Practical Law Company is proud to be recognized in the below article as a company representing the future of law and “one of the most inventive legal-field operations in the nation.” Read more about PLC, inside.

THE FUTURE OF LAW PRACTICE TOMORROW: A Sneak Preview FOR THESE FIRMS THE FUTURE IS NOW

The Category Creators: Serving the Other 80 Percent By STEVEN T. TAYLOR In 1998, Harris was an associate at New York megafirm Davis Polk & In the midst of a turbulent legal market, Wardwell when he happened to see a bill going out to a client for a mat- would be wise to heed these ter he’d worked on. The bill equaled words: “It is not the strongest of the spe- his entire annual salary—and it only covered services rendered for Janu- cies that survive, nor the most intelligent, ary and part of February. He realized then that whatever other money he but the one most responsive to change.” pulled in for the firm for the rest of the year would either be spent on over- That’s from a guy who knew a thing or two head or line the partners’ pockets. “After that I quickly became ob- about change—Charles Darwin. sessed about profit margins and, more importantly, the excessive overhead and cost in the delivery of an entirely any believe a tectonic shift information-based service,” Harris is rocking the foundation recalls. “It didn’t seem the practice Mof the legal profession and of law should require the 25-floor those firms that don’t respond to it vistas and the mahogany paneling will become extinct species. Don’t be- and the fine art on the walls and the lieve that? Consider Heller Ehrman law library that nobody went to.” or Wolf Block or Thacher Proffitt & The result of that thinking? In 2000 “Tomorrow: A Sneak Preview— Wood, or any of the other previously Harris and an entrepreneur friend, For These Firms the Future Is Now” “strong” firms that collapsed in on Alec Guettel, co-founded Axiom by Steven Taylor, published in themselves in the past two years. Law—a very different with Law Practice, January/February 2010, Some just don’t see the prover- a very different business model. It’s Volume 36, No. 1. © 2010 by the American Bar Association. bial handwriting on the wall. Others based on this concept: Most commer- Reprinted with permission. do. Mark Harris is one of them. cial law firms are designed to support

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which allows for the flexibility that some lawyers love about the firm. “When they’re not on an engage- ment, we say they’re ‘on the beach,’ and they don’t get paid,” Harris says, adding that their salary resumes when they start working again and their benefits are never interrupted. Now to some this may sound like a temporary arrangement. But when asked if he dislikes the term “temp,” Harris quickly responds. “Temp is a four-letter word for us,” he says. “Our lawyers are not temporary. And, we serve over half of the companies in the Fortune 100 in the markets we’re established in. The work we do for them is never work they entrust to a Chris Millerchip and Jeroen Plink of Practical Law Company in PLC’s office. temp firm. It’s sophisticated work.” Given that it has brick-and-mortar offices, Axiom can’t exactly be cat- the most exceptional of legal matters, Management has replicated significantly egorized as a “virtual” firm either, the top 10 to 20 percent of complex smaller versions of this setup in San although Harris hears that term a work. Axiom is designed to service Francisco, , Chicago, Los Ange- lot as well. “Axiom is engaged in the other 80 percent of that work. les, Boston and Washington, D.C., too. category creation,” he says. “We’re “We do a lot of things a conventional In New York, the firm has 20 desks trying to invent a whole new cat- law firm does but we’ve stripped out that its lawyers can use when they need egory of law firm. When you’re do- two-thirds of the cost structure of a to meet as a team. “Meeting once a ing that there is no vocabulary.” one-size-fits-all approach,” says Har- week, we can have 100 lawyers across But there are cost savings to clients, ris, who serves as Axiom’s CEO, adding those 20 desks,” Harris says, “200 if they as Axiom can provide its services at that his firm has dismantled two main meet once every two weeks. This is an sometimes half the rate of most other proponents of the traditional firm: “The interesting way to think about the fu- firms. “Our cost advantage comes physical overhead and the pyramid, se- ture. This is where we think it’s going.” from getting rid of 90 percent of the verely leveraged economic structure.” Axiom doesn’t hire new law school physical overhead,” Harris points out The stripped-out overhead comes graduates or train junior lawyers either. proudly, “and getting rid of the pyra- from the fact that, in the main, Axiom’s The minimum years of experience its mid, which typically supports the 100 lawyers don’t have traditional offices. Its hires must have is four, but most have lawyers at the top all making a couple 280 attorneys nearly all work on-site with between eight and eighteen years. More- million dollars a year. Our clients are clients or from home offices, or when over, most are refugees from happy and our lawyers are happy.” some are serving as part of a larger team some of the nation’s top firms who were on a matter, they work from hoteling ar- weary of the work-till-you- At the Intersection of rangements at Axiom’s New York head- drop demands. Partnership and Publisher quarters space. The firm has two floors of The lawyers are paid a salary with The attorneys employed by Practical a 150 year-old, no-frills warehouse build- benefits, enabling them to know what Law Company (PLC) strolled out the ing in SoHo, where a relatively small staff they’ll make annually if they’re fully front door of some very prestigious of 55 performs marketing, client service, engaged during the year. But they don’t firms to join this unique company.

