For what is likely to be an evolving subject, Patrick Dransfield and David Miles spoke to a small number of the new and not-so-new players across the broadening spectrum of international legal services to find out how the perfect storm of client demand and technological advancement is facilitating a “jurist revolution” of legal services.
“Eden is burning, either brace yourself for elimination Or else your hearts must have the courage for the changing of the guards”
After carefully studying GE, management consultant Peter Drucker famously asked the then newly installed chief executive Jack Welch a simple question: “If you weren’t already in this business, would you enter it today? And if the answer is no, what are you going to do about it?”The question is relevant to all established law firms — especially those with international practices — as we enter a paradigm shift in the delivery and perceived value of corporate legal services. Make no mistake, there is genuine fear and concern out there among law firms.
“We are all terrified of the Axiom model,” one Hong Kong-based managing partner told us, sotto voce.
Before the global financial crisis, few managing partners of major global law firms would have said, hand on heart, that their firms were focused solely on their clients’ interests and needs.
But since then, many law firm partners have been going through the five stages of grief — denial, anger, bargaining, depression and acceptance — and some have gone the whole gamut, swiftly moving from complete denial to: “I always told you so.” Some are just wondering why the phone has stopped ringing.
“We do appear to be in a legal services revolution,” says Beaton Capital’s Nick Seddon. “The root cause is the dissatisfaction of the buyers of legal services and the feeling that the traditional law firms have just not been really listening. The clatter we hear now is the sound of clients taking to the streets!”
As our New Spectrum of Legal Services illustrates, this may be both the worst of times and the best of times to be in the business of providing legal solutions — the worst if you are hoping to remain static on the traditional path of practising law, and the best if you are embracing technological solutions and a new, refreshingly client-orientated mind set.
“Our mission is to empower our customers to manage their legal work themselves,” says Daniel Walker, co-founder Dragon Law, one of the new kids on the legal block.
This technological shift has been coming for a while. Indeed, quite a few established law firms are already embracing this change and proactively partnering with New Law and legal process outsourcers.
Today, new solutions for clients embracing artificial intelligence (AI), for example, are as likely to come from Big Law innovators as they are to come from the resource-constrained start-ups.
“It is an incredibly exciting time to be in the technology of law,” says Lucy Dillon, chief knowledge manager at Reed Smith, as she describes how the next five years will bring a seismic shift in the delivery of legal services as lessons are learned from outliers such as the medical industry, and the potential and limitations of AI are explored in the legal industry.
At the other end of the spectrum, some innovations represent slightly more marginal gains, such as the north-sourcing trend in the UK, whereby firms migrate certain legal work to, for example, Belfast, where the cost per hour of a qualified lawyer is considerably less than in London. And there is something to be said for it. Indeed, most innovative in this category is Clyde & Co, through its joint law venture with West Link, which takes advantage of the lower cost base of Chongqing compared to Beijing and Shanghai, as well as providing clients with a seamless local service in areas such as litigation across China.
The UK is providing some of the most fertile ground for legal services start-ups, after the adoption in 2011 of Alternative Business Structures (ABSs) that let lawyers and non-lawyers set up legal providers as one-stop shops. Radiant Law, Riverview Law and F-Lex are all children of the ABS structure, and London is also home to lawtech startup community Legal Geek.
“Through this community we are seeing a number of disruptive technologies, such as AI, changing the way legal services are delivered,” says Jimmy Vestbirk, co-founder of F.Lex and a member of the Legal Geek family.
Our New Spectrum of Legal Services is intended to illustrate and provide examples of the various providers of legal solutions now available to the buyers of legal services. It is not intended to be encyclopaedic or exhaustive. We will continue to follow these developments and we look forward to hearing about more new start-ups and innovative solutions and services, which we will share with the In-House Community.
As veteran commentator on the legal industry, Richard Susskind, has put it: “The competition that kills you does not look like you.”
Allen & Overy and Peerpoint
Allen & Overy creates bespoke solutions by combining initiatives, namely Peerpoint, aosphere (e-tools simplifying complex global regulation), the Legal Services Centre (analysis of high volumes of legal material) and Technology & Project Management.
