Eighteen months ago I met the general counsel (GC) of a FTSE 250 company to listen to his plans to parcel up parts of his deals, based on complexity, and hand each chunk to a different panel adviser based on skillset, capability and cost.
Until very recently, this level of micro-management – and the prospect that law firms would no longer be handed a deal lock, stock and barrel – was not going down well. Not long after meeting this GC, I sat between two well-known managing partners at a dinner and listened to them assert matter-of-factly that this sort of tinkering round the edges would never become mainstream.
You can see their point. Few GCs have replicated this model so far, often lacking the resources, skills and will to see through such disaggregation. For all the talk of new ways of working, most hassled clients still default to easier ways of cutting costs, like straight discounts and moving to slightly lower-cost providers.
But relatively slow progress is some progress at least and GCs won’t let it go. And there has also been a discernible shift from private practice itself – particularly from the larger firms that have traditionally been the most deaf to client requests for cost-effective solutions.
When even the City’s most storied firms are willing to shake-up their own model you can tell something
has changed.
Notably, as we cover on page 12, Allen & Overy (A&O) has just unveiled a new resource for clients staffed by experienced freelance, often alumni lawyers. This service is being targeted at a ‘high level’ says managing partner Wim Dejonghe, and will help clients through peaks and troughs in demand rather than provide a lower-cost service. However, it is a major step for a Magic Circle firm and has been touted internally as a venture that could potentially grow hugely if it strikes a chord with clients. With some firms, that would be just talk but not A&O, which pioneered deploying near-shoring with its service centre in Belfast. A&O’s venture came only a month after we revealed that Slaughter and May has begun offering key clients such as Vodafone the option to use Carillion’s low-cost legal outsourcing arm for the commoditised and quasi-legal portion of certain deals.
If A&O’s venture sounds familiar, that is because it is, deploying elements of the flexible contract lawyer service seen at Lawyers on Demand and Axiom. The symbolism is A&O becoming the first top-tier global player to put its muscle and brand behind such a business, which means experimenting with a separately branded team using a different business model. The firm debated long and hard whether to have its own name on the initiative but instead opted for a separate brand, Peerpoint.
The sensitivities around the impact on the parent brand will continue but when even the City’s most storied firms are willing to shake-up their own model you can tell something has changed. It will be interesting to see if law firms – who have far more time to refine and reinvent their own models if they feel inclined than clients – will start pushing faster than GCs in terms of service innovation. This more creative mood looks set to last into 2014.