27 July 2010 [UK] No Win No Fee No Like

26 July 2010:  The Solicitors Journal reports: “The UK government is to consult on a review of the ‘no win, no fee’ regime”.

The Law Gazette: “In a written ministerial statement laid before parliament this morning, justice minister Jonathan Djanogly said that the reform of conditional fee agreements (CFAs) ‘should lead to significant costs savings, while still enabling those who need access to justice to obtain it’. He said that Jackson’s recommendations, published on 14 January, will be taken forward by the government ‘as a matter of priority’.”

In Australia, The Sydney Morning Herald has reported (16 July 2010) “Lawyers acting on a 'no win, no charge' basis are compromised in their ability to provide the best objective advice to their clients, a senior NSW judge has warned.”

18 July 2010 [UK] Solicitors Preparing for Massive Cutbacks in Legal Aid Funding

The new Government in the UK is faced with unprecedented government debt and budget deficits. It is looking for cutbacks across all services including Legal Aid.

Two recent reports from the UK Law Society Gazette

Legal aid budget to be slashed by half a billion

The mood has never been lower in legal aid

18 July 2010 [Canada] Social Media and Social Networking  Policies and Procedures For Law Firm Staff

The Law Society of British Columbia has made freely available a template which law firms can customise to create a social media policy. It deals with issues such as: should a law firm's staff be allowed to use Facebook, Twitter or Linkedin? Should they have individual accounts or firm accounts and when they use these services are they representing the firm or themselves?

Link to the Social Media and Social Networking Policy Template

3 July 2010 - UK Law Firm of the Year

UK’s The Lawyer magazine has chosen Berwin Leighton Paisner (BLP) as the 2010 Law Firm of the Year.

In 2009/10 the firm reported annual revenue of £191m. In 2009 it was the 20th largest UK firm by revenue and at that time had more than 1,200 employees.

Contributing to the win are two services offered by the firm  which are considered to be innovative for a firm of this size. The firm has branded these services Lawyers on Demand and Managed Legal Service.

BLP describes Lawyers on Demand (LoD) as “an alternative resourcing option for in-house legal teams”.

“BLP brings specific experts or teams of experts to work on specific legal transactions, deals or assignments for our clients. We also seek to help clients where possible to bridge resourcing gaps through the use of secondments - nearly one in five of our Associates have been seconded to clients.”

“LoD provides your business with a premium legal resource at a low cost base. The service comprises a flexible pool of high-quality, freelance lawyers who are trained, vetted and supported by BLP and who work directly for clients. It provides benefits both for the client and the lawyers themselves”.

BLP’s Managed Legal Service division can take over the entire legal department of major clients. The firm states that it “is a ground-breaking new approach that addresses the combined pressures on clients of budget constraints and increased regulation, delivered in conjunction with BLP’s core business of providing high-end legal services.”

“The service is tailored to suit client needs, providing the following key benefits:
• Guaranteed performance standards
• BLP quality mark
• Substantial cost savings
• Budget certainty
• Frees up General Counsel to advise the Board
• Enhanced on-site support
• A legal team incentivised to minimise legal risk"

"Focused on large corporations with significant legal spend, BLP through its new division will take over responsibility for managing a client’s legal needs, including the design and performance of the on-site team.”

Link to The Lawyer article on the award
Link to the Berwin Leighton Paisner website

18 May 2010 [UK] - The Legal Industry’s Largest Outsourcing Agreement Ever (plus terminology confusion clarified)

Outsource provider Integreon announced a £583 million 10-year agreement with CMS Cameron McKenna LLP, UK member firm of CMS. The official Integreon  press release (14 May 2010) stated that the agreement  was for "outsourced Middle Office services. This includes substantial portions of accounting and finance, human resources and training, marketing and communications, learning and development, library and information services, research, information technology, facilities and other services."

The term "Middle Office" has not been as widely used in the legal industry as the term "Back Office".  Creating confusion about the deal was the fact that the official press release referred to "Middle Office services" and did not use the term "Back Office services".

Document review, litigation support and word processing have been referred to as "Middle Office" rather than "Back Office" functions.     

Integreon’s chief marketing officer, Colin Gounden clarifies:

“We have chosen the term “Middle Office” as it refers to the broadest possible categories of services. Functions covered by our agreement such as learning, communication, and research are not normally considered back office. Our agreement also covers functions such as IT and finance. We have chosen to use the term Middle Office. Others have chosen to use the term Back Office. We can’t comment on the reporting by other media reports to use that term.”

