Ken Jagger, Chief Executive Officer, AdventBalance

Companies today are so conscious of their law firms’ costs that they give them very small pieces of information, and ask them to work on very discreet tasks. In contrast, our lawyers are able to get to know the client and understand its objectives in a way that an external lawyer never could.

AdventBalance provides “insourced” lawyers to corporate clients on a fixed fee basis. In February, 2016 (subsequent to this interview), AdventBalance announced it would merge with UK-based Lawyers On Demand.

My background is as a partner with one of the larger firms in Australia, Freehills, which is now Herbert Smith Freehills. When I was with Freehills, it occurred to me that there are many lawyers who enjoyed working more flexibly. Also, we sent a lot of lawyers on secondment — where our lawyers went to work in the premises of our clients’ business. Our lawyers learned a lot and the clients loved it as they got switched on people who really understood their business. The only people who didn’t enjoy it were us, the partners of the law firm. We felt we were losing money as we couldn’t charge as much for the seconded lawyers and there was a significant risk that the lawyers that we had trained, would take up permanent employment with our clients.

I realized that there was a business opportunity with this type of arrangement, but that it needed to be done from a different structure. It couldn’t be done from a traditional partnership structure where it was all about the hourly rates. This could succeed only if it were done in a totally different way.

This is what makes our regulations in Australia important. It allows us to set up a corporate structure and not a partnership, and to run it on corporate principles.

What is great about what we do is that it allows the new generation of lawyers to work differently. They no longer are obliged to go to a law firm, where they work for many years 10, 12, 14 hours a day, seven days a week, with the holy grail of partnership at the end of it. We allow lawyers to work in a different way, and also give clients what they want.

There are a variety of reasons why our clients can need a lawyer on a temporary basis — to fill a gap when a member of the legal department needs to focus on a specific project or is on leave of absence, to meet an increase in workload due to specific projects, to provide special expertise for a specific project, or when a company simply needs a more flexible labor force and isn’t ready to hire a lawyer for a permanent position.

The reason it works is because we keep our overheads very low. In our offices, we have just a small number of management and administrative staff. Our lawyers work at our clients’ premises. By keeping our overheads low, we are able to pay our lawyers what they would have earned if they had stayed with a traditional law firm.

We have a Board of six people, including the Chair. We run Advent Balance as a company, not as a partnership.

We have 13 shareholders — just five are involved in the operation of the business.

All of our shareholders are individuals. Some of them are lawyers, but many of them are not. Those that are not have some connection to law, for example they studied law but now work in other fields. The fact that they have a connection of some kind to law has helped them to understand the business, and to be comfortable as in investor in it. They have also been encouraged by the success of other legal companies, like Slater and Gordon, and Axiom in the US, and they’ve seen a lot of potential for investment in the legal sector.

Technology is of course very important to us. This business could not exist without it. Because our lawyers are spread out across different locations, we need technology to stay in touch, to keep them as part of the family. That being said, we do not use any special or proprietary technology — just the same things that everyone else uses.

We serve clients in Australia, as well as in Singapore and Hong Kong. It is logical for us to be there, as well as in other places in Asia, as that is where our clients are.

We have about 140 lawyers. Being an AdventBalance lawyer isn’t for everyone though– our lawyers are put into new situations every three, six, nine months — it’s like starting a new job each time, and there is uncertainty. Some people like moving around and having new challenges like that, but some do not.

What our lawyers like is the flexibility. They can work on a project for those three, six, nine months, and then take time off without being afraid of losing their jobs or being set back in their careers. They also like the variety — for example, on one project they will work in a bank and then on the next one they will work in an oil and gas company.

While we have lawyers of all ages and lengths of experience, our typical lawyer is in their 30s and early 40s, with about 12 to 15 years’ experience. They will have worked at top tier law firms. They are at that stage of life where they want or need to work flexibly, and they do not want to work all hours of the day and night.

We give our clients a fixed price per day. But the day is not from 7 am to 10 pm – it is a sensible length — that is the deal we make with the client. Our lawyers can maintain a work life balance. That is what attracts lawyers in their 30s and 40s to us.

A fixed fee is very important to making sure that it is a sensible working day.

Our client list is a list that any law firm in town would be happy with. So not only can we offer our lawyers flexibility and variety, but also we can offer them top-end, interesting work.

Companies today are so conscious of their law firms’ costs that they give them very small pieces of information, and ask them to work on very discreet tasks. In contrast, our lawyers are able to get to know the client and understand its objectives in a way that an external lawyer never could.

To get the lawyers we want, we have to pay market salary. Lawyers want the flexibility, but they are not willing to sacrifice salary for it. By stripping out the overhead, we are able to charge the client less than what they would have paid to a traditional firm. But even more important for the client is the price certainty. Clients like that we charge them a fixed price, and that, unlike with hourly billing, there are no surprises when they receive our invoices.

Since we do not bill by the hour, we do not evaluate our lawyers based on the number of hours they bill. We evaluate our lawyers entirely based on the feedback we get from the client, and how happy the client was with the lawyer’s service. Our lawyers like this a lot — no timesheets, no worries about billing 2000 hours a year.

In Australia, the take-up of alternative structures is taking time. Yes, we have the first publicly listed law firms, but there has been a faster take-up in the UK. I suspect that is a function of larger markets and more economic opportunities there.

I think that alternative structures are good for the profession. They have given lawyers different opportunities. Until recently, as a lawyer your choices were working for a traditional law firm, working in-house, working in government, or leaving the law altogether. So many lawyers have been driven out of the profession, especially women. What a waste of a good education, and good experience. And it’s such a shame, given that most of the lawyers I know enjoy practicing law. They just don’t want to do it 20 hours a day, seven days a week, year after year.

Today, firms like ours offer lawyers other ways of practicing. This is good as we are losing far too many people from the profession, and notably far too many women. 70% of our lawyers at AdventBalance are women, and that is because our model suits them.

I think that lawyers in the US and Canada should be pressing for changes to the rules.

It used to be the case that if you worked hard and were a decent lawyer, that you would make partner. You had to work hard for it, and after you got it, you had to continue to work hard. But it was an attainable goal.

This is no longer the case. It is a saturated market, where firms squabble over diminishing market share. Partners are holding tightly onto partnership, so access to partnership is all but closed to other lawyers — you have to be both brilliant as well as lucky to make partner.

Without the regulatory change, lawyers don’t have options. With corporate structures, a lawyer does not need to be a partner anymore — they can be employed shareholders, just like any other company. With share incentive programs, they can become owners of the business without having to go through the partnership process. You can set up a remuneration structure that allows people to go away for a while and come back, that allows for women to go on maternity leave without setting their careers back, and yet still lets the go-getters flourish.

Without alternative structures, I see the profession failing. Partnership is a failed business model — it just hasn’t completely failed yet.

Law is a business, and it has been for quite some time.

The argument that alternative structures will result in unethical behavior makes no sense. We all have to conform to the ethical rules whether we are in a corporate or partnership structure — if we didn’t, we would be out of business very quickly. The argument that alternative structures will result in unethical behavior is the argument of a guild that is looking to protect its monopoly.

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