accounting, finance and other functions. have to be if they don’t choose to be, From Skadden Arps, Clifford Chance, NY New York, Law Company, Practical PHOTO:

WWW.LAWPRACTICE.ORG January/February 2010 Law Practice 40 Sullivan & Cromwell, King & Spalding, that told us how these deals work, how teach how a transaction is typically Goodwin Proctor and beyond, the list they’re structured, why they happen, structured. Recently, I met with the of alumni firms is impressive. It’s this what the legal mechanics were, what senior partners at a top-five U.S. law sort of pedigree that lays at the founda- the tax reasoning behind it was?’” firm and they said, ‘We tend to forget, tion of what’s one of the most inventive So they decided to set up their own as senior partners, what it’s like to be legal-field operations in the nation. company and publish the needed that deer-in-the-headlights associate While “legal-field operation” is one information themselves via PLC who really doesn’t know anything.’” way to define PLC, here’s another way Magazine, which quickly became So for young lawyers doing M&A to describe the company, which sells the publication of choice for Great work, for example, access to PLC’s training products to help corporate Britain’s M&A and other finance at- practice notes on how to perform attorneys navigate the highways and torneys. “It was like a cookery book due diligence can help get them up to byways of transactional law: “We’re for lawyers,” Millerchip says. “The key speed. In a way, this service supple- a sort of hybrid between a law firm thing about the market we created was ments, or even replaces, a training and a legal publisher; it’s a unique that it was popular both with in-house session between partner and associate. model,” says Chris Millerchip who, counsel and in private practice.” “The reality is most partners don’t have with Robert Dow, left London’s Slaugh- Then, as the Internet took off the time for this sort of training, and ter & May to co-found PLC in Great in the ensuing years, PLC fully em- some partners aren’t very good at it,” Britain in 1990. The outfit opened a braced it. It now provides a range of Millerchip says. “Some people say it’s New York office in December 2008. subscription-based online resources like having a virtual working What initially set them off on such a to build lawyers’ know-how in topics with a junior attorney, teaching an asso- venture? “Robert and I would sit around that fall under the two core categories ciate how to draft a document, how to a table as a deal was being done, and of Corporate & Securities and Finance. negotiate, helping through the transac- we realized that we weren’t the only The majority of the nearly 200 lawyers tion step by step.” ones who didn’t exactly know what the company employs (most of whom Midlevel and senior attorneys find was going on,” says Millerchip, PLC’s are in London) write content for the benefits in PLC subscriptions as well. chairman. “We thought, ‘Wouldn’t it associated Web pages. Both in-house Many, for instance, are interested in be great if we could read a magazine counsel and private practitioners sub- PLC’s standard forms, its up-to-date scribe to these online model agreements with drafting tips. training resources on Also, one of the more popular products a fixed-fee basis, at a in the is a database called price dependent on the What’s Market. “It allows you to find number of people who out in under five minutes what other will use the products. leading firms are doing, for example, “The foremost ben- in breakup fees, in M&A transactions,” efit of our service is Plink says. that we allow lawyers Looking forward, the company has to practice more ef- started to expand its product line into ficiently, and we do other practice areas, and before too that by making avail- long will provide products in such fields able a number of re- as litigation and real estate, employ- sources,” says Jeroen ment, environmental and antitrust law. Plink, formerly of For Millerchip, Plink and their Clifford Chance, who teams here and in , it’s all about is CEO for PLC’s U.S. improving efficiency for busy lawyers operations. “On the and their firms. “Now some attorneys more junior level, we may think, ‘If it’s making me more effi- John Crockett III, Chairman of Frost Brown Todd, in Louisville.

