By Mårten Janson
NewLaw – what is it?
NewLaw (a concept coined by Canadian lawyer Jordan Furlong, among others, which is commonly referred to as disruptive or emerging law) is slowly but steadily making its way into the legal community. This phenomenon, most visible in the USA and above all the UK due to the recently introduced ABS regime, deserves its own discussions and debates within GGI as well, because it is here to stay. In short, NewLaw firms offer models, processes and tools that represent a significantly different approach to the creation or provision of legal services than that which has been traditionally employed by the legal profession.
Interest within GGI
The Legal Department as a Service (LDaaS) is a productised service within the meaning of NewLaw which has been developed by GGI Finnish member Fondia. When discussing the LDaaS at the GGI European meeting in Lausanne in April 2015 and at the GGI Nordic-Baltic meeting in Helsinki in September 2015, it became obvious that there is great interest among a number of GGI members in the business potential associated with this offering. This article will share the rationale behind the LDaaS with the GGI community.
Problem and solution
First, a summary of the problem: SMEs – and increasingly also larger companies – do not have the means to employ their own legal counsel or a large legal team and their requirements for legal services can fluctuate significantly. One employed lawyer represents a fixed (limited) resource and range of available expertise. The only alternative so far has been to use law firms’ services, which is generally considered expensive and usually lacks the business insights and pragmatic approach of in-house lawyers that ongoing legal matters require.
The LDaaS was developed to make supply and demand a better match. The LDaaS gives the company access to an entire legal department of its own, which in practice, means all lawyers’ expertise is available to the service provider, if required. Bigger companies, including those that are listed, have seen the benefits and possibilities this scalable service offers over employing their own legal counsel(s). The outsourced LDaaS secures the continuous business-relevant legal support. For many clients, LDaaS is a strategic choice and a more reliable option than an internal legal resource, as it removes the HR risk, yet guarantees needed expertise. LDaaS builds on a business legal analysis and proactivity; clients need not to worry about unexpected legal risks and their costs. The LDaaS is a proactive service (in relation to normal reactive law firm services), with the aim being to establish and maintain the appropriate legal platform, training and processes that each customer requires and deserves.
Preferably fixed fees
The LDaaS flourishes when combined with a recurring fixed fee, which enables customers to calculate and budget their legal expenses. The service provider must produce quality legal services to remain the preferred partner, but can be profitable only if the services are produced efficiently, optimising the output. When carried out properly, the absence of the hourly fee yields many dynamic effects, while there are few downsides.
Increased focus on efficiency and productivity
Optimisation of ongoing legal support requires a clear focus on internal efficiency. For this reason, the LDaaS leverages advanced digital tools. These comprise solutions such as client team workspaces, extranets, digital knowledge management resources, contract generators, e-learning solutions and online self-help solutions (for example, the Virtual Lawyer: http://virtuallawyer.fi, a comprehensive source of self-help legal advice with more than 8,000 users).
LDaaS – fluffy theory or evidence-based success?
For those sceptical of the LDaaS concept, in just ten years, Fondia has become a top-ten size law firm in Finland and currently ranks third in reputation among all Finnish law firms. In addition, 97% of Fondia’s clients would recommend its services, especially the LDaaS, to others. Fondia currently has almost 150 LDaaS customers, securing 50% of its revenues with their prepaid monthly payments. The remaining revenue comes from traditional project work such as M&A, financing and litigation.
The LDaaS gained international attention at the Financial Times FT Innovative Lawyers Awards in 2013, when Fondia was awarded for having the best corporate strategy in Europe. In 2015, Fondia has once again been nominated and shortlisted by the Financial Times for being among the cutting edge innovative legal service providers in Europe. The Financial Times will render its judgement at the start of October 2015.
After successful piloting in Finland, the next logical development phase would be to explore the possibilities of expanding the LDaaS service internationally, with interested GGI members, for example. This would benefit multinational corporations and other companies with significant operations outside their domestic markets.
This article was written by Mårten Janson, Executive Director at Fondia Oy, a company established in 2004 and a GGI member since 2015. LDaaS is a trademark of Fondia Ltd. Mårten will be attending the GGI World Conference in Boston, MA, USA.
GGI member firm