Technology

New Law Firm/LPO Partnership Aims To Cut Corporate Legal Spend By Half

The longer-term goal of the collaboration is to build something that can be provided to other mid-market legal departments.

By  
on

For corporate legal departments, legal ethics rules leave them stuck between a rock and a hard place. If they are ever to achieve meaningful reductions in legal spend, the services of their outside counsel would need to be tightly integrated with cutting-edge technology and legal process management. But rules that prohibit non-lawyers from investing in law firms inhibit such integration.

The founders of the new law firm ElevateNext believe they have the solution to free legal departments from this bind and deliver the full range of services and technology they need. The firm plans to do that by closely aligning itself with the legal process outsourcing company Elevate. The firm will provide the legal representation and Elevate will provide the LPO services and technology. To the client, it will all be seamless.

Not only are they launching this firm, but they are also developing a proof of concept. ElevateNext and Elevate are partnering with the in-house legal team at Univar, a global chemistry distribution company, to design, build, and operate what they are calling “the law department of the future.” Their goal: Show that they can reduce legal spend by 50 percent.

Behind all this are names who are no strangers to legal innovation. The founders of ElevateNext are Patrick J. Lamb and Nicole Nehama Auerbach, who a decade ago started Valorem Law Group in Chicago with the aim of smashing the billable hour. Elevate’s founder is Liam Brown, who originally founded Integreon before selling his stake to start Elevate. The general counsel at Univar is Jeffrey W. Carr, best known for his years as GC at FMC Technologies, where he created the Alliance Counsel Engagement System (ACES), designed to upset the traditional billable hour structure by rewarding outside firms for efficiency.

And if any of this sounds reminiscent of Clearspire, there is reason for that. Mark A. Cohen, Clearspire’s cofounder and managing partner, is chair of Elevate’s advisory board and has helped guide and shape the launch of ElevateNext.

Clearspire, which opened in 2010 and shut down four years later, pioneered the dual-entity concept. The law firm, Clearspire Law, promised high-end legal work delivered efficiently, collaboratively, and transparently, at fixed prices. The service company, Clearspire Service Co., supported the firm’s business operations and infrastructure and developed a custom software platform, Coral, to support the law firm.

Last September, Atrium LLP launched based on a similar model, promising to “revolutionize legal services” and backed by big-name Silicon Valley investors, but prompting me to ask in a column here whether it wasn’t just a case of Clearspire déjà vu.

Sponsored

In an interview last week, Auerbach and Lamb credited Carr with inspiring the launch of ElevateNext. “He’s always had this view that there needs to be transformational change in the way that law departments work,” Lamb said. “His position at Univar provided the opportunity for him to test his hypothesis.”

Key to that hypothesis, they say, is that legal departments should be able to work seamlessly with all their moving parts, whether they are internal business units, external service providers, or outside law firms. “As Jeff says, ‘Whether you receive a W-2 or a 1099, you’re all my law department,’” Lamb said.

In a separate interview, Brown echoed that idea. When he started in the LPO business, clients came to him wanting unbundled commodity work. Now, they want him to provide full services. But ethics rules prevent him from giving them that. “Customers become frustrated because we’re an embedded part of their law department and then we have to send them off to an outside law firm.”

Achieving that seamlessness is the reason Auerbach and Lamb aligned this new firm with Elevate, rather than operate through Valorem (which will continue in business). “We think it’s important to have the seamlessness, and to invest in the manner in which Elevate has built its own brand,” Auerbach said. “So it really will be seamless for their clients and our clients — so much so that they won’t really know who’s doing what.”

Operationally, ElevateNext’s role will be akin to that of a prime contractor. It will provide direct legal services and strategy, hire lawyers and services as needed from Elevate (which itself employs some 400 lawyers), and contract out to other firms when appropriate.

Sponsored

Elevate will continue to provide the services, process consulting, and technology it already offers, both directly to legal departments and in association with ElevateNext. Its cloud-based Cael enterprise legal management technology will serve as the backend for the work. In addition, Elevate will develop integrations with other technologies used by legal departments so they operate as a single platform.

The longer-term goal of the collaboration with Carr is to build something that can be provided to other mid-market legal departments.

“If we can do this for Jeff, we can do it for other legal departments,” said Auerbach. “Jeff is the test case, if you will. As we’re working with Jeff, we’re designing what we’re doing so it is easily replicable and utilized by other law departments.”

“We don’t think that every law department will buy this template,” said Brown. “But we think they will see how they can, within two years, go from where they are to becoming a more business-managed, more business-disciplined law department.”

Robert Ambrogi Bob AmbrogiRobert Ambrogi is a Massachusetts lawyer and journalist who has been covering legal technology and the web for more than 20 years, primarily through his blog LawSites.com. Former editor-in-chief of several legal newspapers, he is a fellow of the College of Law Practice Management and an inaugural Fastcase 50 honoree. He can be reached by email at ambrogi@gmail.com, and you can follow him on Twitter (@BobAmbrogi).

CRM Banner

Topics

, , ,