and maritime, real estate and construction, natural resources and manufacturing, distribution and retail. With more than 170 attorneys, Schwabe has offices in Seattle and Vancouver, Washington; Portland, Bend, Eugene and Salem, Oregon; Mountain View, California; and Anchorage, Alaska.
Please explain your firm’s governance structure and compensation model.
In October of last year the firm changed its governance model to a single CEO (me) and a five-attorney board of which I am a member. The single-CEO model required that I give up my intellectual property practice to focus full-time on the firm’s growth and operations. We have a three-person compensation committee I serve on that sets compensation. In determining compensation levels, the committee looks at subjective and metrics-based contributions.
What do you view as the two biggest opportunities for your firm, and what are the two biggest threats?
We are focused on growth in the greater Seattle region as well as in our Mountain View office. We are deeply committed to our industry focus and changing the way we deliver legal services to our clients in our core industries. National firms continue to be interested in the Seattle and Portland markets, and this increased competition is a potential threat for some of our client base. As a midsize firm we are much more nimble than large national firms. We have less red tape and bureaucracy and can pivot quickly to meet our clients’ needs. On the flip side, we do not have the scale to do some of the riskier innovations we would like to pursue.
After the recession hit, the prevailing theory was that midsize firms would start to see more work come their way from large clients who could no longer justify paying Big Law rates. What has been your experience?
We have seen meaningful growth since the recession. As a sophisticated and innovative midsize firm in the backyard of disruptor companies like Microsoft and Amazon, we are well-positioned to compete with Big Law. We are a founding member of Advance Law, a service designed by its participating general counsel to foster legal market efficiency. One aspect of the service is to give participating GCs priority access to law firms that have been rigorously vetted for quality, client service, efficiency and innovation. Schwabe is one of only 12 firms vetted for this organization in the United States. Criteria for selected firms include a commitment to diversity and alternative fee arrangements, as well as a strong willingness to invest in the cultivation of long-term client relationships.
Are your clients pushing for more alternative fee arrangements, and if so what types? Is your firm amenable to those requests?
We are regularly asked for AFAs and have developed and successfully implemented innovative fee arrangements in addition to the typical hourly-rate-based fee structure. We work closely with our clients to understand and accommodate their needs for predictability and cost-containment. Examples of alternative fee arrangements that have worked well with our clients include fixed fees for patent/trademark filings/prosecution, blended rates for partners and for associates, litigation handled each year on a retainer that is developed from previous experience, increased discounts as the aggregate fees reach agreed-upon thresholds, and “lawyer on campus” on a negotiated flat fee. AFAs account for roughly 13 percent of the firm’s revenue.
There is much debate around how law firms can foster the next generation of legal talent. What advantages and disadvantages do midsize firms have in attracting and retaining young lawyers, particularly millennials?
Our industry group approach is a big part of our success around attracting and retaining talent. Our attorneys are empowered to become masters of our clients’ industries and this sparks the interest of our younger attorneys who want to be more than just lawyers—they want to be advisers, business people and industry veterans. Schwabe attorneys get out of the office and meet our clients where they are: on a job site, boat, farm, manufacturing plant, etc.
Does your firm employ any nonlawyer professionals in high-level positions (e.g. COO, business development officer, chief strategy officer, etc.)? If so, why is it advantageous to have a nonlawyer in that role? If not, have you considered hiring any?
Yes, we have a strong nonlawyer chiefs pool that is 80 percent female. The group is led by Denise Gaskin, COO, who has a unique background in psychology, collaboration, communications and wellness. Our COO, CFO, CTO, CIO and CCRO are responsible for helping drive the firm’s strategic plan. This group works closely with the firm’s CEO and board of directors and brings diverse perspectives and experiences to the table.
What, if any, technology advancements have you made in your firm in recent years? What are the challenges in implementing tech changes?
One of our goals over the last few years was increasing efficiency and mobility with progressive, firmwide and area-specific technology solutions (RIM, legal project management, case management, mobile time and expense reimbursement). Implementation of these programs has made a noticeable improvement with matter management and the delivery of legal services to our clients. One of the biggest challenges is security, so ongoing education of our users and securing our environment continues to be a top priority.
What would you say is the most innovative thing your firm has done recently, whether it be internal operations, how you work with clients, etc.?
Few people would expect a 126-year-old law firm to drive change and innovation. But that’s Schwabe. While we draw great inspiration from those who have come before us, we accept the responsibility of adapting to the demands of today’s clients and the markets in which they operate. Schwabe’s strategic plan is an industry-based strategy designed to deliver excellent service to clients across six industry groups. This strategy was not the product of an internal discussion; its seeds were sown by listening to our clients. In an age of global competition and rapid innovation, our clients asked for lawyers who understand their business and industry, who can see challenges and opportunities emerging, and who will place legal strategies into marketplace positioning. This is our charge. The shift to an industry group focus has resulted in firm growth and the recruitment of high-level lawyers who want to practice in this culture.
Does your firm have a succession plan in place? If so, what challenges do you face in trying to execute that plan? If you don’t currently have a plan, is it an issue your firm is thinking about?
I became CEO of Schwabe in October 2017, which was the culmination of a multi-year process that started with the development and implementation of an innovative strategic plan and the careful selection of a leader uniquely qualified to drive that plan forward. I took over the leadership of the firm after 16 years of shared leadership by managing partner Mark Long and President David Bartz Jr. My CEO position is new, and is a reflection of Schwabe’s continued commitment to function more like our clients. As the CEO, I am responsible for leading the strategic plan with a commitment to innovation, diversity and delivering unrivaled client services.
Column first appeared in on Law.com on May 1, 2018.