The Fertile Grounds for LegalTech in the UK

LegalTech RiverviewLaw

Last week the ABA Journal ran an article entitled “Does the UK know something we don’t about alternative business structures?” The article discussed, among other things, the innovations in the delivery and scalability of the business of law in the UK that have been propelled by non-lawyer ownership of law firms.

As you may know, the Legal Services Act 2007 granted non-lawyers in England and Wales the right to own and run law firms called Alternative Business Structures (ABS). This Act was put into place to increase access to justice and to drive competition among law firms (as well as drive down prices and increase efficiencies). Several hundred such firms exist today.

In our continued coverage of all things LegalTech, we hooked up with Andy Daws, VP of North America for Riverview Law, a successful ABS firm in the UK, to learn more about this growing industry, and how LegalTech is helping to drive its growth.


 

LI: What led to the creation of Riverview Law?

Riverview was born out of an existing HR advisory services outsourcing business (AdviserPlus Business Solutions). Business customers of AdviserPlus asked it to provide legal services. So, to take advantage of this opportunity, Riverview Law, a separate business, was set-up and was first to market in the commercial law arena. We had the advantage of starting with a blank slate, with no legacy people, processes or technology, and built our business from the customer out (customer-centric) rather than the lawyer down.

In order to understand Riverview, you first have to understand the context in which we were created. About a decade ago, the UK government commissioned a review of the regulatory framework for legal services, which culminated in a report peppered with words like “outdated”, “inflexible” and “restrictive practices” – all things that customers of AdviserPlus were complaining about from their legal providers.

In response, it drew up the Legal Services Act 2007 which is best known for allowing those who are not practicing lawyers to own and run a regulated law firm, called an Alternative Business Structure (ABS). It was designed to stimulate competition, innovation and the public and consumer interest, and fully came into effect at the beginning of 2012. Since then, several hundred ABS licenses have been granted.

 

LI: In your own words, what does your product do and what problem does it solve?

We provide four services to large global corporations: Legal Advisory Outsourcing (LAO), In-House Solutions, Legal Counsel (mid-market), and Litigation & Legal Projects. It’s important to clarify that although we have a US office, we’re not yet practicing US law on this side of the Pond and we have to make sure we fall on the right side of the UPL regulations.

Customers of our LAO managed service offering outsource discrete legal advisory work to us. As a result we provide large corporations with a high quality, fixed priced and proven alternative to using traditional law firms and/or growing the size of their in-house legal function. Using client-dedicated teams which combine lawyers, client managers, data analysts and other professionals, all employed by Riverview Law, we help free the internal legal team to focus on higher value added strategic and tactical requirements.

Our In-house Solutions lets GCs and Heads of Legal license the proven Riverview Law service delivery and workflow technology platform and tailor it to their organization. The In-house modules enable legal teams to evolve their operating models. It helps them do more with the same or less resource. It delivers relevant management information and data that is actionable. It is proven and low risk – Riverview Law teams use the same model and technology to deliver managed service solutions to existing customers globally.

 

LI: Has your business model changed significantly since you first started?

Yes … and no. Riverview was intentionally designed with the DNA of a professional outsourcer rather than a law firm, and that’s unlikely to change. It results in some material differences, such as fixed price versus hourly billing; team versus individual; driven by innovation and efficiency rather than threatened by it; focus on outputs and solutions rather than inputs and problems; etc.

Our DNA means we’re inherently responsive to change. When we first launched, we thought our offerings for large corporates would take some time to gain traction, so we focused initially on the mid-market. To be honest, we were somewhat caught off-guard by the huge response we received from global companies embracing our LAO services, so we had to quickly refocus resources to capitalize on that. 

The other big change over the last two years is the increased focus and investment in technology, which is a huge driver for our business. We’ve recently announced the creation of a new technology business to sit alongside the legal services business, and this week have gone public on our partnership with the University of Liverpool which is a key facet of developing our capabilities in the areas of Artificial Intelligence and Machine Learning.

 

LI: What do you feel most proud of in your work? 

From time to time we’ll have one of those “reality check” moments when we realize just how far we’ve come in a relatively short space of time. Launching a “new model” law firm into a mature, conservative and saturated market was a big step, and there were plenty of doom mongers in the traditional industry who wrote us off before we barely got started.

