Spotlight on the Australian New Law Landscape New

Spotlight on the Australian New. Law Landscape New firms; new structures; new pricing and new careers Peter Moran

Before I begin Spotlight on the Australian New. Law Landscape • A view from the trenches… • I am not an academic, consultant, researcher etc. • I am a lawyer and a partner in law firms (3 so far) and an employer of lawyers. • I have worked/been a partner in Big Law (Allens), a two partner practice, a boutique commercial firm and a tier-2 independent full-service commercial firm. • In 2017, I founded my own New. Law firm: Peer Legal – www. peerlegal. com. au. • Also, I am a founding member of the Law Institute of Victoria’s Technology and the Law Committee, a former co-chair of that committee and currently the co-chair of its Reform and Regulation Sub. Committee. Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 2

Peer Legal has: A bit about my firm… • No employees, no hard assets, no leasehold rights, no hard copy files, location agnostic, (almost) no paper. • 1 junior lawyer, 2 senior associates, 1 managing associate, 2 special counsel, 1 principal, all residing in Melbourne (although until recently, the junior lawyer resided in Brisbane). • 1 practice manager (residing in Sydney), 1 accounts manager. • All staff work as contractors. • All work through a common virtual server and have their own remote desktop. No data held outside the virtual server environment. Cybersecurity focus. • Non-traditional hierarchy: team members work as much or as little as they choose, are remunerated based on billings and also get payments for relationships they bring to the business including clients, lawyers and other. Pathway to being a principal is a question of experience and economics. • Fixed pricing wherever possible with a focus on aligning the pricing with the client’s needs and value being delivered. • Focus on medium sized businesses, family offices and high net worth individuals. • Part of the Steward network of lawyers: www. stewardlaw. com. au Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 3

New. Law is a broad church of businesses providing alternative services using different business models in the legal services industry. The New. Law tipping point – Eric Chin, June 2016 What is New. Law? Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 4

A club - “a tier two, full-service firm of individual practitioners who enjoy each other's company. It is a nice, collegiate, shared-office environment where partners enjoy a relatively high degree of autonomy and welcome the occasional cross-selling opportunity. ” “The club, as a business model, is about to die. ” What is New. Law not? Joel Barolsky – Australian Financial Review - Jun 21, 2018 Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 5

“Whilst many traditional law firms are using cut and paste to adapt and update their professional partnership models, New. Law firms are typically starting with a blank piece of paper to imagine and enable their business models Judith Bennett, Ph. D Candidate, University of Melbourne What is New. Law? Watch this space…Professions in the Future? New. Law firms in a new legal world – Judith Bennett – University of Melbourne Due for publication late next year. Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 6

My concept of New. Law is of lawyers trying to practise law, deliver legal services and operate a legal services business/structure by not necessarily accepting the paradigms of the past as the best way. A New. Law business critically assesses whether benefits could arise from doing things differently and then commits to the change required to actually do those things differently. New Law…a practical definition The underlying motivation for doing things differently is to remain competitive in the markets for both clients and staff. That, fundamentally, means the motivation of a New. Law business is one of aiming to benefit the market/society or the people within the organisation or, ideally, both, in order to maintain or grow profit. Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 7

New. Law as a contrast… What is New. Law? • New. Law v Big. Law • New. Law v Traditional Law • New. Law v Old Law • New. Law = Innovation • New. Law = Better, more attractive to talent and clients • New. Law = more $$$$$$ Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 8

Australasian Lawyer’s 25 Most Innovative Law Firms List 2019 Ascenta Gilbert + Tobin Ashurst Dentons Greenwoods & Herbert Smith Maddocks Freehills Mills Oakley Hamilton Locke Minter Ellison HBA Legal Pragma Herbert Smith Freehills Separate Together K&L Gates Source Legal Keypoint Law Gadens Lander & Rogers Galilee Solicitors Legal. Vision Bird & Bird Clayton Utz Colin Biggers & Paisley Coutts Solicitors & Conveyancers LOD (Lawyers On Demand) Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 9

Remove traditional/global law firms – 11 Left Ascenta Hamilton Locke HBA Legal Pragma Separate Together Coutts Solicitors & Conveyancers Galilee Solicitors Source Legal Keypoint Law Legal. Vision LOD (Lawyers On Demand) Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 10

Remove “non-law” firms – 7 left Hamilton Locke Pragma Coutts Solicitors & Conveyancers Galilee Solicitors Source Legal Keypoint Law Legal. Vision Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 11

Remove firms more than five years old – 5 left Hamilton Locke Pragma Source Legal Keypoint Law Legal. Vision Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 12

Some common elements in current New. Law businesses 1. • • Flexible work practices: Working from home, other locations, remote desk-tops, virtual servers eg Hive, Lawyers on Demand, Free Range Lawyers, Orbit 2. Alternative Fee Arrangements • • Fixed fees, success fees, value billing, aligned pricing eg Moores, Aptum, Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 13

Common elements in current New. Law businesses 3. Focus on legaltech and uses of disruptive technology to deliver • • Social media marketing, AI tools, contract automation, smart contracts eg Legal Vision, ALT (Freehills), Titan, Contract Probe 4. New partnership structures/less hierarchy • • • Eat what you kill, referral fees, shared management entities Profit share/income available at more junior levels eg Keypoint, Nexus, Mills Oakley, Peer Legal, Steward Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 14

New. Law – a breakdown 4 types of New. Law Businesses • • New law firms doing it differently from the beginning including providing non-legal services Traditional law firms trying to change and do it differently Non-law firms providing legal services or services that compete with legal services eg legal information Business that are deliberately supporting the New. Law firms and their models Spotlight on the Australian New. Law Landscape | 14 May 2019 Page 15

Larger law firms are increasingly going to struggle to keep their best experts as they turn to freelancing and sole practices… • Locked into pre-gig economy overheads • Better returns on time and more independence away from firms • As lack of brand loyalty and differentiation between larger law firms grows, individual relationships become more important • In-house placement businesses: Lawyers on Demand/Lexvoco/Peerpoint • Legal referral services: Alifery/Free Range Lawyers/Legally Yours/Law Adviser • Practice collaborations/franchises: Steward/Your Law Firm/Unlike Minds/Stacks The Rise of the Lawyer Network Platform Spotlight on the Australian New. Law Landscape | 14 May 2019 Pag e 16

Law firms are increasingly going to struggle to keep talent… • A trend started by the GFC and the need for big firms to reduce their numbers of partners • Ashurst went from 186 in 2013 to 142 in 2016. • Setting up a law firm has never been cheaper or easier. • No need to have lots of support staff, hard copy files, photocopiers, receptionist, paralegal teams. • Law firms can’t compete with a micro-firm on price, responsiveness, flexibility as far as clients are concerned and return on time, freedom, flexibility and general partner happiness. The Rise of the Micro-firm Spotlight on the Australian New. Law Landscape | 14 May 2019 Pag e 17

1. 2. 3. 4. 5. 6. 7. 8. The Rise of the Co-operative Lawyer Network Solicitor’s Clerks CX comes to the legal sector Mega-Franchises with micro-franchisees Continued blurring of the line between legal services, legal information, legal commodities, para-legal services. The death of the law firm or at least of the traditional law firm structure The rise of full service professional services firms. Continued consolidations/mergers/gobbling up Still to come, the next decade or so… Spotlight on the Australian New. Law Landscape | 14 May 2019 Pag e 18