Take the law into your own hands
By Alison Maitland
Published: November 27 2007 02:00 | Last updated: November 27 2007 02:00
Mark Rotenstreich has an unusual working life for a high-flying Manhattan lawyer. Not only does he choose which clients to work for, he also typically puts in a 40-hour week, has free weekends and takes vacations when he wants without fear of interruption.
"I work very hard but have much more control over my life than I would at a law firm," he says. He works in an office in his apartment building or at the offices of his clients, which include The Economist Group, Virgin Mobile and A Small World, a social networking site.
"I truly enjoy what I do every day, which is something that most law firm lawyers and many in-house lawyers would never say. Plus, I feel appreciated by clients in a way that I never felt when I was at a firm or in-house."
Mr Rotenstreich, 45, is employed by Axiom Legal, one of an emerging group of alternative professional services firms filling gaps in the market for bespoke support for corporate clients while offering job flexibility that most lawyers, accountants and management consultants in traditional firms can only dream of.
Technology is helping to drive this trend. On the one hand, it enables communities of associated professionals to operate virtually, each working from home or a client's office with just a networked laptop. On the other, by blurring the boundaries of home and work and making it harder for people to switch off, it is feeding a desire for greater flexibility and choice.
Axiom launched in New York in 2000, and has seen rapid growth, opening in San Francisco last year and London this year. It operates with minimal office space and no costly partnership pyramid. This enables it to hire out experienced lawyers to corporate clients at a third to half the rate of the so-called "Magic Circle" of big City of London law firms, says Alec Guettel, co-founder.
"We cover the entire spectrum of what our clients do with one key exception - we don't compete for the multi-billion dollar M&A deals and the biggest litigation," he says.
Axiom, whose clients include Goldman Sachs, Morgan Stanley, Cisco and Yahoo, had revenues of $31m last year. It employs nearly 200 lawyers, most of them with experience of big law firms and corporate legal departments. The gender split is 50/50. "We compensate competitively with Magic Circle firms," says Mr Guettel.
One of its new UK recruits is Penny Froggatt, 42, a former Lovells lawyer and ex-head of legal at Legal & General. She joined Axiom after working as an independent lawyer for several years to gain the flexibility she needed with two children.
"The market is pretty ready for this," says Ms Froggatt. "It's nice to be involved with a new, young dynamic company [like Axiom] that's trying to be something different in an area that's been so traditional and stuck in its ways."
Reuters was Axiom's first blue-chip client in the US, using it for things like customer and supplier contracts, M&A deals and maternity leave cover, says Rosemary Martin, general counsel of the business information and media group.
Axiom's lawyers cost less than law firm secondments and know the business better than someone provided by a temporary staffing agency, she says. "They are generally very experienced yet available at short notice."
Ms Martin thinks Axiom is at the beginning of what may be a wave of change. "It's very interesting that they appear to have very little trouble recruiting the quality of qualified lawyers they want. Partners in law firms are saying the 'Generation Y' lawyers don't seem to be quite as willing to sell their souls to the devil for very high remuneration. They do seem to want quality of life, which might be slightly alarming for the private practice law firm modus operandi."
How do Magic Circle firms respond to the emergence of this new model? "In a dynamic legal market, firms will respond differently," says Stuart Popham, senior partner, Clifford Chance. "Clifford Chance has always been at the forefront of developments in the legal world and welcomes innovation, but does not see it as a threat, nor as a challenge."
Axiom says a few others are now operating similar models, though on a smaller scale.
"We think it's a great sign," says Al Giles, a former Linklaters lawyer now running Axiom in the UK with Mr Guettel. "In the cases where our lawyers work in more flexible arrangements, we're helping our clients experiment a bit. There's a natural trepidation about flexibility - we give them a low-risk way to see it in action."
Eden McCallum operates a similar business model in strategic management consulting. Established by two ex-McKinsey consultants in London, the firm does not directly employ its professionals, however.
Instead, it draws on a pool of about 150 freelance consultants to work on projects for its corporate clients, with 350 others to call on if necessary. These consultants, more than 60 per cent of them men, value the fact that flexibility comes without having to sacrifice earning power. Launched in 2000, the firm has grown fast, with turnover expected to reach £16m ($33m) this year, says Liann Eden, co-founder. It will open its first international office in Amsterdam next year.
On a much larger scale, Resources Global Professionals is an alternative firm providing accountants, IT, human resources and other specialists to assist companies on projects. Originally part of Deloitte & Touche, it has more than 3,200 people on assignment internationally and revenues of $736m.
Its business model allows it to charge much less than big accountancy or consulting firms, says Karen Ferguson, president for North America.
"We do a lot of high-level interim management work and we go into consulting projects, but we don't own the work. The resource is owned and managed by the client."
Unlike Axiom or Eden McCallum, Resources sends large teams into companies for projects such as Sarbanes-Oxley changes or integrating acquisitions. It also has a big infrastructure of offices to manage client relationships, recruitment and administration.
Like the other models, however, it offers job flexibility. Associates, who typically have 16 to 20 years' experience, are paid by the hour rather than earning a salary, so they can choose their projects, take long periods of time off, or work fewer days a week.
One of the attractions is being able to focus on work without being distracted by politics, says Ms Ferguson. "Corporate politics is something lots of people are very tired of after 20 years of it."
Mr Rotenstreich at Axiom would agree with that. "I earn less than I would as a partner in a law firm. It's a trade-off that I'm happy to make because I have a life and I'm happy with what I'm doing."
Copyright The Financial Times Limited 2007
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