Managing Legal
The key to cutting your company’s legal spending is not finding a lawyer who’ll work on-the-cheap. To cut legal spending (intelligently), pay – and don’t be afraid to pay well – for the legal help that you need.
Then ruthlessly avoid paying for what you don’t need.
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The legal profession’s prevailing business model designs its service offerings to defeat this strategy. Most law firms work this way. And the inefficiencies are compounded by the fact that most in-house counsel put up with it.
As a result, and as I described it in my most recent post, attorneys’ conventional service delivery loads up a lot of what you don’t need, to go with what you do need:
- Hourly quotas for attorneys encourage more lawyer time per task;
- This motivates a proliferation of lawyers on any given task — each lawyer with their own hourly quota; and
- This proliferation leads to insertion of recent law graduates alongside fully qualified attorneys to do the routine & repetitive work for which law clerks or paralegals are suited — but billed to clients at several hundred dollars per hour.
And these three waste-embedding traits discourage adoption of any technology that can materially increase the quality or efficiency of the legal tasks being performed. (See my December 13, 2019 post for elaboration on why I qualify this statement with “materially”: Law firms’ bread-and-butter work — what makes them most of their money — tends not to get automated. But there are some pain-in-the-neck legal tasks for which those firms can’t charge much — and, in a growing number of cases, law firms are using AI or other tech innovations to automate these tasks.)
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Axiom Law is a legal service provider whose offering strips away these wasteful add-on’s. And leaves the client company with what it needs: An accomplished, prestigiously pedigreed lawyer, who practices at the highest level of their particular niche.
Axiom describes itself as the “leader in specialized on-demand legal talent”.
How do they do this?
Mark Cohen, writing last week in Forbes.com (“Axiom Redux: Why Models, Capital, and Differentiation Matter in Today’s Legal Industry”), put it this way:
“Axiom recast legal practice by extracting experienced, pedigreed attorneys from the partnership model, affording them a sophisticated practice experience from an entirely different structure, economic model, and culture … Axiom lawyers engaged in practice activities but delivered them as a business service … The Axiom model also stripped out cost escalators with no customer value –expensive real estate, partner tribute and lavish expense accounts, etc. The savings were passed along to customers and reinvested in Axiom’s talent base.”
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During my 12 years as a business executive at Whirlpool Financial and GE, I worked with a general counsel whom I admired a lot. Someone who’d risen to be the top lawyer in his company.
For the past decade he’s worked for Axiom as one of its attorneys. Seconded as company counsel to businesses who need the professional mastery of an attorney who’s been the top lawyer in a prestigious corporation.
In his law practice under Axiom’s auspices, my friend delivers to his client companies the sophisticated legal services that they need from an attorney of his stature — but without conventional law’s wasteful add-on’s.
Notably, he does not bring along — and charge the client for — multiple, junior lawyers to “assist” him.
And his services are not billed by the hour.
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Finally, in the Forbes.com article quoted above, Mark Cohen likens Axiom’s business model innovation to that of another legal services provider that strips away wasteful add-on’s of conventional law — FisherBroyles, a law firm that I profiled in my post of December 6, 2019:
“FisherBroyles … also challenged the traditional partnership model and had a different structure, economic model, and culture than traditional partnership firms. Like Axiom, it created a collegial, flexible, profitable, client-centric delivery model designed to better align the interests of lawyers, firm, and clients. The firm has a flat organizational structure—all lawyers are partners. Its economic model was designed to create an internal marketplace where lawyers—not the firm—set rates and retain a significantly larger portion of collected fees. FisherBroyles lawyers have no billing quotas and can work flexibly.”
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So … for the lawyers you need — be choosy and pay them well.
But watch out for the “filler” cost elements that conventional firms add to (substantially) goose the bill.