Hildebrandt International - Company Profile, Information, Business Description, History, Background Information on Hildebrandt International

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History of Hildebrandt International

Formed by a 1999 merger between Hildebrandt Inc. and Hodgart Consulting, Hildebrandt International is the world's largest company providing consulting services for law firms, government and corporate law departments, and also accounting firms and other professional services firms. It has advised most large law firms in the United States and the United Kingdom, and many others as well, on strategic planning, mergers, firm finances, retirement systems, lawyer burnout, information technology, and other management issues. In addition to its main offices in New Jersey and London, the combined company maintains offices in Chicago; Naples, Florida; San Francisco; New York City; and plans one for Germany.

Origins and Early Years of Hildebrandt Inc.

Bradford W. Hildebrandt, the founder of Hildebrandt Inc., was born in 1941. In 1975 he started his own consulting firm Hildebrandt Inc. to advise law firms on how to improve their management practices. The firm's cofounder was Jack Kaufman, who had earned a University of Wisconsin B.A. degree and an LL.B. at Case Western Reserve University. He had worked ten years as a Cleveland law firm administrator. Kaufman served as Hildebrandt Inc.'s president, while Bradford Hildebrandt was chairman.

In 1975 Bradford Hildebrandt published Financial Management for Law Firms, which covered various accounting options, record keeping, cash management, compensation and employee benefits, retirement planning, and partnership agreements. In his book, Hildebrandt thanked "all of the partners of Reavis & McGrath who have over the last five years given me a great deal of assistance and who have in many ways made this book possible." He also thanked Jack Kaufman, president elect of the Association of Legal Administrators, a group founded by Hildebrandt. In his first book and throughout his career, Hildebrandt stressed the importance of using good financial principles that "can easily become the catalyst that divides a firm or, conversely, can help provide a stabilizing, objective force within the firm." In addition, in those early days of the first personal computers, Hildebrandt emphasized, "Today, it is economically feasible for even the smallest firms to consider utilizing computer technology." Effective use of technology remained a key service provided to Hildebrandt clients throughout its history.

The increasing size and business orientation of law firms influenced the origins of Hildebrandt Inc. Before World War II, there were few large law firms. But the postwar American economic boom fueled the need for more attorneys. Plus, court rulings starting in the 1960s opened up new kinds of litigation, as described in several books on the so-called "litigation explosion." In the 1970s a U.S. Supreme Court decision resulted in more advertising by lawyers and other professionals. Some law firms increased their hiring of top attorneys from competing firms after Steven Brill in 1979 began publishing The American Lawyer, which examined salaries and other internal law firm practices. Some attorneys complained that the law was becoming just another profit-oriented business and was losing its professional nature. In any case, sound management became more important as firms expanded far beyond their earlier size, say from 50 to 250 or even 500 or more attorneys.

Naturally, different firms tried different management practices. Author Laurel Sorenson in 1984 wrote, "Phones are jangling coast-to-coast as lawyers trade tips on the latest management and personnel practices: part-time positions, flextime, maternity and paternity leaves, extended leaves of other sorts and sabbaticals." More attorneys wanted to balance a career with family life and other outside interests. "It's a difficult adjustment, but the order is clearly changing," said Hildebrandt Inc. President Jack Kaufman in the July 1984 ABA Journal.

With law firms growing rapidly, Bradford Hildebrandt and Jack Kaufman in 1984 published The Successful Law Firm to help large law firms deal with substantial issues such as mergers, partner compensation, and long-term planning. A February 1984 review in the ABA Journal stated, "If your law firm is considering employing a management consultant, this book would be a good starting place before your decision to hire, not because it tells you how to hire a consultant, but because it outlines the approach a consultant will take in the analysis."

The consulting firm's 1989 assistance to merger negotiations between the 92-lawyer firm Cole & Deitz and Chicago's Winston & Strawn illustrated Hildebrandt's services. Bradford Hildebrandt's previous experience with both firms helped bring them together. He had worked with the 300-lawyer Chicago firm for three years and helped it decide to build a strong New York office. Hildebrandt also had helped reorganize Cole & Deitz. No personality clashes blocked the merger between the two firms, which had similar practices. It was just a matter of Hildebrandt helping the firms resolve tax and retirement issues before the merger could move ahead.

