Most Lawyers Resist Even Modest Changes, But This Group Targets a 50% Cut in F500 Corp’s Legal Budget (Part II of III)

The bold collaboration I described in Part I of this series among Univar’s General Counsel Jeffrey Carr, the law firm ElevateNext, and law company Elevate Services is just the latest chapter in legal innovation for each of them.

Their respective lengthy and successful records of accomplishment in legal innovation are important.

As with most other things in life, it’s more instructive to watch what folks have actually done than listen to what they say.

The law firm:

Nicole Auerbach and Patrick Lamb are founders of the new law firm announced in connection with this collaboration: ElevateNext.

Auerbach and Lamb co-founded Valorem Law Group, LLP, a litigation boutique which since 2008 has pioneered something that lots of law firms tout but that few actually implement: Alternative legal fees — they don’t bill their clients by the hour.

Lawyers’ ability to tell clients in advance what they can expect from those lawyers — and then stand behind their commitments commercially — is an underdeveloped skill in the legal industry.

It’s a lot easier to total up work hours after-the-fact. And the fact that the math often ends up being friendlier to attorneys might also have something to do with the billable hour’s persistence (see post here).

Nicole Auerbach and Patrick Lamb of ElevateNext have been perfecting their skills in implementing alternative fee arrangements — with a disciplined refusal to bill by the hour — for an entire decade in full view of the rest of the legal industry.

Ditto for their pioneering work in applying project management methods to their representation of clients (see posts here and here).

The law company:

Call it an “alternative legal service provider”, an “outsourcer” to law firms and in-house departments, or — as Elevate Services calls itself — a “law company”.

Basically, a law company — or “alternative legal services provider” –performs tasks related to legal matters that most law firms and in-house departments are not set up to provide.

For one thing, a law company is usually a real “company” — with non-lawyers who are shareholders, executives who know how to design business processes rather than throw bodies at tasks, and deep technology expertise. And — unlike the average law firm — they’re more likely to view their own business in terms of earnings-per-share than profit-per-(law)-partner.

What does a law company do? No strict definition, but a law company tends to be good at legal tasks that benefit from a more “business-like” organizational setting and capital structure, such as:

  • Managing tech systems using artificial intelligence to review thousands of digital files for litigation disclosure in e-discovery rather than traditional use of recent law grads or contract attorneys,
  • Using machine learning to conduct M&A due diligence, or
  • Deploying a proprietary application to review thousands of contracts to update their compliance status in light of a new IRS regulation.

For example: Elevate Systems teamed up with Kira Systems — a provider of contract review technology — to help Baxter International spin off one of its divisions. Elevate Systems contracted with Kira Systems to identify contracts of the relevant division that required legal review and developed a work flow credited with saving $500,000 and more than 5,000 hours of review time.

Elevate Services and Axiom Global were identified as the two leading law companies or alternative legal service providers in a leading industry study announced last November.

(For clarity, in addition to technology and business process expertise, law companies, or alternative legal service providers, employ lawyers as well — in material numbers. Elevate Services is reported to employ 400 lawyers, and Axiom Global has been reported (August 2017 source) to employ over 1,500.)

Finally, the client — Univar’s law department as led by Jeffrey Carr — is no newcomer to the innovative management.

In Part III I describe why I believe that the client in this collaboration is  unusually well qualified to drive its success in cutting total legal budget by 50%.

(In Part I I offered an overview of this collaboration.)