A few days ago I had a chance to catch up with my friend Alex Hamilton, now at radiant.law. (I knew Alex in his previous position as a Latham partner and wrote about his efforts behind Latham’s online “Capture” tool for clients.) I wanted to get Alex’s thinking behind the radiantLaw launch and understand their business model better. He was kind enough to include his partner, David Skinner, on our call.
radiant launched at the very start of this year, with Alex from Latham, David from MoFo, Andrew Giverin from BLG and, counterintuitively enough, Mark Millward from Deutsche Bank.
So what’s it all about? Here are some representative statements from the firm’s site:
- At radiant.law we are built around delivering price certainty for the client. We believe legal services are best scoped, performed and priced as a project with clear deliverables and not in terms of the time a lawyer spends completing a task. Rather than charging by the hour we provide fixed prices in advance.
- Our clients wanted better value legal services so we created a business model and processes to provide exactly that. A flat structure means our senior lawyers will provide you with innovative and market leading services so that you can benefit from our deep experience and international expertise. Every project we support follows the same rigorous process to ensure that you unlock more value.
- radiant.law has been structured in a way which allows for greater flexibility in the legal service delivery model. We believe we can build on the conventional objective of the law firm becoming an extension of the in-house project and legal team.
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radiant.law started with a conviction, shared by a group of us, that there must be better ways to serve clients.
This group (like a number of other lawyers) spends a lot of time thinking about how to do things faster and better to deliver better value to clients. But what became clear to us was that our ability to implement real change was being blocked by structural barriers endemic in the traditional law firm model.
The most obvious barrier is the built-in incentive towards inefficiency that haunts every private practice lawyer who is rewarded on increasing billable hours ahead of removing the need to do future work.
And what sort of reception have they been getting in their brief time in the market?
radiant.law has received reactions from three sort of constituencies: First is the standard line that fixed fees have been around forever and they always somehow seem to just add up to rates times fees plus 10%. This comment from The Lawyer is probably typical:
“Since when is fixed fee a new concept?” asks one reader on TheLawyer.com. Another posts: “There’s nothing innovative about this firm.”
Second are the “usual suspect” thought leaders such as Richard Susskind who obviously welcome such initiatives (“an important development; the future is creeping up on us”).
But of course to an economist the most important constituency is clients, where just one month in, and recognizing it’s early days, Alex and David report that they’ve had great reception.
The motivation for radiantLaw, I ask? It wasn’t just that they were motivated to set up their own firm, which legions of lawyers have done, but a firm belief that the model of the past 20 years has not been good for clients. Particularly in the wake of the credit crunch, law firms have closed ranks and raised rates, given no transparency on their inner workings, and frustrated clients.
The premise for radiantLaw was therefore what would we want if we were the client?
They hasten to add that they aren’t arrogant enough to say they’ve broken the market mold: They can’t really do that. Rather, they tried to go back to first principles: No timesheets, no billable hours. What clients are buying is a service, an output, and the last thing clients are interested in is lawyers “whinging” to them about how it took longer than they thought, was more difficult and complex than we anticipated, and accordingly required twice the hours estimated at the start.
But was there a more specific motivation?
In 2009, Alex reports, he wrote a 17-page internal memo suggesting a varietiy of new and innovative ways of doing things only to ultimately realize it wasn’t going to go anywhere: “After all, law firms are still doing fine by and large. Clients may grumble but they pay the bills and lawyers make plenty of money.”
So now that they’re at radiant, are they really doing new and different things?
I am gently admonished that this is not quite the point: People have been doing fixed fee engagements for a long time, but the goal is to really deliver a different type of client service. Both Alex and David learned that in the context of a big firm, efforts at abandoning the billable hour really don’t work because associates (for example) were being measured by their number of hours–it goes to compensation, evaluations, and so many other things that every time they really tried to do it it became a “train wreck.”
Alex believes it’s perhaps even worse in US firms than UK as American firms are entirely focused on capturing billable hours whereas UK firms may have less sophisticated or mature systems which are easier to work through or around.
Fascinatingly, project billing can decrease revenue in the future, David volunteers. For example? Say, automatic document generation, using systems which are fairly sophisticated these days.
You invest a fair amount upfront to install the system, train people on it, and then down the road your reward is fewer billable hours. But note the important premise of installing the document generation system: You generate more consistent documents, give yourself more time to think about what really matters rather than reinventing the wheel and spending all your time on cutting and pasting.
Most importantly, it delivers higher quality. We have learned this from the medical profession: Consider a heart surgeon who approaches an operation which has no written documentation and is therefore on his own when the patient is cut open. This was standard operating procedure (no pun) for many many years . Finally, the medical profession began to realize about 20 years ago that systematizing things could raise quality and permit surgeons to deploy their skills in innovations and improvements. But the undocumented, spur-of-the-moment, off-the-cuff every time way that surgeons used to work is the way lawyers work today.
