General counsels face continued pressure to control legal spending. One increasingly popular way to save is to use an “alternative legal service provider", a company that charges less than large law firms.
A few forward-thinking law firms have developed their own alternative services. One of the earliest instances I recall is UK-based Berwin Leighton Paisner (BLP). Several years ago, it developed a lawyer staffing business, Lawyers On Demand (LOD). LOD has won innovation awards from the Law Society, The Lawyer, the FT Innovative Lawyer, and InnovAction (College of Law Practice Management).
In May, the firm announced it was spinning off LOD as a separate company within the BLP group (see article in The Lawyer). So I was pleased to be able to interview Simon Harper about LOD. He is a co-founder and, up until the spin out, was a BLP partner.
Ron: Why Lawyers on Demand?
Simon: About five years ago, my co-founder Jonathan Brenner and I observed that clients in the UK wanted a more flexible way to buy legal services. We saw an opportunity to provide high-end lawyers to corporate law departments on a staffing basis, offering a flexible resource with an effective hourly rate significantly lower than law firm rates.
Ron: Why the Spin-Off?
Simon: LOD has been very successful in the last five years. To ensure we can continue to grow, we need additional flexibility. So in May, BLP announced that it would spin-off LOD into a separate entity and retain 80% of the new entity. Being separate gives us a couple of advantages. One is that we can develop our own management style and models. Both BLP and LOD know that the track record of UK and US law firms managing non-traditional models within their business is mixed at best. We wanted to avoid those issues. And second, as a separate entity, with our own identity, we can service the needs of other law firms, a growing market for us. We have already provided lawyers to and had numerous inquiries from other firms. Being separate, I believe we will be able to convert more of the inquiries to working relationships. Even before the spin-out, clients understood they were working with individual LOD lawyers and not retaining BLP – that will continue moving forwards.
Ron: How Does LOD Compare to Legal Process Outsourcing?
Simon: LOD is quite different from LPO. LPO focuses on high volume tasks. The providers routinize and document tasks so that relatively junior personnel can perform the work. In LPOs, most work is performed by workers trained as lawyers but neither the workers nor the providers practice law. In contrast, our lawyers do practice law. Moreover, they are quite experienced and work on tasks not easily routinized or documented. BLP recognized this distinction early on and, in fact, also offers its Managed Legal Service (MLS), which assumes responsibility for all or part a corporate legal function to produce significant annual cost reductions – this can also include partnering with an LPO provider to deliver work in lower cost centres, both onshore and offshore.
Ron: How Does LOD Compare to Legal Staffing Companies, Specifically Axiom Law?
[Editorial Note about Axiom Law: Prior to Axiom’s founding around 2001, lawyer staffing companies focused on providing contract lawyers for high volume projects, primarily document review in litigation. In contrast, Axiom placed former Big Law associates and partners on multi-month assignments in the offices of general counsels. These experienced lawyers offered specialized expertise and worked on high-end projects. By eliminating law firm overhead and partner profit, Axiom can pay its lawyers a good wage, charge much less than law firms, and still earn a profit.]
Simon: Axiom entered the UK market six months after we did but we viewed this as good news; it validated the LOD model and market need. LOD is different from Axiom in at least two respects. First, our lawyers working with corporate counsel teams have the support of BLP know-how, resources and training, and second, we do sell to law firms.
Ron: What is the Attraction for Lawyers to Join LOD?
Simon: We offer lawyers more autonomy and flexibility than law firms (and most corporate counsel teams) regarding how much they work but with the benefit of BLP’s law firm brand. For example, lawyers might choose to work only 10 months in the year or three days per week. Initially we thought that most would choose LOD because of family reasons. It turns out that there are many reasons top lawyers want flexibility. For example, some pursue creative endeavors or are passionate about hobbies, others simply want a change or to avoid workplace politics. The flexibility turns out to be attractive – we receive more than 50 resumes for each lawyer that we take on to the LOD team.
Ron: Can lawyers work part days? Remotely?
Simon: So far, short days have rarely been an option but we have seen little demand for that from lawyers. Clients agree the work location with the LOD lawyers, which is usually the client’s offices, though some lawyers do work remotely and I expect there will be more remote work in the future.
Ron: What Role Does Technology Play in LOD? In allocating lawyers?
Simon: We offer a bespoke [customized] human service. So technology has not been a significant factor in our operations though I expect that will change over time. We are currently investigating options to systematize further our allocations process.
Ron: Will LOD Become an Alternative Business Structure (ABS) in the Future?
[Editorial Note: The UK deregulated its legal market this year, allowing non-lawyer ownership of law firms through the ABS. The number of ABS applications to date as exceeded what most market observers expected.]
Simon: Our business is not capital intensive so we see little advantage in outside investment or that form of business structure. The de-regulation has, however, created a climate very favorable for our service.
[Editorial End Note: For those who would like to learn more about LOD, I recommend an article by Simon Harper in Managing Partner, Dec 2011/Jan 2012, Flexible Staffing.]