When Charles Hitchcock was 7 years old, working on his father’s farm near Plymouth Rock, Mass., Chicago was home to a mere 500 people. The year was 1834.
Hitchcock arrived here 20 years later, when the city was already transforming into the center of the Midwest, an agricultural hub connecting the resources of the West to the masses on the East Coast. Population: 66,000.
For an ambitious Harvard Law School graduate, legal work was easy to come by.
Hitchcock started his career at a firm headed by a man who went on to become a prominent judge, Erastus Williams.
Hitchcock became a dynamic lawyer living at a dynamic time. Chicago grew to 2.5 million people by 1870. That same year, Illinois had more railroad tracks than any state in the union, after having little to none laid in 1848.
The year 1870, as it happens, was also when Hitchcock — one of the most prominent lawyers in the city by this time — was elected chairman of the Illinois Constitutional Convention, which drafted the state constitution passed that year. And in that decade, Hitchcock’s law firm boomed. It represented banks, insurance companies, mercantile houses, the City Railway Co. and the South Park Board, according to a biography of Hitchcock written by Thomas W. Goodspeed and published in 1919 in the University of Chicago Record.
When Hitchcock died, somewhat unexpectedly at age 54, the Supreme Court and General Assembly adjourned in a rare sign of respect.
“It was said that the practice which his firm had gained was an enormous one,” Goodspeed wrote, “probably the largest in Chicago.”
Hitchcock’s story is also the founding heritage of the firm today known as Schiff Hardin. Calling itself the oldest partnership among the large firms in Chicago, Schiff Hardin this year celebrated the 150th anniversary of the founding of the firm, first known as Hitchcock & Dupee.
2014: A competitive market
The firm may not be the oldest continuous partnership among Chicago’s blue-chip firms, though. Determining who rightfully holds that title is difficult.
Ron Safer
Photo by Michael R. Schmidt.
Winston & Strawn says it has been in business for more than 160 years — since Frederick H. Winston started practicing in 1853. Hitchcock was admitted to the state bar in 1854 but went through various partnerships before founding Hitchcock & Dupee.
Sidley Austin, meanwhile, was founded in 1866 — which might actually be the same year Schiff Hardin was formed. Goodspeed’s biography marks the founding in 1866, but the firm’s internal records point to 1864.
Regardless, the 15-decade-old firm finds itself facing a legal market that couldn’t be further from that in the boom times of late 19th century Chicago. U.S. companies spent 1 percent less on outside counsel services in 2013 than the year prior, according to a HBR Consulting survey.
Schiff Hardin still represents big names in Chicago business — the Chicago Bears, Navy Pier Inc., the Chicago Board of Options Exchange and Alliant Energy, to name a few.
But, like other firms, it is locked in a tough, two-way competition in the legal services market, battling for both talented lawyers and high-paying clients. In that fight, Schiff Hardin has taken a decidedly different path than those other firms founded in its era.
Winston and Sidley have aggressively grown — to more than 900 and 1,700 lawyers, respectively. They have done it, at least in part, with a strong focus on specific practice areas — Winston’s litigation department has 500-plus members, for instance. That strategy has brought at least one form of financial success. Winston’s profits per partner were $1.41 million in 2013, according to The American Lawyer. Sidley’s were $1.875 million.
Schiff Hardin has largely eschewed aggressive growth. With 13 practice groups and about 400 lawyers in eight U.S. cities, the firm emphasizes client service, a commitment to professional ideals such as pro bono work and a collegial culture.
Its emphasis on pleasing its people starts, for associates, from day one. For their first year of practice, they are allowed to migrate among various practice groups, then later allowed to choose one.
Partners, too, are encouraged to create their own practice areas. For Bruce A. Wagman, a San Francisco-based partner, that resulted in appearing before the U.S. Supreme Court as part of the successful practice group he leads: animal law. The firm also has a fashion industry practice. And Susan von Herrmann, also of the San Francisco office, has developed a trusts and estates practice aimed at same-sex couples, who can now marry in many states and need help with the accompanying legal issues.