Peerpoint connects the firm’s clients with a panel of senior lawyers who have the skills and expertise to support major transactions, regulatory change and gaps in resourcing. The firm says that it shapes opportunities to support its consultants’ ambitions and, by understanding its clients’ requirements, matches the right consultant with each particular environment and need. All consultants are endorsed by two partners, have access to internal know-how and while on assignment have the support of an A&O partner sponsor and client relationship contact.
Working with RAVN Ace, BLP created the UK’s first contract-review robot. “Our lawyers worked with RAVN to develop or ‘teach’ the robot how to perform the same job that our human reviewers were carrying out during the document review process,” says Bruce Braude, head of strategic client technology at BLP. “It can even cross-check data against external sources.”
The project was initiated within the firm’s real estate disputes practice group and is a rare example of lawyer-led technology innovation. By implementing RAVN Ace Braude says the firm has eliminated errors and inefficiency in document review work, and enabled its lawyers to focus on higher value work for clients.
Stephen Hopkins, partner and Head of Global Client Development at Eversheds, says the firm takes pride in its role a s a positive market disruptor. During the past 20 years, Eversheds has led the move away from the traditional legal service model towards an approach that is aligned to what clients actually need. “We have created new ways of delivering legal services by putting our clients in control of the legal budget,” he says. “Our clients now decide what Eversheds will be paid.”
Realising that the practice of law is a series of repeatable processes, the US-based Hickey Smith team has challenged everything about the existing law firm model. “We designed a law firm from the ground up that delivers the kind of innovation and fundamental change clients are demanding,” says managing partner David Hickey. This involved breaking down the legal process at each step, reengineering it to maximise efficiency, infusing it with technology that automates routine tasks and eliminating the waste.
Reed Smith is responding to client demand in a variety of ways. It keeps a team of staff attorneys in the US to work on routine matters, which allows it to manage the workflow and the quality first hand, while offering a more cost-effective outcome for the client. The firm has also embraced the benefits of rapidly evolving legal technology, offering automated documents to its lawyers and clients, as well as automated proofreading and interactive tools to collaborate with clients on complex, multi-party transactions. “We are increasingly looking to artificial intelligence tools to help with document analysis,” says Lucy Dillon, the firm’s chief knowledge officer. “These resources do not replace lawyers, but enable our teams to focus on the more complex issues and add real value to a transaction.”
RPC Perform is a team of general counsel consulting specialists who advise in-house legal teams on a wide range of strategic and operational issues. With many years of GC consulting experience, they advise on best practice in operational efficiency, performance management and everything in-house teams need to know to make a real difference to the businesses they serve. RPC Perform also works to help enhance in-house leadership skills and provide people management, team development and coaching support.
ZICO has adopted an innovative business model to capitalise on developments in the Asean region. The ZICO Law Network, supported by ZICO Holdings, listed on SGX Catalist market, operates under a multi-disciplinary structure supported by a shared service company, which facilitates cross-selling of services. “Disruptions in the legal industry call for a flexible business model leveraging the benefits of BigLaw, NewLaw and NonLaw,” says Chew Seng Kok, chairman of ZICO Law. “This business model offers the best of all worlds, combining the strengths of the partnership model, a hallmark of Biglaw firms, with the flexibility of a corporate structure which is more suitable for NewLaw and NonLaw. This unique platform provides our clients with a dynamic range of integrated services in a more efficient and cost-effective manner, throughout the life cycle of their business.”
Riverview provides what it describes as “legal input, business output” to the in-house legal, risk, contract, compliance and related functions through three service lines — managed services, projects and licensed technology. “We help in-house teams evolve their operating model so that the right work is done by the right people at the right price, whether the work is undertaken internally or externally,” says Adam Shutkever, chief operating officer at Riverview. “We license our service delivery and workflow platform to in-house teams of all sizes. This proven technology automates processes, helps team members make better and quicker decisions and is underpinned by comprehensive reporting and dashboards.”
