David Teece speaks with Matt Getz, a partner and highly experienced practitioner at Pallas Partners. They discuss Pallas’ expansion in New York, the changes the firm made in the midst of the pandemic, and the “why” behind its recent launch.
View previous episodes of the podcast.
[00:00:40] David Teece: Hello, my name is David Teece, and I’m the executive chairman of Berkeley Research Group and a professor at the University of California, Berkeley.
In this episode, I’m speaking with Matt Getz of the elite litigation boutique Pallas. We’ll discuss some exciting news about the launch of this new firm.
We’d love to hear a little bit about what the vision is behind Pallas, and why you decided to develop a new law firm with a point of difference.
[00:01:08] Matt Getz: As we speak, we are actually two days away from the one-year anniversary of Pallas’s founding. We started on February 1, 2022, coming out strong out of the pandemic, and it’s been a very good year. But going back to that start, we saw a real gap in the market for a high-end litigation and disputes team based in London and New York. We’d already been operating the London office of Boies Schiller for some time. We’d been, you know, quite autonomous. We saw that there was plenty we could do, and there was real space for people like us. And also, we’re fortunate that we’re different from other law firms because, starting from scratch, we’re not shackled by years of bureaucracy or ways of doing things in a certain way.
We’ve got the chance to set the culture and the values for the firm and look at the way that we can improve the client experience by gaining the absolute right people to serve the clients, and things like creating optionality in how they want to be charged. We can also look like a new kind of law firm. You know, for example, we place responsibility and sustainability at the heart of the firm. And our staff—partners, associates, the business support team—are involved in shaping the strategy, defining what you want to stand for, and setting challenging targets to ensure accountability.
So for example: By 2025, we pledge to achieve diversity parity, become carbon neutral, and increase our community support to 5 percent of our resources—all things which go to who we think we are and should be as a firm. And I’m happy to report that we are well on target for all of those and, in fact, have achieved some of them a little early.
[00:02:38] Teece: You talked about innovation, you talked about diversity, and you talked about inclusion and presumably innovation with respect to diversity and inclusion. So you mentioned on the innovation side the way that you charge clients or the billing arrangements that you might have. Can you go into other elements of client service and then maybe the business model on your side of the fence that’s different from, say, the mainstream law firms?
[00:03:01] Getz: All our lawyers have experience in all our main areas. We don’t, strictly speaking, have practice groups. Everybody has experience of a lot of the kind of work that we do, both at the associate and the partner levels, so that, with our clients when they come in, they have access to a team of lawyers with deep experience across our focus areas to make sure that they’re provided with seamless advice.
In terms of billing, it’s always something that clients are concerned about. It’s difficult to move entirely away from the billable hour; there are certain areas that one can’t—say criminal defense—but we spend a lot of time with our clients and others looking at alternative fee arrangements. Looking at contingency fees as much as we can. Damages-based agreements, fixed fees, staging. And we are always open and innovative and flexible with the clients in a way that I think larger firms have some difficulty being.
[00:03:53] Teece: This all comes along with being very boutique-y, but as you grow and scale, are you going to be able to maintain those systems and approaches, or do you plan not to scale?
[00:04:04] Getz: That’s a really good question. We are right now around 25, 30 lawyers. I think if we were a 1,000-lawyer firm, it would be very difficult to do that. So, there is clearly a point between here and there where that becomes difficult. And some bureaucracy becomes inherent and necessary to keep things going.
We have a firm focus. Our firm focus is on high-end disputes. One of the advantages of not having practice groups is that we don’t have silos. I know all the other people in my office, I’ve worked with all of them. We’re not going to get to a thousand lawyers. If we got to a thousand lawyers, that wouldn’t be the same, but I think there’s quite a lot we can do between now and then to maintain our culture. When people join, they know what it is they’re joining, and they want to be a part of it. I think there’s a lot more growth before this really becomes an issue, but it requires very close supervision.
[00:04:30] Teece: Tell me about New York and in particular how New York and London play together.
