Newspaper article THE JOURNAL RECORD

Legal Giants Find Bargains in Smaller Midwest Firms

Newspaper article THE JOURNAL RECORD

Legal Giants Find Bargains in Smaller Midwest Firms

Article excerpt

The Kansas City Star

KANSAS CITY, Mo. _ Corporate giants are discovering they no longer need to pay big dollars for top legal services.

Many companies are finding that smaller law firms from smaller cities, such as Kansas City, provide the bargain they are hunting for.

In some cases, legal fees from law firms amount to half of those charged by big firms in New York, Washington D.C., Chicago and Los Angeles. The big firms can charge $400 to $500 an hour.

The lower fees have created new business for Kansas City law firms.

For instance, the Kansas City law firm Baker, Sterchi Cowden has built an impressive list of clients including General Motors Corp., General Electric Co., Bristol-Myers Squibb Co. and the Allstate Insurance Co.

Tom Sterchi, the managing partner of the 10-year-old firm, credits the firm's relatively lower fees with its success.

"Companies around the U.S.," Sterchi said, "are waking up to the fact that you can get great legal services in Kansas City and you do not need to concentrate only on firms on the East or West Coasts."

Other Kansas City firms are also seeing clients leave the larger East and West Coast firms to seek out quality law firms in smaller cities.

John R. Phillips, managing partner of Blackwell Sanders Matheny Weary Lombardi, said the trend started about five to six years ago but "accelerated the last two years, primarily because of the recession."

Traditionally, big companies have been loyal to the larger law firms in larger cities that provide sophisticated or high-profile legal work.

But many companies say they no longer can stay with a firm just because it handled their business in the past. While the corporations still use those firms for big projects, they are finding that smaller firms can handle some of the legal work. Many corporations are now served by several law firms.

"I think that it is a misconception to think that one has to go to large cities and large law firms to find quality legal services," said Jim Durkin, an attorney with General Motors Corp. in Detroit.

"We operate on a basic premise that we do believe that this is a buyers' market," said Robert Pike, senior vice president and general counsel for Allstate.

Pike believes that legal services are a commodity, and that Allstate systematically seeks out regional and smaller firms rather than sticking to the larger firms for tradition's sake.

He said Allstate is now able to bargain over fees with larger firms because they know the company will go elsewhere.

Arthur A. Chayking, Sprint Corp.'s assistant vice president of dispute resolution, said another reason why corporations are not staying loyal is that corporations have added top lawyers to their own legal staffs.

Chayking said Sprint handles an increasing amount of its own legal work with about 50 lawyers it has hired. …

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