Archive for the ‘Law firm business model’ Category

Innovative alternative offers value to clients

July 20th, 2012 by Altman Weil

A UK law firm, Dundas & Wilson, has developed a new “Legal Services Unit” staffed by paralegals to offer clients lower prices on routine work while still retaining their business. 

“The initiative, which Dundas is dubbing a “firm within a firm”, will see a nine-strong team of paralegals split across Dundas’s Scottish offices take on searches, filings, registrations, basic due diligence and document review and collation work.” according to Legal Week.

The firm’s Managing Partner explains:

“Clients are keen for their law firms to come up with innovative ways to resource their work and deliver new models that can improve efficiency.  The LSU allows us to provide clients with more flexible resource for volume tasks, but at the same time, retain the assurance of having work done by a leading law firm.”

Read it at Legal Week

Change agents in the legal industry

March 2nd, 2012 by Altman Weil

Paul Lippe calls them the “innovation ecosystem” in his latest post on the ABA Legal Rebels blog, The New Normal,  and assesses how innovative each player really is, including

  • Law schools
  • Large firms
  • Start-up firms
  • General counsel
  • Networks
  • Legal process outsourcers
  • New-technology vendors
  • Consultants and analysts
  • Less-sophisticated clients
  • Litigation finance companies

Large firms score lowest on Lippe’s rating scale.  He explains:

“…the bigger firms have three problems: a weak decision-making model that is dominated by the most influential partners who benefit most from the status quo, a lack of experience outside their monoculture, and a management horizon that is very short-term.”

Top innovators are start-up firms, LPOs and new-technology vendors who “are showing the power of ‘Google-ization’ of law.”

Read it at ABA

Outside ownership of law firms

January 30th, 2012 by Altman Weil

Momentum is building on non-lawyer ownership of UK law firms since the Legal Services Act took effect in October 2011. 

Last week:

“Liverpool’s Silverbeck Rymer is set to be acquired by software and outsourcing firm Quindell Portfolio in one of the first takeovers of a law firm under the Legal Services Act…

The deal, which requires approval by the Solicitors Regulation Authority (SRA), will create a combined insurance claims outsourcing operation.”

Read it at Legal Week

And this morning:

Australia’s Slater & Gordon, the world’s first publicly listed law firm, is set to acquire UK personal injury specialist law firm Russell Jones & Walker (RJW) for £53.8m in a Legal Services Act first…

Slater & Gordon became the first law firm ever to go public after listing on the Australia Stock Exchange five years ago.

Slater managing director Andrew Grech commented

“The UK market is inherently attractive to us because of its size and its jurisdictional similarities to Australia which the recent changes bring even closer into line. We have the huge advantage of having a five-year head start in operating in a listed environment and we can bring that experience to the UK through a kindred firm in RJW which has the business structure and the people to exploit that advantage.

“The goal is to be the leading direct consumer brand in the UK.”

Read it at Legal Week

Non-Lawyer ownership of US firms

December 6th, 2011 by Altman Weil

The ABA Commission on Ethics 20/20 has issued a draft report on Alternative Law Practice Structures in the US.

“An American Bar Association commission is considering recommending that nonlawyers be allowed to take an equity stake in law firms for which they work while urging that an existing ban be maintained on the kind of outside investment in U.S. firms that is now possible in the United Kingdom and Australia.

If the panel’s recommendation moves forward, the move to let nonlawyers own a piece of firms that employ them would not become an ABA model rule for more than a year, and would still need to be adopted by individual states. While all 50 states currently ban such nonlawyer ownership of law firms, Washington, D.C., has allowed it for more than two decades.

At the same time, the ABA’s Commission on Ethics 20/20 came out firmly against any move that would open the door to law firms becoming either publicly traded entities or multidisciplinary practices designed, for example, to serve as one-stop shops accounting and legal needs.”