Corporate law departments also hired Hildebrandt consultants. For example, CBS hired Hildebrandt in 1988 to conduct an efficiency study of its in-house law department, which had already decreased from 75 attorneys in 1985 to 42 in 1988. Two earlier consultant studies of CBS as a whole had been completed, but George Vrandenburg, vice-president and general counsel for CBS, wanted the Hildebrandt analysis of just the law department because "you can always get some independent views and maybe learn something," according to the May 10--16, 1988 Manhattan Lawyer.

Hildebrandt consultants advised clients not only on attorney matters but also on paralegals and staff needs. For example, in the second half of the 1980s law firms found it increasingly difficult to recruit skilled legal secretaries. Although secretarial salaries had increased, more women became attorneys and paralegals. Law firms tried different tactics to find and retain secretaries, including better pay, more flexible schedules, increased training, supervisory positions, and career options.

In the 1980s Hildebrandt Inc. expanded along with its client base. In 1989 Hildebrandt Inc. opened its eighth office in Houston, Texas. It was started by Allen L. Cleveland, formerly an attorney with the Houston law firm of Fulbright & Jaworski.

Hildebrandt in the 1990s

The decade started with more growth; in 1990 Hildebrandt Inc. started its first overseas office in London, but the firm closed that office in 1993 and also closed its Houston and Dallas offices in the 1990s. With the economic downturn around 1990, many law firms faced bad times. The November 30, 1990 New York Times said "trendmeister" Bradford Hildebrandt previously "spread the gospel of growth. More recently, he has amassed millions of frequent-flier miles evangelizing a creed of leanness-is-meanness, spreading apocalyptic visions of smaller profits or worse to firms that fail to tighten their money belts."

In 1991 Hildebrandt Inc. surveyed the 500 largest law firms to see how they had responded to the economic challenges. Of the 105 firms that responded, 60 percent reported asking partners to leave in the previous 18 months, more than 93 percent said they had fired associates during that same period, and the large majority said they planned to fire even more associates in the near future. The American Bar Association president said he was surprised at Hildebrandt's findings, especially the fact that so many partners had been dismissed.

Obviously many in the legal community paid attention to Hildebrandt's views. "Mr. Hildebrandt makes his name in the press&mdash oracle, soothsayer, trendmeister," said writer David Margolick in 1990. "In legal periodicals, his name appears more often than some bylines."

In the early 1990s Hildebrandt Inc. recommended that the New York law firm of Shea & Gould end its operations. Earlier the firm, on Hildebrandt's advice, fired more than 70 individuals, including 20 partners. Power struggles and internal conflict, however, led to Shea & Gould's demise on January 27, 1994.

In 1994 Hildebrandt Inc. formed alliances with two firms. First, Hildebrandt and the accounting firm Ernst & Young agreed to work together without merging. Hildebrandt sent clients to the accounting firm for assistance on litigation support and employee compensation and benefits. On the other hand, Ernst & Young referred its legal clients to Hildebrandt since it had closed its own inhouse legal consulting department two years earlier.

Second, Hildebrandt signed an agreement with Synergetix Systems to help its technology consultants provide law firms and other clients with improved systems integration and maintenance. The fact that some large law firms used hundreds of computers showed the importance of Hildebrandt's technology consulting. Curt Meltzer, the head of Hildebrandt Inc.'s technology division, recommended that law firms with at least 30 lawyers hire a full-time information systems director.

Hildebrandt consultants dealt with not only organizational issues, but also psychological factors. For example, Steven Berglas, a clinical psychologist with Harvard Medical School and Hildebrandt Inc., worked with business leaders to overcome their anxiety and fears of losing touch with advanced technology and new expectations in the marketplace, including new rules on sexual harassment. Interviewed in the September 8, 1997 Fortune, Berglas said, "Many people at all levels of companies now are, in effect, living in a foreign country: They don't know what the rules are anymore." Berglas, the author of The Success Syndrome: Hitting Bottom When You Reach the Top, included hundreds of executives among his clients.