Radiant combines legal judgment, process rigour and technology expertise to unlock potential and enhance legal value around commercial contracting in large organisations. The company aims to solve the real problems faced by clients who need to enter into the right contract quickly and cost-effectively, and then ensure that the contract really delivers. “We work with in-house teams to improve efficiency and free up their time to focus on the more strategic, high-complexity work that will add more value to the business — and our fixed-price model provides budget certainty and ensures that our solutions are entirely aligned with the interests of the business,” says Serena Wallace-Turner, Radiant Law chief operating officer and previously co-founder of Axiom’s Asia offices.
Korum offers flexible and experienced legal consultants on demand, using a team of consultants from a range of industries and backgrounds, from start-ups to large corporate firms and multinational companies. The team includes paralegals to general counsels and law firm partners with deep sector and practice experience. “Korum is not a law firm nor do we charge law firm rates,” says Titus Rahiri, general counsel and director of the company. “Korum offers flexible pricing models which are at least 50% better value than law firms. We are looking to do things differently — we can work on-site integrated with the client’s team or remotely; whatever works best for the client.”
Korum also offers consultancy and advisory services such as training and development, and legal process and project management.
Axiom is a leading provider of technology-enabled legal and contracting services, and the global pioneer in creating a new model firm that combines legal experience, technology and data analytics to deliver work in a way that dramatically reduces risk, cost and cycle-time. Axiom comprises more than 1,500 lawyers, process engineers and technologists who serve over half the Fortune 100 across 19 offices and five centers of excellence worldwide. Axiom seeks to minimise the impact of work volatility through its secondment business by providing clients with the right people promptly, helping them to manage their visible and hidden costs effectively, and allowing them to realign senior internal counsel to more business-impacting matters. “Our strength lies in our geographic scale, years of experience in the business of law, and our process-centric approach to legal work,” says Kirsty Dougan, head of Asia at Axiom.
Axiom / Ashurst joint services
Axiom’s first-of-its kind partnership with Ashurst was put together as part of Axiom’s approach to innovating the way banks’ approach regulatory remediation exercises. Under the terms of the coordinated market offering, Ashurst supplies legal advisory services in relation to uncleared margining reform while Axiom offers technology-enabled legal execution and end-to-end project management. “The combined offering allows clients access to world-class legal advice seamlessly combined with a more modern, cost-effective and reliable approach to this complex regulatory repapering work,” says Chris DeConti, executive vice-president of the global banking practice at Axiom.
Integreon is a legal process outsourcer that supports clients with various services including contract management, litigation document review, compliance initiatives, staff sourcing and due diligence in corporate transactions, and features a research division.
“The mission of Dragon Law is to change people’s perception regarding legal services and not to disrupt the legal market per se,” says Daniel Walker, the company’s chief executive. With operations in Hong Kong, Singapore, New Zealand and Malaysia, Dragon Law takes online template documents and adapts them specifically to each individual legal jurisdiction, while more bespoke online services are available on a monthly subscription basis. The service is considered by its founder to be complimentary to the services provided by law firms to work with law firms to make the whole service more efficient, using bespoke documents built by technology. “We believe we are the fastest growing company in the Asian legal space,” says Walker.
An autonomous, wholly owned subsidiary of the global law firm Dentons, Nextlaw Labs is a global collaborative innovation platform focused on developing, deploying and investing in new technologies and processes to transform the practice of law. Through complementary and strategic partnerships with leading technology companies, startups, other business accelerators and established legal vendors, Nextlaw invests in promising companies. “Our goal is to create an innovation ecosystem that brings together external and internal sources of innovation, to incubate legal services innovations and accelerate their deployment into the marketplace,” says Dan Jansen, chief executive of NextLaw. “This opportunity requires a new and different structure that will represent the disruptive cutting edge of legal professional services.”
Patrick Dransfield is the publishing director of ASIAN-MENA COUNSEL and co-director of In-House Community. David Miles is the former partner, executive committee member and chairman of Asia for Latham & Watkins. He is currently chairman of Asia Community Ventures.