Three years on and we’ve managed to attract a number of landmark FTSE100 and Fortune 500 customers; revenues are doubling year on year; we’ve won several prominent awards and been dubbed “the most innovative law firm in the world”; Harvard Business School recently published a case study on us; and we’ve been invited to speak at leading Business and Law schools around the globe. Whichever way you cut it, that’s not bad for three years! 

But the proudest things, unquestionably, are the culture and the sustainability of our business model. Without the right people with the right attitude, combined with a scalable and powerful infrastructure and business model, we would not be able to deliver the quality of services that we do to large corporations. It is the quality of what we do, at pace and at scale, that has won us the blue-chip customers that we have.

 

LI: Is the legal profession as we know it dead or dying?

Perhaps that’s a bit like asking whether Latin is a dead language! Unlike many other languages, it never evolved, so it’s no longer spoken as a first language. It lives on in some very specific areas (e.g. science, philosophy) and has left an indelible print on a number of modern day languages, but it’s not the giant it once was.

In a similar fashion, I think we’re watching the humbling of the traditional legal profession as we know it, because like Latin, it has largely failed to evolve. Long protected by myth and regulation, many firms have built their model around resources, processes and priorities that are not fit for the 21st century paradigm, and as some are now finding, that’s incredibly difficult to change. It’s Clayton Christensen’s classic Innovator’s Dilemma.

I don’t think for a moment that the legal profession is dying, but the delivery mechanism for legal services is fundamentally changing, and over the course of the next decade or two we’re likely to see the unfortunate demise of many traditional law firms. We’ll also see the rise of many new players, some of whom will have their roots in entirely different industries. Nobody really knows quite how it’s going to pan out, of course, but a colleague and I had some fun speculating in this recent article.

 

LI: What does your ideal customer look like?

As you’d expect, it depends on which service line you’re talking about. Our Legal Advisory Outsourcing proposition is targeted at the 60-70% of legal work that large organizations do every day of the week, every week of the month, every month of the year that can be packaged into long-term contracts. It frees the in-house legal team to focus on higher value strategic and tactical matters. 

Our litigation offering is as relevant for small businesses as it is for global corporations, and we have customers at both ends of the spectrum as well as everything in-between. Perhaps not surprisingly, the ability to offer fixed-price access to the English legal system and to some of the UK’s most respected barristers has proved very popular to US organizations, and we’re currently engaged in several landmark cross-border cases.

Riverview In-house Solutions is clearly targeted at in-house teams who are looking to leverage the benefits of technology without necessarily having to outsource to a managed services provider or embark on a huge IT transformation project. Early adopters are large corporations on both sides of the Pond who are attracted to the benefits of a low-risk/high return implementation that can bring automation to new or existing processes with little-to-no involvement from IT.

 

LI: Where do you see your business in 2 years?

With the overwhelming majority of our revenues coming from long-term contracts, we’re confident that we can maintain our current growth trajectory for the foreseeable future. This visibility of earnings also allows us to invest heavily in people, technology, analytics and infrastructure which provides us with a major competitive advantage. To do so while protecting our core culture and values is always a challenge but we learned how to do that successfully in our previous businesses and those are non-negotiables.

In two years we hope to be one of the go-to businesses for GCs and senior legal teams in FTSE100 and Fortune 500 businesses who want to evolve their legal operating models; who want to know how to organize multi-disciplinary teams to deliver their legal services; who want access to analytics and data that tell them stories that enable them to pre-empt risk and reduce future costs; who want to use technology that embeds and drives the desired behaviors and change sought.

Two years from now we’re likely to have an expanded international footprint for both our existing legal services business and the new technology company that we’ve recently announced. For many reasons, it makes sense to separate these two entities, and both have been built to scale very quickly. There’s no doubt that the “TechCo” represents a huge opportunity, and it’s not limited to the legal market either.

 

LI: Some people believe that LegalTech for law firms and lawyers is a bad business because the total available market is so narrow. Do you see inherent limitations to your business model?

I suppose that comes down to what you see as the available market for LegalTech. Up until now, of course, much LegalTech has been focused on eDiscovery and practice management software. That’s been useful and has brought some efficiency gains, but it’s limited in scope and scale.