An example of the law firm mergers with which Hildebrandt dealt occurred in 1998. The consulting firm helped unite the San Francisco firm Thelen, Marrin, Johnson & Bridges, with about 200 lawyers, and Manhattan's Reid & Priest, a 150-lawyer firm, to become Thelen Reid and Priest. In the April 6, 1998 New York Times, Bradford Hildebrandt said, "We are in the beginning of an enormous consolidation of the legal industry, much like what happened to the accounting firms 10 years ago ... it is going much faster than anytime before."

In 1998 Hildebrandt also worked with one of the nation's most famous, or infamous, law firms--the Rose Law Firm of Little Rock, Arkansas, well known from its association with the Clinton administration and the Whitewater scandal. In March 1998 the firm's partners held a special meeting at which Hildebrandt's Don Akins presented them with his 75-page report based on interviews and surveys. Akins advised the firm either to change its leadership and compensation methods or to dissolve the partnership that had been started in 1820 by U. M. Rose. The Rose Law Firm, which had declined from 56 to 44 lawyers by March 1998, decided to fight to stay alive. They accepted Akins's counsel to change their loose democratic management system, which had allowed little accountability and thus permitted partner Webster Hubbell's embezzlement and conviction, to one run firmly by Ronald M. Clark, the chief operating officer. Whether or not these changes helped in the long run remained to be seen.

In the 1990s Hildebrandt Inc. ran The Hildebrandt Institute, described in its literature as "the unparalleled leadership skills training program" for law firm leaders. Headed by Carl A. Leonard in San Francisco, institute workshops in three years "trained over 600 managing partners, practice group leaders, marketing partners, and executive directors, throughout the United States, Canada, and Europe to rave reviews." Leading attorneys, consultants, psychologists, and others from within and outside the legal profession taught classes on lawyer morale and burnout, information technology, marketing, and practice management. One-day workshops cost $1,750, and two-day workshops cost $2,750.

Hodgart Consulting and Its 1999 Merger with Hildebrandt Inc.

In 1990 Alan W. Hodgart founded Hodgart Consulting in London to provide management consulting services to law firms and other professionals. With an M.A. from the University of Cambridge and other studies at the University of Melbourne, Hodgart worked several years with management consulting giant McKinsey before starting his own firm. By 1999 his firm had served large law firms, accounting firms, and chartered surveyors in the European Union, the United Kingdom, Eastern Europe, Australia, and other parts of the world. His clients included Eversheds, Frere Cholmeley Bischoff (before half of that firm merged with Eversheds), Simmons & Simmons, Lawrence Graham, DJ Freeman, Watson Farley & Williams, Taylor Joynson Garrett, and Bird Semple.

In the early 1990s Hildebrandt Inc. rejected a merger with Hodgart Consulting because of cultural differences. Then in 1996 Hodgart allied with the Pennsylvania consulting firm Altman Weil Pensa, said to be Hildebrandt's major competitor. The Hodgart-Altman complete merger failed, however, in 1998. Altman was disappointed that so little work was available for European inhouse law departments; such clients in the United States provided about 25 percent of its work. Unlike Altman, Hodgart wanted to expand its consulting to other professionals aside from lawyers, especially with the increasing prospects of multidisciplinary partnerships (MDPs) being formed.

In 1998 Hildebrandt and Hodgart still were competitors. Hildebrandt was expanding its presence in Europe, while Hodgart was planning to go head to head with Hildebrandt in the United States. "Our game plan was to take them [Hildebrandt] on at the strategy end, which we thought was, not weak, but it's their weaker area," said Alan Hodgart in the Illinois Legal Times. "We were looking at putting together a small firm in New York, pinching some consultants from elsewhere, and trying to set up a four- or five-consultant office in New York." Some clients had hired both consulting firms for advice.

Everything changed in late 1998 when by chance Alan Hodgart ran into Bradford Hildebrandt at London's Savoy Hotel. The next night the two men met again. In an hour they agreed to merge, effective May 1, 1999. They planned to keep their existing offices and open a New York office in early 1999, and they discussed opening a German office. The merged firm, including Hodgart's nine consultants, featured a professional staff of 36. Bradford Hildebrandt chaired Hildebrandt International, and Alan Hodgart headed it strategic planning practice and served as one of its 11 directors.