[00:04:35] Getz: It’s really important for us to be in New York because a lot of our clients are in London and New York. We have a lot of financial service clients. We work with a lot of funds and banks.
And what’s terrific is the growth that we’ve already seen in a very quick time. Some of them we’ve worked closely with for years, and there’s some great new blood in there. But I think it shows: if you’re in those two poles, then you’re really playing where it matters. We love the rest of the world, but I think New York and London is going to be our place.
And for the work that we do elsewhere—because we’ve got a very international focus—we’re going to continue working with the best-of-breed law firms in all the different countries because I think that’s the best for our clients. We continue to have quite a lot of success in operating multinational cases, including things that have parts in Spain, Germany, Italy, France, from the UK. I think our job of being global coordinating council is fine. And because we know so many good lawyers in Frankfurt, and so many good lawyers in Madrid, I’m not sure that I’d want to open an office there and have to stop working with them. But we are going to grow in London and we’re going grow in New York.
[00:05:45] Teece: Crypto must be an interesting and stimulating ride right now in terms of the issues that are coming up, and it seems like that’s ideally suited to your background. Tell us a little bit more about your crypto capabilities.
[00:06:29] Getz: There are two aspects to it. One side is seeing crypto as something different and new and learning about that. And the other is to see where it fits into your already existing skillset and what you can do about it. I’m going to start on the second first.
We have got a whole set of crypto bankruptcies that are happening. You know, in the US it’s a big deal, and there are a few in the UK as well. To a large extent, much of the experience and the expertise that we’ve gained working on bankruptcy and restructuring litigation over the years applies there as well. It’s the same kind of frauds. It’s the same kind of preferences. It’s the same kind of mismanagement. There may be questions as to what is the property. But the courts have been quite useful in saying, “Well, this is something that we need to cut through quickly, and we’ll tell you what property is.” So, we now have a good understanding of that. In that regard, we look at crypto and we say, okay, we can work out what needs to be done, what strategies and what tactics are in the industry and how we can help clients, both on a defensive and an offensive side. That’s where things are kind of the same, not identical. You know, in every case, every bankruptcy is different, every litigation is different. But there are commonalities.
And then there are the areas where it’s different. And in particular, some of my areas, we don’t have silos, but I have a bit more of a specialism in investigations and financial regulation and some of that on the regulatory side. Some of it is really different. Some of it you really need to consider how it fits into the different boxes, what the crypto companies need to do, and what their regulators need to do.
And there are a few aspects of that. One is, I don’t want to say that we want to be ahead of the regulators, because that’s what some companies say and that gets them into trouble. But we want to make sure that we know more than the regulators do, because I think they’re playing catchup a bit. So in that regard, we’ve spent time with people in the crypto industry. We’ve spent time with computer science experts in that about how the crypto world works. And how it should work from a regulatory point of view, and then, over time, from a criminal point of view.
And we’ve had a fair amount of success there. And it’s an interesting area that’s just going to keep on growing, there’s no doubt about that.
[00:08:35] Teece: Very, very interesting and indeed, in that public education and assisting the regulators, Berkeley Research Group can join with you. Because we’ve actually done a lot of background research there as well, and it would be good to put the legal and the financial and economic side together. So I’ll come back to you on that point.
[00:08:51] Getz: There really are synergies between law firms and other professional services firms, like Berkeley Research Group. Where you have certain types of experts and expertise that law firms generally don’t. And that’s why we like working very closely with our peers at firms like yours.
[00:09:05] Teece: And it won’t trouble you either that you’re a Stanford graduate and we have Berkeley in our name?
[00:09:0] Getz: I’ll get over it for the good of the client.
[00:09:12] Teece: We’ll work on that as well. Let’s see where it goes.
We talked about innovation a little bit. You said you had set some targets for yourself, that you’ve met those targets. I’m particularly interested in the environmental target that you set, what you’ve done, and how it’s different from mainstream law firms.
