'The Economist' Examines Emerging Alternatives to Traditional Law Firms
In an article last week, The Economist takes a look at a few ways that technology is providing clients with alternatives to traditional law firms. These alternatives include things like LawPivot, which some have compared to "Quora for legal advice." [Note to self: Learn what Quora is so that I can possibly then understand what LawPivot is.] They also include "unconventional law firms" such as Axiom and Clearspire that are pursuing new business models.
I have mentioned Axiom before, noting its highly personal approach to the law firm website, which includes huge, day-in-the-life photos of Axiom lawyers doing things like gardening, having breakfast with their families or dancing. The Economist adds that Axiom, which is now 11 years old, has been able to grow its revenue steadily as companies seek ways to trim their legal spending: from $55 million in 2008, to $80 million in 2010, to an expected $120 million in 2011. Axiom differs from most firms in that it typically does not charge by the hour, but rather agrees to a flat fee for a project or for a set period of time that one of its teams will be engaged. It is also different from most law firms in that it employs only experienced lawyers, maintains little office space and charges significantly lower rates than most big law firms (about $200 an hour for highly experienced lawyers, according to a Daily Journal article written in early in 2010).
Another law firm discussed by The Economist is Clearspire. Clearspire is made up of approximately 20 lawyers who work from home but "collaborat[e] on a multi-million-dollar technology platform that mimics a virtual office." Clients can use the platform, as well, to do things like make changes to their own documents. With respect to billing, The Economist states that
From the start, Clearspire offers cost estimates for each phase of a legal job. Employees who underestimate how long it will take cannot simply jack up the billâthey must take the hit themselves. But if a lawyer finishes his work faster than promised, he gets a third of the savings. The client also gets a third, as does Clearspire. This gives everyone a stake in making the process more efficient and predictable.
Clearspire also has an unusual, dual corporate structure: it consists of a law firm with salaried lawyers, and also a separate entity that is responsible for business development.