In the May 1999 Illinois Legal Times, Joel Henning, the head of Hildebrandt's Chicago office, said that by 1999, "What changed are the people in Alan Hodgart's organization. We now find his entire organization to be really compatible with ours. That wasn't the case a number of years ago."

The possibility of mergers between London and New York law firms stimulated the merger of the two legal consulting firms. Bradford Hildebrandt, for example, already had flown back and forth across the Atlantic to advise his firm's clients on such consolidation. "Everyone is talking about it," said Bradford in the March 18, 1999 Wall Street Journal, but at that point it had not yet happened. Since several American and Canadian law firms had merged, several global alliances of law firms had operated since the late 1980s, and consolidations among multinational corporations were becoming more common, many expected the imminent merger of some American and European law firms.

Both Hildebrandt Inc. and Hodgart Consulting agreed that MDPs presented new opportunities for consultants. The American Corporate Counsel Association approved such innovative partnerships in February 1999. C. Randel Lewis, Hildebrandt International's managing director, said in the April 1999 Worldlaw Business, "We are very interested in the rise of the MDP. We want to be the principal advisers in that area."

The 1999 merger also was designed to deal with increased competition. The Big Five accounting firms, particularly PricewaterhouseCoopers and Arthur Andersen, were providing legal services through affiliated law firms as well as advising law firms on management issues. Each accounting firm had more than 1,500 lawyers working internationally. Major business consulting firms, such as McKinsey, Bain & Company, and the Boston Consulting Group, had not worked much with law firms because most were relatively small, but it was believed that that might change as law firms grew larger from consolidation and internal hiring.

Globalization impacted corporations, law firms, and the consultants who served them. The Internet and electronic commerce was changing business practices worldwide. Some critics argued that business consultants could be a waste of time and money or even hurt their corporate clients. So Hildebrandt International faced many challenges and new opportunities as the new millennium approached.

Additional Details

Further Reference

Barker, Emily, "Thomas Gelbmann Takes Dorsey & Whitney High Tech," American Lawyer, May 1991, p. 12.Barrett, Paul M., "Drive To Go Global Spurs Law-Firm Merger Talk," Wall Street Journal, March 18, 1999, p. B1.Carter, Terry, "From Bum's Rush to Bum Rap: Rose Law Firm Rebuilds After Improper Shredding--of Its Reputation," ABA Journal, July 1998.Clarke, Caroline V., "Secretary Sweepstakes," American Lawyer, January-February 1990, p. 32."Consultants Merge for Transatlantic Service," Worldlaw Business, April 1999, pp. 1--2."Death of a Law Firm," International Financial Law Review, March 1994, p. 2.Fisher, Anne, "Why Are You So Paranoid," Fortune, September 8, 1997, p. 171.Flaherty, Kelly, "Hildebrandt To Merge with U.K.-Based Consulting Firm," The Recorder, April 1, 1999.Fung, Vigor, and Amy Dockser, "Two Large Canadian Law Firms Plan Merger That Upsets Provincial Tradition," Wall Street Journal (Eastern edition), October 10, 1988, p. 1.Hildebrandt, Bradford W., Financial Management for Law Firms, New York: Law Journal Press, 1975.Hildebrandt, Bradford W., and Jack Kaufman, The Successful Law Firm, New York: Prentice Hall Law & Business, 1988."Hildebrandt, Meet Hodgart," Illinois Legal Times, May 1999.Jacobs, Deborah L., "Efficiency Study Has In-Housers at CBS Fearing Further Cuts," Manhattan Lawyer, May 10--16, 1988, p. 3.Margolick, David, "At the Bar," New York Times, November 30, 1990, p. B5(L).O'Shea, James, and Charles Madigan, Dangerous Company: The Consulting Powerhouses and the Businesses They Save and Ruin, New York: Times Business, 1997."Practicing What They Preach," Legal Week, April 15, 1999, pp. 10--11.Robinson, Tony, "Cole & Deitz, Chicago Firm Ironing Out Merger Details," Manhattan Lawyer, April 18--24, 1989, p. 5.

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