October 23, 2012

Law Firm Mavericks Go For Broke: Traditional Thinkers Need Not Apply

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How Do You Get Inspired?




By Merrilyn Astin Tarlton

In most law firms, the path to innovation is beset with booby traps and dead ends, and any improvements seem to move a centimeter at a time. Impatient with the usual pace of change? Then consider a more radical approach. It's called business innovation. To inspire your thinking, here's a spotlight on four firms with wildly creative ideas about what succeeding in the business of law means.

You don't have to look far to see where creativity is needed in a law firm. And coming up with the necessary big idea is really the easy part. The hard part is what it takes to get from here to there, and how incredibly fraught with booby traps, dead ends and brutal criticism any "next new thing" can be. The people and firms that do succeed in doing things differently—the ones who do change things up and make things better for their clients—deserve some sort of medal for what they go through. In most law firms, improvement is made in mere centimeters, if at all. Of course, making any progress is worth it, even when the going is torturous. There is, though, another, more radical approach to improving things. A path rarely taken in law practice. Frankly, this route's not about just improving. It's about reinventing. It's called business innovation.

Alan Robinson and Dean Schroeder describe innovation as the "engine of progress" in their book Ideas Are Free (Berrett-Koehler, 2006). Gary Hamel and Gary Getz, authors of Funding Growth in an Age of Austerity (Harvard Business, 2006), go even further: "Innovation is the fuel for growth. When a company runs out of innovation, it runs out of growth." Essentially, in the corporate world, if you aren't innovating, you're standing still (if you're lucky).

It would be nice—and very comfortable—to believe that the legal profession is immune to the need to fuel growth. To believe that this honorable and centuries-old profession transcends the need to innovate. Not true, though. Moreover, venerable is not the antonym of creative, and noble is not the opposite of ingenious. The practice of law is actually some mystical combination of art and business. And there are a small number of wildly creative lawyers and law firms smartly demonstrating their impatience with the usual method of gradually improving things. They enjoy upending the whole great apple cart. Who are these people and what is there to learn from them? Let's take a quick look at a few.


No Guts, No Glory

Hardcore Superstar Legal Management Corporation touts itself as a "new paradigm in effortless corporate services." Co-founder Joseph Briante practiced intellectual property and technology law with silk-stocking Vancouver firm Fasken Martineau DuMoulin before what he describes as his "fortuitous departure."

His co-conspirator in Hardcore Superstar is Theresa Holiday James, who also practiced at Fasken, as well as at McCarthy Tetrault. As you might guess by their firm's name, these two have put together a way-out-of-the-box enterprise. But to really get the picture, check out their flamboyant photos and the description of their services on their Web site. (Trust me, you have to see it to believe it!)

Briante and James set up shop in the tony WeVa suburb of Vancouver, British Columbia, just this past summer and have thus far attracted a handful of exceptional-quality clients in finance, software and technology. Hardcore Superstar, say these two, is the antidote to "the ant colony model of legal services offered by big-box law firms."

The firm delivers some very interesting creative and corporate services, including two unique service-product lines branded Legal Valet and Legal Services Audit. Through the latter service—which offers clients a comprehensive audit of their outside counsel's work—Hardcore Superstar promises that it will "carefully examine bills and work product of your legal team; prepare a report card for your legal team based on our findings; and provide recommendations, instructions and tips on effective use of counsel to keep down your legal bills."

And Legal Valet clicks things up a notch by offering to handle clients' day-to-day legal affairs and discrete projects for them. It encompasses a range of services primarily focused on assisting high-net-worth individuals or organizations in better managing their lawyers and legal dollars. Suffice it to say that Legal Valet's lead line is, "You don't carry your own bags, so why do you still deal with your lawyers?"

"We expect ‘A-list' clientele: intelligent, savvy, motivated, wealthy clients with interesting projects and an eye to succeed," says Briante. Here's the guarantee: "We're definitely more fun than dealing with your current counsel."

How could something like this ever work, you ask? Well, that's an important question. But that's the thing about innovation: It's never a sure thing.


Stopping the Clock

Next, check out Exemplar Law Partners. Based in Boston, this 10-lawyer firm is turning precedent on its head by charging for services only—yes, only—on a flat-fee basis. Tired of decades of pointless talk about getting "beyond the billable hour," this firm is determined to walk the talk.