In the draft report, the Commission sets forth these guidelines for outside ownership:

  • Such law firms would be restricted to providing legal services;
  • Nonlawyer owners would have to be active in the firm, providing services that support the delivery of legal services by the lawyers (i.e., the firm cannot be a multidisciplinary practice);
  • Nonlawyer ownership and voting interests would be restricted by a percentage cap sufficient to ensure that lawyers retain control of the firm;
  • Nonlawyer owners would be required to agree in writing to conduct themselves in a manner consistent with the Rules of Professional Conduct for lawyers;
  • Lawyer owners would be responsible for both ensuring that the nonlawyer owners in their firm were of good character and supervising the nonlawyers in regard to compliance with the Rules of Professional Conduct.

Read it at The AmLaw Daily

AmLaw leaders look to 2012

December 1st, 2011 by Altman Weil

The American Lawyer has released the results of its ninth annual survey of leaders of Am Law 200 firms—and the picture they paint is not particularly rosy.

“… nearly a third (29 percent) of respondents said they expect their once-bustling corporate practices to be their most challenged practice group next year. Barely any respondents—just under 2 percent—said they anticipate a significant increase in deal flow in 2012, while 36 percent expect it to be flat. Meanwhile, many firms are seeing collection times lengthen: Forty-three percent of respondents said their clients are taking longer to pay, with one law firm leader explaining in an interview that 90 days is the new 30. And while almost all respondents (98 percent) said they expect to raise rates next year, only 5 percent anticipate hikes of more than 5 percent.”

What’s a law firm to do?  The survey points to a few key areas that firms will focus on in 2012:

  • Business development - especially through key client relationships
  • Hiring laterals with books of business - although survey respondents note that laterals often fail to meet expectations
  • De-equitizing unproductive partners
  • Improved efficiency - including project management, knowledge management and staffing alternatives
  • Alternative fees - with firms finally starting to figure out how to make them work effectively

Welcome to the new normal…

Read it at The American Lawyer

Technology as competitive advantage

November 17th, 2011 by Altman Weil

Two items in the legal press this week highlight law firms’ search for improved efficiency, cost control and collaboration through enhanced technology.  Two firms - one traditional AmLaw100 firm and one out-of-the-box virtual firm – are working on customized technology solutions that caught our attention:

Sutherland Asbill has developed Legal Project Management software in a collaborative pilot project that included their attorneys, business development professionals, practice managers and technology group. 

The team designed a matter-level dashboard that “contains charts that track the status of spend vs. budget for the matter, links to the iManage folders for the matter, a Task Assignment tool, and a Project Schedule tool.  Users also have access to the ‘askSutherland’ knowledge management tool, our docket management system, and other resources.  The project team also can set up a ‘team discussion’ space as well as single repository for any reports required by the client.”

Read it at Law Practice Today

Clearspire, a new virtual law firm that has the benefit of starting from a blank slate without any legacy systems, has built a customized law practice and business management platform called Coral.  Blogger Ron Friedmann describes it:

“Coral is a complete desktop and office environment that encompasses not just document creation / editing and e-mail, but a range of other functions, including real-time communication / collaboration, project management, and financial analysis.

… the firm built Coral from the ground up to meet new client demands for better value, with features to serve clients, lawyers, and the firm’s business managers. Key design goals included ease of use for “non-techie lawyers”, collaboration within the firm and with clients, scalability, and the ability to break substantive legal work into separately priced and managed discrete activities (”chunks”).”

Read it at Prism Legal

Will computers replace lawyers?

October 24th, 2011 by Altman Weil

Advances in technology and artificial intelligence are aggravating factors in the struggling job market according to a new e-book, Race Against the Machine.   And law firms are not immune.

“Erik Brynjolfsson, an economist and director of the M.I.T. Center for Digital Business, and Andrew P. McAfee, associate director and principal research scientist at the center, are two of the nation’s leading experts on technology and productivity. The tone of alarm in their book is a departure for the pair, whose previous research has focused mainly on the benefits of advancing technology.

