New Legal Practice Models

After working for more than 20 years in a traditional practice, David Cossi made the move to an alternative model. Innovative models are emerging in a variety of forms, meeting the needs of clients and lawyers.

The first twenty-one years of my legal practice was with a traditional full service law firm.  The leadership, lawyers and staff at the firm were great people and highly professional.   If I was going to work at a traditional firm, this was one of the better ones.  Looking from the outside in, you would have seen that I was a partner (shareholder), manager of a significant practice area within the firm, and a member of the firm management committee.   However, on the inside, I was unhappy.  I could not see myself dealing for another twenty-one years with the demands of litigation and billable hours along with all the other commitments a traditional practice requires.

I left the firm and joined a legal group that was a virtual law firm, The General Counsel Ltd.  I did not know it at the time, but the GCL was what today is called an “alternative practice model.”  It did not have a bricks and mortar office.  We worked at our client’s place of business as in-house counsel or from our home offices when we worked as a traditional outside counsel.  There was administrative support and marketing services as well as the collegiality one finds in a traditional firm.  However, we could practice at the pace we wished. 

There were no billable hour requirements or demands that a traditional practice requires.   I was working from home or my client’s place of business and was responsible to no one but myself and my clients.  The model provided all the flexibility and freedom I was seeking.   

Growth in Alternative Practice Models
I left the traditional practice 15 years ago for a new practice model.  Today, these models have grown more popular as the information age provides individuals with greater and greater autonomy.   

Recently, the Hastings College of the Law in its Legal Studies Research Paper Series published a report on new or alternative practice models entitled “Disruptive Innovation: New Models of Legal Practice.”  The report found that although “lawyers have been complaining that they hate working at law firms, and clients have expressed increasing frustration with high legal fees” for decades it has only been in recent years that they have done something about it by creating new models of practice.

These new models “offer better work-life balance and more control over other aspects of their work lives—in exchange for which lawyers typically (though not invariably) shoulder more risk, giving up a guaranteed salary, to be paid instead only for the hours they work. For clients, New Models typically drive down legal fees by sharply diminishing overhead through elimination of expensive real estate and the high cost of training new lawyers.”

The Report identified five distinct kinds of New Models:

  • Secondment Firms place lawyers in house, typically to work at a client site either on a temporary basis or part-time (typically a few days a week). Some consist exclusively of senior lawyers who can function either as general counsel or as regional heads of legal departments in very large companies, while others place more junior lawyers to help with overflow work from in-house departments.
  • Law & Business Advice Companies combine legal advice with general business advice of the type traditionally provided by management consulting firms, and/or help clients with investment banking as well as legal needs.
  • Law Firm Accordion Companies assemble networks of curated lawyers available to enable law firms to accordion up to meet short-term staffing needs.
  • Virtual Law Firms and Companies typically drive down overhead by having attorneys work from their own homes—and again dispense with a guaranteed salary, allowing attorneys to work as little or as much as they wish. These organizations vary a lot: some are very similar to traditional law firms, while others are companies in which many of the functions traditionally performed by lawyers, notably rainmaking, are the province of the company owners.
  • Innovative Law Firms and Companies include the widest variety of different business models. The single most innovative is a company with a new monetization model—providing legal services in return for a monthly subscription fee—which allows attorneys to work in a sophisticated legal practice on an 8:30 a.m. - 5:30 p.m. schedule, little or no weekend work, and three weeks’ unplugged vacation per year. Other innovative law firms change key elements of the traditional law firm model in ways that allow for better work-life balance and also have one or more of the following elements: alternative fee arrangements, team scheduling, elimination of the partner/associate distinction and “rainmaking” requirements.

Alternative Addresses Clients’ and Lawyers’ Needs
Kent Larson, the President and founder of The General Counsel Ltd. (GCL) was interviewed for the Report and the GCL was featured in it.  He started the firm 30 years ago, long before anyone was talking about alternative practice models.  He had the vision and entrepreneurial skills to see a need and meet that need decades before others saw it.  It would not surprise me if the GCL was the first alternative practice model firm in the nation.  The GCL firm is a cross between a “Secondment Firm” and “Virtual Law Firm.”  It has always focused on providing lawyers with extensive in-house experience to companies but also has the structure that allows lawyers to provide traditional outside counsel services to clients.  The GCL has been successful for thirty years because it addresses the needs of lawyers for better work life balance and client’s desire to reduce expensive legal fees. 

A New Market
The market place that alternative practice models address is summed up well in the conclusion of the Report which states:

For decades, a market failure existed in the law. Many lawyers were dissatisfied with Big Law—but they saw no alternative if they wanted to remain in the profession. That market failure is now over. Entrepreneurship has hit the law, with entrepreneurs innovating a large variety of different models to offer not only a new value proposition for lawyers, but also a new value proposition for clients.  

New models get rid of one or more of the elements that cause lawyers to bridle. First and foremost, they often change the time norms that have proved so resistant to change at Big Law. Big Law continues to work well for lawyers who want to earn Big Bucks by working very long hours. Big Law has tried to offer alternative schedules, but this has proven difficult to do without instituting some basic changes to its business model.

New Models of Legal Practice make those changes in ways that offer lawyers several different definitions of work-life balance, including Full Time Flex, short part time hours, and schedules that allow attorneys to take substantial chunks of time off work and then return to the full time practice of law. New Models also often offer attorneys an escape from other elements of Big Law many attorneys detest, notably the mandate that every lawyer also be a salesperson, a “rainmaker.”  

This is perhaps the first comprehensive report documenting law’s disruptive innovation. It won’t be the last. New Models represent not the death of Big Law, but a growing segmentation of the legal market. What’s documented here is just the beginning.  

Where this “beginning” takes us is not clear but alternative practice models are here to stay and will only grow and develop in the marketplace as the information age provides ever increasing ease of access to information and means of production to individuals while making the support of large complex organizations unnecessary to the practice of law.  

David Cossi is a Principal Attorney with The General Counsel Ltd.  David has extensive litigation management and employment law experience, both as in-house and outside counsel. His experience includes: litigation management and employment law counseling, risk management of employee claims, regulatory compliance, drafting and negotiating commercial contracts and preventive law training. He also has executive experience in managing corporate legal departments and law firms.