Freemium and the Big Four: bold steps for firms to embrace the future legal marketplace
Another year, another Legalweek 2019. There have been a lot of great pieces about the changes coming and innovations here, including several from the Legal Executive Institute. I was going to write one too, predicting my top trends for 2019 and recapping the great conversations I had around leveraging analytics, managing messaging data, or document automation. Instead of following the crowd (and paling in comparison to David Curle's writing), I'm going to talk about Geoff Calkins.
As a kid in Buffalo, Geoff wanted to be a sportswriter. But, coming from a hyperprofessional family, he put that dream away, earned his bachelors and J.D. from Harvard, clerked with Hon. James Buckley on the U.S. Court of Appeals for the D.C. Circuit, practiced at Hogan & Hartson (now Hogan Lovells), and jogged with Antonin Scalia. Prototypical 20th Century young associate story, right?
Well, two years into biglaw life, Geoff left the law behind, enrolled at Columbia for journalism, and took a newspaper job in Alabama covering high school sports for $225/week. Later stops included covering the Marlins in Ft. Lauderdale and over two decades as the lead sports columnist for the Memphis Commercial Appeal covering everything from the Memphis Grizzlies and NCAA Tournament runs to Penny Hardaway, the XFL, and the Tyson-Lewis heavyweight boxing match.
Then came the internet.
Newspapers made content free to readers online. No longer did you need a subscription to the Commercial Appeal to read Geoff Calkins. This chase for clicks was on, but the ad revenue that long supported newspapers was nowhere near as lucrative as the revenue that came with print circulation. Giving away the content for free was not a successful model for many newspapers, and layoffs and acquisitions soon followed.
By contrast, law firms today are leveraging their expertise and the AI empowered tech they build or buy into making more and more resources available to clients online free of charge. White & Case allows clients to create custom charts comparing M&A and Private Equity data. Norton Rose Fulbright offers a suite of solutions on its website, like ContractorCheck, assessing employee and contractor status for workforces across several jurisdictions. Cooley features Cooley Go, which includes a document index featuring free templates for a convertible note term sheet, website terms of service, and NDAs. Goodwin makes Founders Workbench available to clients, including free legal documents to help start a business and a capital calculator. Fragomen has a searchable Case Studies portion of their website that, according to the firm, shares their best case studies and success strategies.
This is different from firms publishing whitepapers on trending topics, long a staple of business development for firms of all sizes. This is providing services for free that would have been billable roughly a decade ago. Solutions like this are becoming omnipresent, and were in full display at Legalweek on panels as exemplars.
Will it work?
Increasingly, large law firms are betting it does. As clients turn to alternative outlets for legal services, firms are fighting to stay front of mind for its existing and prospective clients. By being a trusted resource, and making some services freely available, the argument is that it will engender goodwill and keep clients coming. It also frees up attorneys to handle more complex issues than bill for simple answering of questions or passing along templates. According to the 2019 Citi Hildebrandt Client Advisory survey of US law firm performance, law firms are seeing their best growth numbers in a decade. So, since biglaw bottom lines are largely recovered from the Recession and associate salaries are rising, it seems that firms aren’t suffering financially because of giving away the content. While this data is not applicable to midsized firms, the survey data suggests that unlike journalism, a little freemium is helping biglaw retain clients and hire associates.
Of course, firms are nonetheless feeling pressure to provide more services for their clients. Their business is being siphoned off by more competitors outside the AmLaw world. In addition to nimble and hungry midsize firms, and alternative service providers, Big Four accounting firms are taking steps into legal services. As Legalweek reminded us in their opening session on Day 1, Ernst & Young acquired Riverview Law in the UK. Pricewaterhouse Coopers, who launched ILC Law in Washington DC to advise American companies on oversees matters, struck “a strategic alliance” with Fragomen in 2018 to provide global mobility tax and immigration services after a 2017 deal with GE taking on 600 lawyers and accountants. This announcement came not long after Deloitte’s British arm announced a similar partnership with Berry Appleman & Leiden. The Big Four want to do more than audit you. At the least, they want to provide you LMS. The focus is still narrow, especially as law firm ownership rules in the US are more stringent than in other countries. My colleagues at the Legal Executive Institute do a good job reality checking the fears of the Big Four coming to disrupt biglaw. But, as clients want more for less, and as technology continues to make legal services cheaper, law firms are changing. Whether it’s offering more free services, or partnering with competitors, law firms are open to new, even unconventional directions in the industry.
Making the jump from biglaw to sports columnist was not conventional. Geoff Calkins admits he wasn’t sure at the time if it was the right move. But he knew he needed to change, and took a bold step.
And then came the internet.
Declining subscriptions to print media caused Geoff’s paper to go from a profitable local daily to declining circulations leading to the paper’s acquisition by a generic national-media conglomerate that saw the paper’s quality suffer. So Geoff left to join the Daily Memphian, a new, online-only nonprofit newspaper. It’s an online-only news provider that’s locally owned, locally focused, and, notably, has a paywall. It’s another bold step. But, bold steps have worked for Geoff. As tech changes how we reach and serve our clients, bold steps will work for law firms, too.