The firm has also made progress toward a goal to create a more diverse and inclusive group of lawyers. Nearly 25 percent of the firm’s equity partners are women, which bests the national average of 16 percent. And 48 percent of Schiff Hardin attorneys are women. Black partners account for 9 percent of the partnership, higher than the average AmLaw 200 firm.
In a ranking of the most diverse law firms by Vault, a career services firm, Schiff Hardin scored fifth overall and No. 1 for women. And in last year’s rankings, the firm scored No. 4 for “culture.”
Meanwhile, its commitment to pro bono has never wavered. It opened a storefront legal clinic in Rogers Park 35 years ago. At least two nights a month, residents walk in and discuss, typically with associates, any type of legal issue, such as landlord-tenant disputes, adoptions and commercial debts. The attorneys will review the case and, if something can be done, handle it pro bono.
This strategy has equated to profits per partner last year of $865,000, according to The American Lawyer. But for an understanding of what makes the firm tick, look no further than how Ron Safer, the firm’s longtime managing partner, views that number.
“I well understand the rationalization which says we have to be highly profitable to attract people to the law firm, or we won’t be able to employ anybody,” Safer said.
“Frankly, it is just that — a rationalization. Our doors are wide open. We managed to muddle through the recession (and) in 2012 (had) ‘only’ $865,000 average profits per partner. Nobody is having a lot of tag-day sales for our partnership. And our law firm is thriving. So I think you can stay true to your values and be profitable even in this highly competitive, contracting market.”
Partners choose to stay at the firm, Safer said, because in addition to handling rewarding, interesting matters, they place a high value on the firm’s lawyer-first culture.
Client first
One example of that attitude is Patricia Brown Holmes, a former Cook County associate judge who now serves on the firm’s seven-person executive committee and is chair of its diversity committee.
Paul Dengel
Photo by Michael R. Schmidt.
In 2005, she never had plans to join a private practice. She was instead trying to be the first black female magistrate judge in the U.S. District Court for the Northern District of Illinois. As part of that process, a lawyer from Sidley vetted her credentials. When the judgeship went to someone else, he recruited her to the firm.
After word got out that she was talking to Sidley, 12 other law firms expressed interest in her. Eventually, she spoke with Safer about the benefits of joining Schiff Hardin.
“He said, ‘Look, you can do a lot for diversity in law firms. You’ve done a whole lot for public service. Why not let your family benefit from your law degree? Why not let other minority lawyers benefit from your law degree?’” Holmes said.
“Everybody else was sort of focusing on, ‘You can make a lot of money.’ I’m like, sure. Whatever. I’m living a good life. Everybody wants money, but that wasn’t a motivator for me. Or they would say, ‘We could make a lot of money.’ Meaning the firm could make a lot of money. Well, that’s not a motivator for me, either. But he hit me with family and others — a succession line, role model, mentors, creating opportunities for other people. That resonated with me.”
For Holmes, everything Safer talked about has come true.
She has been a driving force behind the increased number of women and diverse attorneys at all levels of the firm. She has also built a thriving practice working on corporate and governmental investigations as well as high-profile litigation, such as winning dismissal of all charges against Mark S. Kipnis, a co-defendant in the white-collar criminal case against former newspaper publisher Conrad Black.
One of her favorite aspects of practice at Schiff Hardin is the ability to serve a wide swathe of clients. She is able to reduce her billing rate — typically $745 an hour — depending on the clients she takes on. She has charged some government clients, for instance, as low as $290 an hour.
Law firm consultants often say lawyers should try their best to restrict their services to clients who can afford their highest rate, a move known as “commanding your rate.”
“That might be good for business,” Holmes said. “But that gets back to my original point: We’re not just in this for business. We’re in this for the love of the law. We’re in this for our clients and the love of what we do.”
She said the firm treats every client the same “no matter what.”
“If we’re in that back alley with you, we aren’t going to run,” she said. “We’re going to fight it out until we’re out. The fact of the matter is, we put together lean teams, focus in on the issue, treat you like you’re the only client we have, and we consider ourselves your partners.”
Investing in the culture
The firm makes a number of decisions based on reasons other than its bottom line, said Paul Dengel, the leader of the firm’s financial markets and products group who also co-leads the firm’s pro bono efforts, along with Mark Zaandar.