3 May 2010 [UK] - Price Check at Tesco: A Conveyance is Half the Price of a Property Sale Commission
 
UK solicitors may have been concerned about the prospect of Tesco and other large corporations entering the legal services market but it now appears that real estate agents may be in for an even bigger hit. Tesco has become a seller of homes under the business name isold.com. It will sell a home for a flat fee of £999 no matter whether the property sells for £200,000 or £400,000. The low sales commission is partly made possible by the seller being actively involved in showing the property to buyers.
 
You may have heard about the opening up of the legal services market in the UK. A term coined for these reforms is "Tesco Law", named after the giant retailing company's long expected move to offer legal services. Tesco operates in many countries with staff numbers of more than 460,000 and sales revenue of more than £60 billion. Through isold.com it is now involved in legal services and real estate sales.
 
The isold.com web site provides a table showing how many thousands of pounds a seller will save by using its service in place of a traditional real estate agent.  Ironically, Tesco's joint venture partner in isold.com is the company Spicerhaart, which itself owns a major traditional real estate agency business.
 
The cost of the isold.com conveyancing service is additional to the selling fee and the indicative price advertised is £499.
 
This is interesting for three reasons: First, the conveyance is not discounted anywhere near as savagely as the real estate agency commission. Second, it appears that the marketing strategy is to lure the seller with the saving on the sales commission while conveyancing is effectively offered as an additional service. Third, the relative pricing of a conveyance compared to a sales commission might contribute to a change in the market's perception about the relative value of the two services.
 
The isold.com pricing message is that the conveyancing service is worth half of the value provided by the selling service. At present, the price paid for the services of a traditional real estate agent is usually many times more than that for a solicitor/conveyancer, which contributes to the perception that the role of an agent is many times more valuable. Tecso, through isold.com, might alter that perception. 
 
Link to Tesco's isold.com 

18 April 2010 [USA] Rare Public Information about Law Firm Debt According to a Bloomberg report, top tier US law firm “Dewey & LeBoeuf LLP raised US$125 million in a bond offering to refinance existing bank debt”. The report states that the firm did not disclose the amount that it borrowed. This was provided by “two people familiar with the transaction”. The 1,200 lawyer firm is quoted in the report as having annual revenue in 2009 of US$914m.

Relying on these figures and assuming no other debt (such as leases etc), it is interesting to note that debt as a percentage of revenue is 13.68%. If the firm is able to increase its revenue to US$1b then this percentage drops to 12.50% but if revenue falls to US$828m then debt to revenue becomes 15.10% (all other things being equal).

21 March 2010 [USA] How Much is it Worth to Big Business to Find Clients for Law Firms? The answer is US$23m. That is how much has been reportedly invested into web site service www.avvo.com.  Avvo has only been in existence since 2007 and it has now announced that venture capitalists have invested more funds, bringing the total up to US$23m. This could be a sign that finding clients for law firms is a lucrative activity. Avvo offers ratings and profiles for lawyers, as well as client reviews, peer reviews and disciplinary records. It also offers a legal question and answer forum. Press Release 

4 March 2010 USA: mylawyer.com Launches as a Lead Generator for Law Firm Subscribers: www.mylawyer.com is a business interest of Richard Granat, who is widely acknowledged as a visionary in the field of online legal services. The new web site is a "feeder" of work to law firms who subscribe to www.DirectLaw.com, which provides law firms with the technology to deliver online legal services. Mr Granat announced the launch of mylawyer.com at the Sinch Online Legal Services Conference today, stating that the site had gone live only one hour before commencing his presentation at the conference.

