Technology

alt.legal: The 'Quiet Crisis' In Legal Revisited -- Riverview’s View on Non-Attorney Ownership

What are the advantages of non-lawyer ownership of law firms?

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Joe Borstein

Joe Borstein

As a friendly reminder, the views expressed here are strictly mine and do not reflect, in any way, the position of my employer, Thomson Reuters.

In my last article, LegalZoom Co-founder, Eddie Hartman, boldly argued the US suffers a “quiet crisis” in the legal market — where the public goes vastly underserved while lawyers remain underemployed. Eddie argued persuasively that bringing non-lawyers into the equity fold could remedy many of these problems, but the “U.S. legal profession refuses to act.”

We isolated four major advantages of non-lawyer ownership, which UK firms now have over their US counterparts (as a result of the Legal Services Act). In a nutshell, those advantages are:  the ability to leverage a multidisciplinary legal team; the ability to recruit top talent from other professions; allowing lawyers to focus on the law, and; higher quality work through integrated technology and workflows.

This week, I sat down with Karl Chapman and Andy Daws: the CEO and Chief Customer Officer of leading ABS law firm Riverview, and its technology subsidiary Kim. We explored each of the four advantages that the ABS structure promises from their unique point of view.

Enjoy!

Advantage 1: Multidisciplinary teams

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Eddie noted that “we’ve put a man on the moon, [] and it wasn’t just engineers [but] a huge [] multidisciplinary team.” He said plainly that without non-lawyer ownership, law firms “are operating in a framework that cheats the public of a public good.”

Joe Borstein: How has the ABS Model helped your teams solve large-scale “moonshot” legal problems?

Andy Daws: As Eddie’s “man on the moon” analogy implies, outside the legal industry the use of multidisciplinary teams to solve complex or multi-layered challenges is a given because it’s just common sense. Large-scale legal problems, or even routine legal work at scale, benefit from a similar approach. But the notion of bringing together a variety of professionals from different disciplines to work together as equals sits very awkwardly with the lawyer-centric model adopted by most traditional law firms.

The ABS construct helps to frame the benefits of a multidisciplinary approach, recognizing as it does the legitimacy of non-lawyer equity owners and decision makers as part of a modern regulated legal services business that is focused on putting the customer first.

Karl Chapman: No customer ever asks us whether we are an ABS, a partnership, an MDP… They are just interested in whether we have solutions that can assist them as they evolve their legal operating model. The benefits of being an ABS are primarily internal and organisational. We are a company. We are run by a board. We are interested in long-term capital growth. Unlike partnerships we do not distribute our profits at the end of each year.

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Advantage 2: Recruiting The Best

Eddie believes that the key advantage for ABS legal businesses is that they could attract the best global talent from other disciplines, and that law firms already understand this fundamentally: To attract legal talent, they offer a partnership track to equity. It’s the only way they can keep the best talent in the world working as hard as they do

JB: Has the ABS structure allowed you to recruit and retain better non-legal talent?

Andy Daws: Executed properly, the ABS structure can send a clear message to non-legal talent that this is a regulated legal business that recognizes the valuable contribution to be made by non-legal professionals. We’ve worked hard from the outset (even before securing an ABS license, in fact) to make sure the “one team” message is understood at all levels of the organization, and to reinforce this through our stated values, as well as our daily practices. Our lawyers are highly valued. So are our client managers, admin team, project managers, developers, data analysts, etc.

Not all ABS’s operate in the same way, of course, and the answer to the problem is both structural and cultural. There are now plenty of traditional law firms in the UK holding ABS licenses and the old adage has never been more true: It’s not what you’ve got, it’s what you do with it that counts! ABS was never intended to be a silver bullet, so much as a stimulus and catalyst to do things differently in order to promote competition, innovation and the public and consumer interest in the legal services sector.

The ability to incentivize non-legal employees in different ways and to give them a voice at all levels of the organization is an important part of our DNA and undoubtedly contributes to our ability to attract and retain top non-legal talent.

