Listen to this article
From one that considers Planet Earth its principal client to one that helps legal teams improve management of their data, law firms are experimenting with fresh business models. These new types of firm are emerging to fill gaps in the market, meet the changing demands of clients and tap into new technologies. In many instances, such shifts in structure stem from the Legal Services Act of 2007, which relaxed the rules on the delivery of legal services in England and Wales.
For others, however, the drive to offer new services is rooted in a recognition of the law as a force for change. “It is the only tool that can bind both government and the private sector,” says Alice Garton, senior lawyer and company and financial project leader at ClientEarth, which was set up in 2007 to protect oceans, forests and other natural resources.
Taking on the planet as a client is not the only unusual aspect of the firm’s business model. It is also a non-profit organisation, relying on funding from foundations and institutions such as the UK’s Department for International Development. “To act as lawyers independently but with a view towards the environment, we need philanthropic funding,” says Ms Garton.
If lawyers can help protect the planet, they can also — by representing multinational companies — help tackle another global challenge: corruption. As with climate change, poor governance creates risks for companies, particularly since the introduction of the UK’s Bribery Act in 2010.
After perceiving rising demand for due diligence and third-party risk management, Fulcrum Chambers’ founders set it up in 2010 as a specialist legal advisory and consultancy. With multidisciplinary teams that include corporate investigators as well as solicitors and barristers, the firm works closely with enforcement agencies.
As well as representing clients in court proceedings, the firm tries to prevent them being taken to court in the first place. “We see ourselves as more than a fire brigade when the fire is blazing,” says Ivan Pearce, Fulcrum’s joint managing director. “A lot of our work is in preventative areas like internal investigations and due diligence.”
The firm offers fixed fees to clients, rather than billable hours. “We’ve got to improve the relationship between the lawyer and the client, and financial concerns are at the heart of that,” says Mr Pearce. “It’s not just about how good you are. They’re worried about how much you’re going to charge them. If you can get that out of the way at the front end in a way that provides the client with certainty, the relationship is so much more positive.”
For Three Crowns (3C), it was a gap in the market for specialist international arbitration advice that prompted its formation in 2014. With offices in London, Paris and Washington, the firm has built teams with a range of skills, including solicitors, barristers and other legal practitioners from more than 15 jurisdictions who speak more than 20 languages.
By combining such range with intensive mentorship and in-house training, 3C aims to prove that clients do not need to go to large firms to settle international disputes. The strategy appears to be working: in its first year of operation, 3C had more than 100 mandates from blue-chip companies.
If creating alternative models is one way to compete with large firms, some of the new legal enterprises are providing new types of services. For Akber Datoo it was the growing volumes of negotiated financial instrument contracts at banks that prompted him to set up D2 Legal Technology (D2LT), which digitises and manages these contracts for in-house legal teams.
“Post-financial crisis we’re seeing incredible complexity in terms of new regulations,” he says. Complying with these rules is driving demand for D2LT’s services. Mr Datoo says banks gain a better understanding of the subtleties of what has been agreed in contracts for derivatives and other financial products once they have been digitised; banks can then choose those that make most commercial sense. “Going to a paper copy to work that out isn’t going to happen,” he says.
Mr Datoo sees technology as increasingly important in an industry where financial products take the form of complex contractual obligations. “To manage the risk, make more money and be compliant, it’s critical to understand those obligations,” he says. “And today, you do that through systems and data.”
|Most innovative law firms 2016|
|Innovation in New Models||Innovation in Resourcing and Efficiency|
|Innovation in Business Development and Knowledge||Innovation in Culture, Brand and Strategy|
Get alerts on Law when a new story is published