In 2001, New South Wales in Australia became the world’s first common law jurisdiction to allow alternative business structures (ABSs) in the legal industry.
Australia’s reforms began in 1994. In that year, legislation authorized multidisciplinary partnerships, but required lawyers to retain at least 51% of the net partnership income in order to ensure that these firms retained the ethical practices of a law firm. However, at that time, lawyers and firms did not express much interest in adopting these alternative business structures, in part because of prevailing attitudes that law should remain a profession and not be treated as a business.
Indeed, it was not until 2007 when Melbourne-based Slater & Gordon became the world’s first publicly traded BigLaw firm. The firm used some of the capital to acquire a number of UK law firms and has since grown to 1,600 lawyers globally.
On the other hand, the first firms created under the NewLaw business model in Australia were Advent Lawyers and Balance Legal in 2008. In 2013 both firms were merged and the new firm AdventBalance is now the largest NewLaw firm in the country. While working at Freehills and A&O, Founders Ken Jagger and John Knox noticed that both firm´s lawyers and clients love secondments because they enable lawyers to gain a better understanding of the business, thus providing real value to clients.
Therefore, in AdventBalance, lawyers work on straight secondment as well as helping clients with major projects and transactions. The business model is similar to Axiom´s model and both firms have opened offices in Hong Kong and Singapore in recent years. In addition to its office locations, the AdventBalance´s lawyers provide services throughout the region including in Tokyo, Jakarta, Beijing and Bangkok, and currently has over 100 lawyers on assignment throughout the region.
In addition, the most recent NewLaw member is Hive Legal, launched in 2014. Mitzi Gilligan and Simon Davidson, formerly corporate partners from Minter Ellison and DLA Piper respectively, have created a virtual firm that has won the ALPMA/Telstra Thought Leadership Award for the most innovative firm of the region in 2014.
Hive Legal is founded on collaboration (like bees in the hive), using technology so that employees can work collaboratively on client projects from any location at any time and reduce costs. This involves two vital elements. Firstly, logistics – the firm partnered with a cloud platform provider and made a commitment to be paperless. Secondly, collaboration – our staff uses multi-party video conferencing, collaborative software and a sensitivity to communication with each other to make the project work.
Another feature is its willingness to refer work to other firms and organisations within its network of allies whenever a client requests it or if the firm is not the most suitable service provider for a particular job. The firm aims to pull in the best resources from its network.
Another success story is LawPath, Australia’s largest and fastest growing legal platform “connecting people and businesses that are in need of legal assistance to the right lawyer who specialises in their area of need”. After starting several businesses, founders Damian Andreasen and Phil Morle noticed that the contracts drafted were almost identical, aside from a few individual clauses or elements that varied based on the businesses objective. Therefore, they realised they could create huge efficiencies by using smart technology to provide online legal services. The platform provides fast, affordable and more importantly, easy to use legal products and services usually at 1/10th the price of a traditional law firm.
The firm was launched in 2013 and works in partnership with global leader in legal content and technology LexisNexis. In addition, it is ready to expand internationally, starting with countries with a legal system based on common law. Also during 2013, London-based Keystone Law became the first overseas NewLaw entrant.
All in all, Australia is not only pioneer, it counts with more than a decade´s experience in the liberalisation of the industry, with an established practice of success stories. In this regard, it can provide valuable information in assessing how the NewLaw model could be implemented in other countries.
Moreover, having been a pioneer is precisely the reason why Australia has been able to allow space for a more progresive transformation. However, those countries which are currently facing these new challenges must be ready to respond more rapidly in an increasingly competitive industry at the global level.