Karl Chapman: We don’t accept the concept of “non-legal.” We operate as one cohesive team. We reward people by: (i) their contribution, irrespective of role; (ii) what they say and do, and: (iii) whether they demonstrate our values.

Advantage 3: Lawyers Focus on Being Lawyers, not Tech Geeks or Administrators

Andy Daws

Andy Daws

LegalZoom put its money where its mouth is with their very own ABS license — finally purchasing UK conveyance firm Beaumont. Eddie wants to prove that “Beaumont’s clients will get work with the same duties, the same responsibilities the same level of services/attorney client confidentiality that they had in the past. And yet, the attorneys at Beaumont can now practice at the top of their licenses, because all the drudge work is taken care of for them.”

JB: Do your lawyers “work at the top of their license”? Can you give some examples of how the ABS structure allows that? 

Andy Daws: As you’d expect, we have lawyers working at all levels, and work hard to ensure that we have the right people working on the right things at the right time, because that’s a win-win for the customer, the individual and for Riverview. It’s not rocket science, but it can look a lot like it in an industry that’s seen little change in centuries and in which lawyers are often unfairly tasked with all manner of non-legal responsibilities they were never trained for (and perhaps have no interest in).

Inevitably, many of our current team have been recruited from more traditional law firms and they’re attracted to the opportunity to focus on meaningful legal work that’s commensurate with their experience and expertise. If they want to manage people, there are opportunities to do so. Others, for example, have chosen to combine their legal work with technology R&D, and that’s an increasingly important role within our technology-led business. It’s all about playing to people’s strengths and passions, which is common sense in most well-run business, of course.

Advantage 4: Integrating Top Technology and Workflow Yielding Customer Satisfaction and Decreased Error Rates

JB: In integrating technology, have you seen this increase in customer satisfaction? How about error reduction? Can you quantify that?

Andy Daws: Riverview’s acquisition of CliXLEX, a U.S. technology company with a powerful AI platform, in August 2015 was an important milestone in our transition from a legal services provider enabled by technology to a technology business with deep legal domain expertise. On one level the distinction may appear subtle, but on another it’s a fundamental shift that changes the way we approach our work and think about the “art of the possible” in an increasingly technology-centric paradigm.

Riverview’s New Jersey-based technology subsidiary, Kim Technologies, brings together the benefits of its AI platform with other strategic technology ventures such as a partnership with the AI department at the University of Liverpool. Until recently, it was unthinkable that a lawyer could automate an entire end-to-end workflow in a matter of hours with no development or IT input required, and produce rich MI and visualizations on-demand.

Kim’s unique patent-pending AI overcomes some of the challenges traditionally associated with machine learning and solves the problem of contextual variance that often plagues legal technology solutions. It’s also sector-agnostic — we are already engaging with a range of customers from other industries who recognize the benefits of virtually on-demand automation and analytics.

Emerging technologies like this are game changers and great examples of the type of innovation that the Legal Services Act was designed to promote and that the ABS construct helps facilitate with potentially greater access to capital and alternative ownership structures.

Karl Chapman: Our ultimate customer satisfaction measure is do customers renew and, critically, extend our managed service and technology contracts? They do! We don’t lose customers. Yes, we make mistakes but, because we’re so client focused, we always make sure that these are dealt with immediately and openly so that it builds customer confidence and trust. Our underpinning technologies support and drive behaviours and quality.

Joe Borstein is a Global Director with Thomson Reuters Legal Managed Services, delivering Pangea3 award-winning legal outsourcing services and employing over 1800 full-time legal, compliance, and technology professionals across the globe. He and his co-author Ed Sohn each spent over half a decade as associates in BigLaw and were classmates at Penn Law.

Joe manages a global team dedicated to counseling law firm and corporate clients on how to best leverage Thomson Reuters legal professionals to improve legal results, cut costs, raise profits, and have a social life. He is a frequent speaker on global trends in the legal industry and, specifically, how law firms are leveraging those trends to become more profitable. If you are interested in entrepreneurship and the delivery of legal services, please reach out to Joe directly at joe.borstein@tr.com.

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