The 21-Lawyer Exit That Tests the Economics of the Modern Law Firm
On October 1, a group of Washington insurance lawyers did something more consequential than change letterhead: they separated a recognized specialty from the multipractice institution around it. The launch of Tyka Law LLP by 21 lawyers departing Wiley Rein LLP raises a question familiar to smaller firms but rarely asked so plainly in large ones: how much of a client's loyalty belongs to the lawyers, and how much to their firm?
The new practice has 12 founding partners and nine other lawyers. Managing partner Ben Eggert and founding partner Kim Melvin previously co-chaired Wiley's insurance practice. Tyka is based in Washington, D.C., and intends to represent insurers exclusively.
The Practice That Walked Out
The departure is substantial, though its consequences should not be overstated. Above the Law noted that Wiley had previously described its insurance group as a 35-lawyer practice, placing the 21-lawyer departure in a context larger than an ordinary partner move. The publication characterized the split as a case in which the lawyers, their specialization and longstanding carrier relationships could continue without the economic machinery of a large firm. That is an argument about professional services economics, not proof that particular client engagements have transferred.
Tyka's October 1 announcement described the venture as "focused exclusively on representing insurers." Its specified fields include directors-and-officers liability, cyber and privacy, professional errors and omissions, general liability, and emerging artificial-intelligence exposures. The emphasis is on familiar work under new ownership, not a promise to reinvent legal advice.
The Client Relationship Test
Insurance coverage is particularly suited to testing client portability. Insurers frequently instruct repeat counsel on technically similar problems, while individual cases can involve sprawling litigation and considerable exposure. The Insurer, reporting the launch on October 2, described the firm's intended remit as extending from securities and derivative litigation to investigations, ransomware incidents and professional-liability claims.
But a portable reputation is not the same as a portable client. The receiving firm still has to clear conflicts, establish engagement terms and persuade institutional legal departments that its staffing, cybersecurity, billing and geographic reach meet procurement expectations. Even clients loyal to individual partners may prefer to retain some matters with the established firm.
The advantage for a narrow boutique is the absence of departments that clients rarely use but may indirectly support through rates. Its disadvantage is that technology, insurance, compliance and business development must be financed over a much smaller revenue base. Lower overhead is a possibility, not an automatic result of independence.
The Middle-Market Calculation
For founders running firms of 20 to 60 lawyers, Tyka presents both a competitive threat and a useful counterexample. A cohesive team with established relationships can now compete for premium instructions without the entire apparatus of BigLaw. Yet a midsize firm's more varied bench may appeal to clients who need litigation coupled with employment, corporate or regulatory advice, and who find a single-discipline boutique too narrow.
Partner economics sharpen the distinction. Twelve partners among 21 lawyers leave relatively little associate leverage. That may suit sophisticated matters requiring senior attention, but it puts pressure on realization rates, utilization and disciplined staffing. Founders considering similar departures should examine which clients would actually engage the new entity, which costs would survive the move, and how much revenue could be lost to conflicts or transitional friction.
Competitive positioning requires similar care. Pure boutiques can offer concentrated expertise; large firms can provide extensive institutional resources. A midsize practice occupies the territory between them, where complementary specialties, partner accessibility and manageable costs can become advantages, provided those benefits are visible to clients.
The most revealing outcome will not be the launch itself. It will be whether Tyka can preserve recurring institutional work while supporting a partner-heavy structure—and whether Wiley can sustain a competitive coverage offering alongside it. For midsize firms, the lesson lies less in getting smaller than in knowing precisely what clients are paying to keep.
