Monday, September 12, 2011
A "virtual" law firm "based" in D.C. boasts revenue that has "exploded," according to this story from the Washington Post via the ABA Journal blog. And the firm is expecting substantial growth ahead. The firm, Axiom, has no offices and no partners. Instead, its lawyers work from home or at clients' offices and they bill at half the rate of their BigLaw counterparts. They don't do litigation but are a low-cost alternative to the traditional law firm for transactional and regulatory work.
Here's an excerpt from the story entitled "Nonconvetional law firm makes inroads in D.C. market" that provides a bit more detail.
Two years after jumping into the Washington market during the depths of the recession, Axiom Law, a legal services provider with an unorthodox business model, is making major inroads here.
Last month, Axiom reported 80 percent year-over-year revenue growth in its local office, and in-house lawyers at some of the region’s biggest companies are turning to the company as they look to trim legal costs.
Axiom is not technically a law firm: its attorneys don’t do litigation or give legal advice. But they do offer lower rates (typically between $150 and $275 per hour) for project-based work on transactional matters, contracts and regulatory and compliance-related research — the type of work businesses want done by experienced, skilled attorneys but don’t want to pay big firm rates for.
. . . .
Axiom is different from a staffing firm that maintains a roster of contract attorneys to pair with clients in need. Instead, Axiom employs attorneys — 600 worldwide, including 30 in Washington — full time. Most have at least eight years of law firm or in-house legal experience and make an average salary of $200,000 a year. Many come from in-house teams at Sprint, Nokia, Goldman Sachs and law firms including Davis Polk, Sullivan & Cromwell, Cleary Gottleib and WilmerHale.
The companies that use Axiom say it is more of a complement to outside counsel than a replacement.
. . . .
The firm began in New York in 2000 and opened its Washington office with one attorney in January 2009. It has since grown to 30, and is projecting 100 percent growth in the third quarter compared to the same period last year, thanks to major contracts that began in June and July, said general manager Will McKinnon. Across its nine offices in the United States, Hong Kong and London, the company has exploded from $1 million in revenue in 2002 to $80 million last year.
“We bring a different perspective to getting legal work done. That’s why we can bill lower,” McKinnon said.
Other low-cost firms (Paragon in San Francisco, FSB Legal in Atlanta, Outside GC in Boston and Philips & Reiter in Houston) have created successful niches in regional markets, and observers say the model has staying power.
“I think the world is ready for alternative methods of legal service delivery other than the traditional law firm,” said Jeffrey Lowe, managing partner of the Washington office of legal recruiting firm Major, Lindsey & Africa. “I think the clients are much more sophisticated and well-informed than they used to be.”