Going forward, LegalTech is going to slice much more deeply into the $700 billion global legal services market, and that gets pretty attractive! What we’ve seen in small measure with eDiscovery – the automation of knowledge work once the sole preserve of domain experts (in this case, lawyers) – is going to be hugely amplified by the current wave of emerging technologies.

LegalTech seems to be increasingly in vogue in the Valley, and for good reason, because the investor community is waking up to a huge opportunity. The deregulation (or, more precisely, reregulation) of legal services in countries like the UK and Australia adds another layer of opportunity because it fosters an environment for the “business of law” in which innovation and access to capital are a given. We’re going to see some very big businesses built in this area over the next five-to-ten years.

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LI: Lawyers are not exactly the most tech-friendly crowd, do you agree, and if yes, how does it impact your business?

Some of the most tech-savvy people I know are lawyers, but that’s clearly not the norm, and nor would you expect it to be. When you look at the psychometric profile of the average lawyer, many of the traits that help them succeed as a lawyer (e.g. skepticism, autonomy, abstract reasoning) can easily become obstacles to them embracing change and the technology that’s part and parcel of it.

We work hard to recruit team members who are comfortable working with our culture and values, and who recognize the benefits that technology can bring to the process. If we’ve got it right, the technology they’re using should become a seamless part of their activities rather than an obstacle to it. It can, and should, enrich their role, and help them add value to the customer in ways that would otherwise simply not be possible or cost-effective.

At this stage of our evolution, and with the rapid growth we’re experiencing, it’s necessary for us to recruit senior lawyers from the open market, but we’ve made no secret of the fact that our medium-to-longer term objective is to grow our own because it’s a whole lot easier. In fact, our CEO Karl Chapman has gone so far as to suggest that he should be fired if we’re still recruiting a lot of senior lawyers in five-to-seven years’ time!

 

LI: Do you think the future of LegalTech will replace lawyers?

Well, that’s the million dollar question! On the one hand, we’re in an exciting era of technological innovation that is undoubtedly going to change much of our current framework for the world of work (and much more besides, of course). This will have profound implications way beyond legal services, which itself will likely get swept up in the technological tsunami that’s going to hit professional services in general.

On the other hand, much of what we’re reading and hearing at the extreme end is still a work in progress, and while some of it will ultimately come to fruition, we’re not there yet. Much of what’s branded Artificial Intelligence and Cognitive computing is still achieved using brute force with data and doesn’t yet herald the creation of truly intelligent self-aware machines that exhibit common sense and creativity.

At some point, though, regulators are going to have to deal with the issue of computers providing legal advice. With many Bar Associations in the States still tying themselves up in knots over the likes of LegalZoom and endlessly debating the non-lawyer ownership “hot potato”, one can’t help but wonder how they’ll handle algorithms outperforming some of their members! If they’re not careful, there’s a real danger that the fragmented and restrictive approach here proves to be very costly, because progressive regulators elsewhere have moved on and nobody’s about to hit the “pause” button to level the playing field!

Andy Daws

Andy Daws, VP of North America, Riverview Law

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Andy Daws was a member of the senior team at AdviserPlus before exiting with several colleagues to launch Riverview Law. As VP North America, he is based out of New York and heads up the activities on this side of the Pond, where he says he’s “having fun bringing together the often-disparate worlds of business, law and technology”.

His fourteen years in the legal and regulatory space began at Thomson Reuters in London, where he established and grew a multi-million dollar business unit working in partnership with the UK government to help drive digital transformation and consolidate thousands of websites into two pioneering portals. The project won international acclaim as an exemplar for demystifying consumer and business regulation.

 

He’s a frequent speaker on innovation and disruption in the legal industry; guest lecturer at several leading law schools; Entrepreneur Mentor for the University of Miami’s LawWithoutWalls program; Adjunct Member of the International Practice Committee at the NYC Bar; and Non-exec for a global NGO working with Third World leaders.


If you’re interested, you can follow Andy’s exploits on Twitter @dawsandy and @RiverviewLawUS

About Michele Collu

Michele Collu joined the Law Insider team as Managing Editor in 2014. Based in San Francisco, Michele is passionate about legal tech and the evolving landscape of the legal profession. Michele received his LL.M. from Berkeley School of Law (Boalt) with a Certificate of Specialization in Law & Technology. He received his J.D. from Università Commerciale ‘Luigi Bocconi’, in Milan, Italy, where he graduated Magna Cum Laude.