Indeed, they were originally going to write a book titled, “The Digital Frontier,” about the “cornucopia of innovation that is going on,” Mr. McAfee said. Yet as the employment picture failed to brighten in the last two years, the two changed course to examine technology’s role in the jobless recovery.

The authors are not the only ones recently to point to the job fallout from technology. In the current issue of the McKinsey Quarterly, W. Brian Arthur, an external professor at the Santa Fe Institute, warns that technology is quickly taking over service jobs, following the waves of automation of farm and factory work. “This last repository of jobs is shrinking — fewer of us in the future may have white-collar business process jobs — and we have a problem,” Mr. Arthur writes.”

The authors conclude: “In medicine, law, finance, retailing, manufacturing and even scientific discovery…the key to winning the race is not to compete against machines but to compete with machines.”

Read it at the New York Times

Last spring Altman Weil asked in a survey if US Managing Partners could envision computers replacing any timekeepers in their law firms in the next 5 to 10 years. 

Read it at Altman Weil

Law firm staffers offsite and outsourced

October 19th, 2011 by Altman Weil

Pillsbury Winthrop announced this week that they will move their back office staff to Nashville to reduce costs.

“The firm plans to send back office functions including information technology, finance, new client intake, and word processing to the country music capital by next year.  The move, announced Tuesday, puts Pillsbury on a path blazed by Orrick, Herrington & Sutcliffe, which has housed administrative staff and low-cost lawyers in Wheeling, West Virginia, for almost a decade, and Wilmer Cutler Pickering Hale and Dorr, which has been sending non-legal work and document review to an office in Dayton, Ohio, since last year.”

“It’s a competitive marketplace,” says Pillsbury chair Jim Rishwain. “Law firms need to find better ways to add value to clients in a very difficult economy.”

Also this week, O’Melveny & Myers announced they will cut 75 staffers and move their work to an an outsourcing company.

Read it at The AmLaw Daily

New law firm business to staff in-house departments

October 13th, 2011 by Altman Weil

UK law firm, Eversheds has launched a new business ‘Eversheds Agile’ to supply temporary contract lawyers to their clients on an on demand basis in the UK, Europe, Asia, Africa and the Middle East.  The service will also provide temporary administrative staff. 

Eversheds partner Graham Richardson said: “This is an entirely new offering to the market in that it’s a flexible service with the backing of an international law firm and all the resources that entails. We will review the pilot in a year but every indication is that this is a long-term solution for our clients’ counsel staffing needs.”

Read it at Legal Week

The power of the GC - continued

September 21st, 2011 by Altman Weil

Will much-talked about change in the law firm–client business model come from law firms or from their clients?  A new article in Corporate Counsel comes down squarely on the side of the client, and specifically the General Counsel.

“Unfortunately for law firms, the future of the legal industry will actually be presided over by the general counsel of the largest 5 percent of corporations, who among them control more than half of the $100 billion U.S. corporate legal services market. In fact, even within this small population, 80 percent of the market is controlled by a mere 200 GCs. These are the men and women who control the fate of the entire legal industry.”

How will it happen?

The author foresees a select group of activist General Counsel who will lead the charge, first by getting their in-house departments in order; “segmenting” or disaggregating legal work (i.e. categorizing work for “law firms, in-house teams, lawyers in India, contract administrators, software programs, etc.”); and then applying this new discipline to its outside providers.

When?

“There’s certainly no stampede under way, which, given all the talk, is curious. But a herd is forming, and I believe that within 12 months we’ll see segmentation or other change-management exercises under way in earnest across the majority of the Fortune 100. Thoughtfully and proactively remaking an industry allergic to change will require serious leadership. That leadership will come, not from law firms, but from their biggest clients. And it’s just begun.”

Read it at Corporate Counsel

Read our post on a recent Oxford University study with a slightly different take on the same topic