“If you become too focused just on maximizing profits, you can lose your soul and lose the way people treat each other,” Dengel said. “And although the firm certainly has its eye on the financial ball, there are lots of decisions we make about how we’re going to run ourselves that are not profit-maximizing.”
For one, he points to the practice of allowing first-year associates to rotate practice groups. That delays their ability to specialize and charge higher fees. But, in the long-term, it lets them find a practice they enjoy and, hopefully, will thrive in.
Then there’s the firm’s response to the financial crisis and ensuing downturn in the legal market. Like most firms, Schiff Hardin has shrunk since the heady days of 2007. The number of equity partners went from 90 in 2007 to 68 in 2014, according to Chicago Lawyer surveys. The number of associates reported this year, 61, is more than 30 percent less than in 2007. Douglas Hoover, the firm’s chief marketing officer, said the post-2007 decrease is due to general attrition, including lateral moves. But Safer said it did not lay off a single staff member or associate in response to the recession.
“We were overstaffed, but our partnership said we’ll be damned if we throw X number of families into financial crisis so we can make even more money than we already make,” Safer said. “So as the owners of the business, we decided to take a little less.”
Another more obvious example of the firm’s value set is its pro bono work.
In addition to the storefront clinic in Rogers Park, Schiff Hardin lawyers have supported the Public Interest Law Initiative, Just the Beginning Foundation, the National Immigrant Justice Center and a long list of others. The firm has also represented wrongfully convicted inmates in Illinois and death row inmates in Georgia and Alabama.
Safer first became involved in the case of Julie Rea Harper, who was convicted of murdering her 10-year-old son. After a serial killer confessed to the crime, she was acquitted by an appeals court, then found not guilty during a second trial in July 2006. He has been involved in five cases that have resulted in a conviction being overturned or charges being dropped.
For Safer, that is an example of the pro bono commitment that sold him on the firm as he was coming out of Georgetown University Law Center. He had narrowed his decision to two firms in Chicago that were committed to pro bono work. He was drawn to Schiff Hardin’s approach to pro bono because it wasn’t intended to help generate business later on.
“It’s just pure and simple: helping people,” Safer said. “And that was as close to altruism as I could find in a big law firm. And to the extent that gave me a window into the soul of the law firm, I wanted to go there.”
Dengel said that attitude continues today.
“We don’t just do pro bono because we’ve determined a particular project will give good training,” Dengel said. “What we encourage is if someone has something that really excites them on a pro bono basis, they can do it. The pro bono partners don’t make policy decisions about what the firm will do in the area of pro bono. We’re there to encourage the interests people have.”
Beyond 2014
Bob Riley, Schiff Hardin’s chairman, spends much of his time recruiting lateral partners. His mass tort defense practice was a large reason why the firm started a New York office in 1991. And his recruiting efforts more recently led to the opening of a Dallas office in 2014.
Bob Riley
Photo by Michael R. Schmidt.
“We have a major-market strategy we’re using, and that’s a major market,” Riley said, referring to Dallas. “We’re always looking for people who want to make a career here. We’re not in the free-agency market. We want people whose reasons for moving suggest that they’ll actually be happy here and want to invest here over the long term.”
Safer said it’s still important for the firm to grow in size.
“We are stars to our clients. But we need to be stars to more clients. … We need to be better-known throughout the country. And one part of that is to grow and have more excellent lawyers, who have more client relationships, and then the circles grow larger and larger and your profile is greatest,” he said.
Dengel said the firm will continue to struggle with the balance that he said defines the firm: “That fundamental balance … between generating money such that we can attract and retain the best people and do the best work and balancing with that the cultural values of how we want to treat people.”
“We care to keep that thing in balance,” he said. “It’s sort of the essence of what we are that we care about that balance.”
As it turns out, it’s a balance that Hitchcock perfected more than a century ago.
“Mr. Hitchcock was a most benevolent man,” one of the other firm co-founders, Charles Dupee, said in Goodspeed’s biography.
“There was hardly a day in which calls upon his purse and sympathy were not made, and no worthy man or worthy cause ever went away from him neglected.”