PHOTO: David R. Lutman, Louisville, KY Louisville, David R. Lutman, PHOTO: offer practice notes that cient, I’m charging fewer hours, and so

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this is making me less money,’” Miller- chip notes. “But what we sell is actu- We wanted to relieve that pressure.” first-years to work inside legal depart- ally an efficiency tool that can increase Of course, there has also been a lot of ments and alongside in-house counsel. their profitability. That’s the prevailing stress placed on partnerships, as start- That is, on some days, the associates argument, particularly with alternative ing salaries were reaching stratospheric report directly to the corporate clients. fees becoming more popular.” levels and climbing ever higher—at “This gives our young attorneys the least until the recession hit. So, re- ability to see up close how our clients Apprenticeships: Seeing Less Pay sponding with its new program, Frost operate, to learn our clients’ business But More Training as the Norm Brown reduced first-year salaries to in ways that we haven’t been able to of- Legal profession observers often say $80,000 in all of its offices. Previously, fer in the past,” according to Crockett. it’s the smaller and more nimble the going rate had varied depending Some critics say that apprenticeship firms that break new ground with on the market, with $98,000 in Lou- programs like those at Frost Brown innovative policies and programs. isville and $107,000 in Columbus. and other firms are merely a means to While there’s truth in that notion, big Importantly, program participants slash starting salaries, save money and, firms can and do blaze trails, too. receive something in exchange: The consequently, boost profit-per-partner Take, for example, a new associ- firm dropped its first-year­associates’ levels. Crockett, however, dismisses ates program at Louisville-based Frost billable-hours requirement from 1,800 that and points out that incoming as- Brown Todd, with 475 lawyers in offices to 1,000 hours; plus, it increased hands- sociates were very happy when the throughout the Kentucky, Indiana and on training efforts with the goal that firm announced this move last year. southeastern Ohio region. The part- young lawyers will receive an additional “When we first trotted out the ners there have launched a revamped 1,000 hours of on-the-job education. program, I was encouraged to see let- first-year associate training-and- In the associates’ second year, they’ll ters from incoming lawyers express- compensation system, which is best jump into the system at 1,800 bill- ing their gratitude,” he says. “They described as an apprentice program— able hours and an increase in pay. were appreciative that we were doing an innovative model that a couple of In a sense, the new program fills in this rather than deferring their start other firms have embarked on as well. for something Crockett believes is miss- dates to a date to be named later. They (Find more about those other firms in ing in today’s big law firm culture. “Like came into it excited and energized.” the Managing column on page 60.) other firms, we’d gotten away from hav- What’s more, Crockett likes the ca- According to Frost Brown chairman ing guest-chair opportunities,” he says. reer development of the apprentices John Crockett III, the old model had “I’m a litigator and the ability I had as a thus far, although the firm will conduct to go for a twofold reason: because the young attorney to go alongside a partner a thorough assessment of the program billing demands on first-years at law and watch him or her take a deposition after its initial year is completed. He also firms all over the country have been as a spectator was a valuable experience expects the program will become a part getting higher and higher, and clients for me.” So the firm has divided up the of normal operations at Frost Brown— have become more and more dissat- 1,000-hour educational program into and will likely catch on with other firms. isfied with inexperienced associates these “guest chair opportunities” as well “I don’t think we’ll see a return to working on their matters. “We listened as more formalized in-house training at business as usual after we emerge [from to clients,” he says. “We want to develop the practice group level—and it has ap- the recession],” he says. “I think this better lawyers faster than we and others prentices serve on client-service teams. model very well may be the future.” LP have been able to do in the past. There’s Perhaps the most exciting compo- Steven T. Taylor (stevetaylor77@comcast .net) is an gotten to be such pressure on associates nent for apprentices is Frost Brown’s award-winning freelance journalist living in Portland, and partners with the billable hour. arrangements with clients allowing the OR, who writes on various subjects in the legal media.

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