8 February 2010: Allen & Overy Takes a Chunk Out of Clayton Utz for Australian Launch:  14 partners from Clayton Utz plus 3 new partners from elsewhere will form the new Allen & Overy offices in Sydney and Perth. Allen & Overy is one of the UK's largest law firms. This continues a trend of multinational law firms expanding in Australia. Last year US headquartered firm Jones Day expanded its Australian presence and Deacons became part of Norton Rose Group. Bloomberg Report

11 January 2010: UK divorcesupermarket.com  Promoting "the new way to break-up, without breaking the bank": The recently launched web site enables users to click through and purchase services with names such as "DIY Divorce", "Managed Divorce" and "Solicitor Managed". A range of forms and kits are sold which originate from a number of sources. One of the key suppliers is divorce-online.co.uk - one of the longer established web-based family law service providers. links: www.divorcesupermarket.com and www.divorce-online.co.uk

27 Dec 2009 - 10 Jan 2010: First Asian Law Firm to Set Up in Australia: Malaysian headquartered firm Zaid Ibrahim & Co (ZICO) plans to establish offices in Sydney and Melbourne. It is the largest law firm in Malaysia with more than 130 lawyers and offices around Asia and the Middle East.  

28 November 2009: UK Barristers will be free to set up in partnership with solicitors or with each other:  The Bar Standards Board made this historic decision on 19 November 2009. Read the Times Online Coverage

18 November 2009: Latitude South First to Offer New Zealand-Based Legal Services Outsourcing to UK: The company announced that the service is "... designed for UK in-house legal teams and law firms to reduce the costs of substantive legal work by utilizing a team of New Zealand-based former lawyers with UK and international experience. Latitude South will enable savings of up to 50% on substantive legal support services..." Link to Latitude South web site 

12 November 2009: www.lawyers.com web site promoted through TV advertising across North America: "The most powerful marketing services network for lawyers" is the description of lawyers.com given by the CEO of Martindale-Hubbell, its owner. Legal Practice Bulletin believes that this is a further sign of the growing importance of Internet Search for legal services marketing. View an interesting You Tube video about the making of the TV commercial - click here.

31 October 2009: A US Judge awards a US$4.5m bonus to lawyers for their good legal work but the defendant is not paying up without a fight: Read story in National Law Journal and brief summary at smh.com.au.

20 October 2009: Is this a Trend? Legal Services Buyers Clubs: At least seven Local Councils in London have banded together to increase their bargaining power over law firms. They have been aided and abetted by consulting firm Kennedy Cater Legal (which is not a law firm) whose service is to "help organisations and high net worth individuals manage their legal needs". This includes setting up law firm panels for clients. They promote the opportunity to save "as much as 50%" on clients' legal spend.  

12 October 2009: Professional Indemnity Insurance Nightmare for UK Law Firms: Huge premium increases have been reported resulting in premiums representing more than 10% of projected revenue for some small firms. The situation has been blamed on the financial collapse and hence withdrawal from the market of major insurers and an expected increase in claims due to turmoil in the property market. In short these are repercussions from the GFC. The UK operates an open market system for insurance.  

4 October 2009: The American Lawyer has released its annual list of the top 100 firms in the world by revenue and by profit per equity partner:

The top five firms by gross revenue are:
1 Linklaters US$2.407 billion
2 Freshfields Bruckhaus Deringer US$2.386 billion
3 Clifford Chance US$2.34 billion
4 Skadden, Arps, Slate, Meagher & Flom US$2.2 billion
5 Baker & McKenzie US$2.112 billion

The top five firms by profits per equity partner are:
1 Wachtell, Lipton, Rosen & Katz US$4.010 million
2 Quinn Emanuel Urquhart Oliver & Hedges US$3.335 million
3 Sullivan & Cromwell US$2.94 million
4 Slaughter & May US$2.855 million
5 Freshfields Bruckhaus Deringer US$2.675 million

22 September 2009: UK Magic Circle hourly rates drop by third as clients flex muscles: The Lawyer reports that "In the last 12 months average magic circle partner rates have dropped by a third, from £680 an hour to £450." Link to full article 

17 September 2009: Revenue Drop in Large UK firms - UK's Times reports that "Fee income at the UK’s top 10 law firms fell 7.7 per cent in the last quarter [compared to previous year for 3 months to July 30] as the larger firms bore the brunt of a wider downturn." This was despite a 5% positive contribution made by exchange rate movements indicating that the decline in real terms was closer to 13% for the top 10 firms and 9% for the top 100 firms grouping.

16 September 2009: 5 Year Strategic Plan Document of Top US Law Firm Leaked - 1,000 lawyer firm O'Melveny & Myers LLP have had their strategic plan leaked to and critiqued by legal tabloid "Above the Law". One of the plan's points of interest is the firm's intention to become a leader in providing high-end legal services on a fixed fee basis. Source

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