The maverick behind the firm is 29-year-old Christopher Marsten. He founded Exemplar in January 2006, straight out of law school, with an unconventional business plan for a new kind of law firm. Armed with his newly minted law degree and a master's (as well as a bachelor's) in finance, Marsten used every penny of his personal savings to launch Exemplar—which, in addition to only fixed-price billing, counts among its innovations guaranteed satisfaction for clients and mandatory business degrees for all partners.

As management consultant David Maister says, "What's remarkable about Marsten's initiative (and it is remarkable) is not his creativity, but his courage."

Of course, it remains to be seen whether the Exemplar venture will be a financial success. This enterprise is about as far from a "get-rich-quick scheme" as one can get. If it does work, though (most likely following a long period of investment), one can assume the success will be for the long haul—especially when we consider the firm's tagline: "Lawyers who ‘get it'!" Presumably they do … and they will.

Taking a different tack to clock-stopping services is another Massachusetts firm, Convergent GC, which is based in Beverly. Operating from the premise that while most entrepreneurs really need in-house counsel, few can afford it, founders Audrey Roth and Jeffrey Fink became entrepreneurs themselves and launched a new sort of "outside general counsel" firm.

Roth and Fink bring years of experience working with entrepreneurs, company executives and venture capitalists to grow small companies into large successful ones. Also working with them is Ralph Dunham, who acts as of counsel to bring established business management concerns to the table. He's a CPA with a JD and an MBA and an experienced and feted senior executive.

The promise of this small but cheeky enterprise is to work with young entrepreneurs as if a member of the corporate team. And like Exemplar, this firm eschews the billable hour, too. Need a part-time general counsel? Then they charge you for one part-time general counsel and delight in saying they've "thrown away the meter."

And these folks do know their way around the old meter. Between them, over the years, the members have practiced with Proskauer Rose, Sullivan & Worcester, Goodwin Procter and Kelley Drye & Warren. Although clearly, as it says on the firm's Web site, "Convergent GC is anything but a traditional law firm. We work differently, think differently and bill differently." Yes, indeed, they do.


All for One and One for All

It's a rare law firm that doesn't aspire to the Three Musketeers School of partner compensation: "All for one and one for all!" But what is generally meant by "all" is … well, let's face it, not really "all" but just "all partners." That's not the case, however, at the Seattle firm Summit Law Group. Right from the get-go, it's easy to see that this is a maverick law firm. Check the telltale signs:

  • The name. When its doors opened in 1997, the firm immediately received a letter from the Washington State Bar threatening to file grievance. "Law firms must be named after people," the bar intoned. In the end, the firm kept its name and the Washington Supreme Court changed the ethics rule.

  • The hierarchy. There isn't one. They've ditched the partner-associate thing in favor of making all the lawyers equity partners. And everyone, lawyers and staff alike, has the same size office. Plus, every single employee is profiled and pictured on the firm's Web site—even the receptionist. Compensation and finance numbers are common knowledge, known to all and discussed at weekly meetings.

  • The bill. If you're a client receiving a Summit bill, the firm actually provides you with the option to reduce the amount due, through its "value adjustment line," which the firm calls a cornerstone of its billing approach.

The firm was founded by refugees from two of the most prestigious northwestern law firms—Heller Ehrman and Davis Wright Tremaine—who cherry-picked some of the best and brightest young lawyers from those firms, then hit the ground running. If it sounds like this crew of dreamers has overdosed on EST and Yanni, you may want to contemplate that in its first full fiscal year, the firm brought in revenue of $6.5 million, slightly ahead of its target of $6.2 million. So maybe it's not so crazy after all.


Who Will Break Out from the Pack Next?

It's starting to look to me as if the future of law practice will indeed be fueled by ingenuity. Not all of it, of course. There will always be the big, fat and happy firms that more closely adhere to the models of yore. And, thank goodness, there will always be the conventional but darn good small firms meeting the legal needs (and more!) of clients across the country.

But for the few who want to play in the "Extreme Law Firm" games in the company of other entrepreneurs, the only limits are imagination and a high tolerance for risk taking. And the range of possible outcomes is plentiful, including greater autonomy, financial success, improved quality of life, pride of creation, happy clients and that great feeling that comes when you do what your heart tells you to do!