[00:09:29] Getz: I think law firms have felt over the years that we are not a producer of goods. We’re not a minus. We don’t have to do anything, but I feel that that’s not the case, and we feel that that’s not the case. So what we do in terms of, as I say, usage and in terms of things like recycling and rubbish and travel and all that—that’s important.
But it plays a very active part in our pro bono and our community support. Pro bono is incredibly important to us, but we can’t do everything. What we’ve done is focus very much on the environmental side in some of our pro bono work. For example, we are doing a rather large piece for ClientEarth, which is an environmental NGO, against the directors of Shell in relation to climate change.
[00:10:11] Teece: So, coming back to travel. COVID assisted a little bit in as much as depositions often are done online now. Is that the same in the UK? Do you push hard to have meetings online rather than face to face? And if so, where do you insist on face to face? Unquestionably the courtroom, but anywhere else?
[00:10:35] Getz: I think there are a number of aspects to it, and I think COVID was a real opportunity in some ways to see what can be done. Obviously, we’re not doing everything in the same way as we were during COVID, but from a litigation point of view, we found that it made a lot of quite positive changes. For a long time, obviously all the courts here went—almost all of them—went to remote hearings and remote work. Since the end of COVID, we’ve gone into court quite a lot, but the commercial court, in particular, is spending more time online and allowing more of the interlocutory hearings to be done online.
In terms of clients, I find it really interesting. I now see a lot of clients more often than I used to on video. You know, the video has replaced quite a lot of phone calls. And it allows you to really check in with them more often and to take the measure of how things are going more.
There are certain times where you absolutely want to sit in a room with your clients. And also, at the start of a relationship, I still find it very useful, you know, to spend time together and to get to know exactly what it is that the client wants, because sometimes you need to spend some time working on that. It’s one of the most important things for me to discover. How can I help them? That’s not always obvious.
And the third point is internally, during COVID, we spent a lot of time and effort making sure that we stayed in touch with each other, and that especially the junior staff felt that they were supported? And we did as much as we could on video.
Now that we’ve largely come back to the office, we have people back in the office at least three days a week; we have meetings between us and the other members of the staff to make sure that we know exactly what’s happening with everybody. We are all people who work together, and we find that if we have facetime together, it helps for a happier, more productive, more collaborative, more cooperative office. I like being able to video my colleagues when we’re in different parts, but it’s also very important for me to sit in a room with them. Because very often, you talk about something which is not exactly the thing that you got together to talk about, and it turns out to be extremely useful and helpful and productive, because you didn’t know what it was that you needed before you started talking.
[00:12:50] Teece: Yes, indeed. And as you come back to the office, how do you manage the more junior folks around back-to-the-office moves?
[00:12:58] Getz: I think we’ve been very lucky. For some time now, we’ve been on a hybrid model, and what’s important is that two of those days are the same. Everybody’s supposed to be in on Tuesdays and Thursdays, which is a time for us to really collaborate and cooperate. And I think we’ve been fortunate in that we actually have not had pushback. People have been happy to do this. I find that the members of the firm have been happy to come back into the office and to work together on those times.
I think, without blowing our own horn, it’s not just fortunate. It’s also that we spent quite a bit of time picking the right people. When we hire our associates, when we hire the business support staff, we’ve hired people who really want to be part of the organization and stay with us because they like the people that they’re working with.
So it actually hasn’t been as difficult as I’ve heard it from some other firms. It’s constant work, you know. And we need to keep making sure that everybody is engaged and is happy. We have a number of people, both junior and senior, who are there four, five days a week, even though they don’t have to be, which I really welcome.
[00:14:05] Teece: Yes, I was just in London, and I observed that Thursday has become the new Friday in terms of reservations, traffic, and so forth. Perhaps more amplified than I’ve noticed in the US.
[00:14:16] Getz: And the pubs on Thursday evening are absolutely chock-a-block.
[00:14:21] Teece: Well, Matt, this has been very insightful. Thank you very much, and we’ll talk soon.
[00:14:26] Getz: Thank you so much, David. I really appreciate the opportunity.