They remind me of Jeff Carr’s four buckets: Advocacy, counseling, process, and content. Advocacy/negotiation and counseling are the high value work. This is what lawyers should be doing: Here’s how I would approch this, this is the way I’d tackle that tricky issue. But there’s also a lot of work that goes on behind the scenes in what to clients can look like a scary black hole where you’re not sure what the lawyer is doing and what precisely it is that he’s generating: This is where you need rigor, consistency, and discipline. These are Jeff’s other two buckets of process and content, where consistency is your friend and the incentive structure facing associates who are thoroughly motivated by billable hours, which drives them to be slower rather than faster, is a consummate disservice to the client.
Process is your friend here: And radiantLaw is using Pangea3 and their Six Sigma processes to do things such as conformance on a contract, where sending it to India makes great sense. (They’ve visited Pangea3’s site in India and were strongly impressed by the intelligence and sophistication with which they approach these processes.) These are just things that need to be done right and done well, but not in the “quill-wielding sausage factory” way it has been done.
Why Pangea3, I ask? After all, outsourcers are these days a dime a dozen. Their response: Because it was set up by lawyers for lawyers as opposed to setting up legal processes as a “bolt-on” to an existing process outsourcing provider: These people “have it in their DNA.”
How did radiantLaw come together?
Alex and David (and Andrew Giverin) had all worked together at Shaw Pittman about a decade ago, and over lunch last summer decided to just go ahead and try it. Also critical was Mark Millward, a senior legal counsel at Deutsche Bank (and an alum of both Allen & Overy and Herbert Smith), who provides real insight into the frustrations of client’s buying legal services.
This prompts a question: How are they going to scale up? There’s a grand total of five of them at the moment. “Well, we’re not eager to end up managing hundreds of people so we’re building a network.”
As they envision it, there’s a network with three prongs: There are”best friends” firms who can provide specific expertise; Pangea3; and experienced lawyers out of BigLaw who for whatever reason realized they did not care for that lifestyle, who Alex and David find an “extraordinarily under-tapped” resource. (Sometimes they turn up at Axiom, but often they don’t.)
Another key component is technology: Systems that will significantly improve clients’ ability to manage their deals What exactly? “A combination of project management and knowledge management tools.” radiant is actually building a bespoke system that handles transactions in a coherent fashion, transparently to lawyer and client alike, and which continues to operate after the transaction is done.
“Haven’t people tried to build such things before?” Answer: “Well, admittedly, there is no one single masterstroke that will take clients and firms to the Promised Land of seamless service delivery–no silver bullet–but they are drawing from practices and concepts as diverse as project management, Six Sigma, and continuous improvement. We view it all as carrying through on the ‘big theme’ of putting the client in control.”
Finally, I have to ask: “radiant.law? Where did that come from?”
They started from the premise that they wouldn’t use any people’s names and David just came up with it.
So, in the Department of Fearless Predictions, how do I think this is all going to work out?
Knowing me, Dear Reader, you should not expect and are entitled to more than a banal “we’ll just have to wait and see, shan’t we?”
So let me couple some fascinating and deeply unconventional language from their site with the concept of kaizen, or continuous improvement, made famous by Toyota.
From their site (emphasis mine):
So often there is a “them and us” / “client and law firm” attitude which is driven by a tension between the way traditional law firms operate and the way the client prefers to address legal support. This can create an unnatural barrier between legal service provider and service recipient. radiant.law is able to address clients’ service delivery requirements in a more immediate way and in a way which seeks to eradicate the boundary. radiant.law is able (and willing) to work with our network of lawyers, LPOs, traditional law firms, consultancies etc. to form a team which the client actually wants (and possibly needs) to work with.
Increasingly, a client’s support requirements are influenced by its own legal support structure which may comprise multiple onshore centres, offshore “captive” supports and third parties. radiant.law is sympathetic to clients’ new legal support models (usually adopted to increase efficiency and drive cost savings) and radiant.law is well placed to apply flexibility to its own delivery model in an endeavour to meet client requirements and to seek to integrate more effectively with the client’s own operation. radiant.law is a platform for innovation.
From launch radiant.law does not profess to have all the answers but its people are open-minded and able to embrace and implement change quickly.
And what, pray tell, has kaizen got to do with it?
Simply this: The end is never plainly in sight; it’s an ever-shifting goal, with the standards for what constitutes superb automotive quality–or superb service to clients–constantly receding as you enhance and build upon your capabilities, make your processes more rigorous and efficient, and develop more innovative approaches to the thorny problems that remain. And when you’re done with that, you have a new crop of thorny problems. The journey is the goal.
Decades and decades before Lexus began capturing top ten spots in customer satisfaction and quality surveys, recall, it was the “Toyoda Automatic Loom Company.”
Persistence, intelligence, application, open-mindedness, and humility. Continuous improvement in the service of clients.
Not advisable betting against this combination.
Alex
David
