Allen & Overy: An Old Firm With A New Strategy
Allen & Overy (A&O), the blue-blood UK-based global law firm recently announced the launch of a technology innovation space inside its London office. The new venture, named ‘Fuse,’ will provide space tailored for 60 entrepreneurs from start-up tech companies and other participants. The techies will be provided more than well-located, comfy digs—they will also have access to A&O lawyers, technologists and firm clients. The tech entrepreneurs have yet to be selected—that comes next month with a September move-in date-- but the firm has a good idea of their profile. It is seeking IT companies focused on three areas: (1) ‘legaltech’ -technology that supports legal advice; (2) ‘regtech’ -IT to support regulatory compliance; and (3) ‘dealtech’-IT that streamlines deal making. Not surprisingly, this dovetails three key firm practice areas.
The collaborative effort involving the firm, its clients, and IT entrepreneurs will no doubt lead to new products, better client solutions, and greater ‘stickiness’ between A&O and its clients. It will also likely result in new product lines that A&O has a financial interest in. Fuse will also create ties with tech talent outside the firm as well as secure A&O’s place in the vanguard of UK legal technology innovation. This is a far cry from the short-term approach taken by most traditional partnership model law firms.
A&O’s Fuse initiative is not the only law firm/IT start-up collaboration in the UK—or elsewhere. Earlier this year, for example, Mishcon de Reya launched a more modest program that will provide firm office space to a number of small tech companies during the summer. Addleshaw Goddard funded a fintech start-up mentoring program, and A&O partnered with Baker McKenzie to create a legal innovation zone within Ulster University. And that’s just what’s happening on the other side of the pond.
Global behemoth Dentons launched NextLab in 2015, describing it as a ‘collaborative innovation platform focused on developing, deploying, and investing in new technologies and processes to transform the practice of law around the world.’ A number of US firms are also kick-starting technology initiatives and collaborating with legal tech companies. This activity speaks not only to the integral role technology plays in legal delivery but also to the proliferation of legal ‘products’ that are replacing services. The days of routinized ‘legal’ work being delivered by high-priced associates are clearly over.
Forward thinking firms like A&O—as well as some in-house legal departments and elite providers-- see the writing on the wall. They identify ‘legal’ issues as components of ‘business challenges’ that require legal, IT, and resource management expertise. That requires collaboration—internally as well as with clients and other service providers-- and an ability to integrate the different solution ingredients. Allen & Overy has assembled—and integrated—several different elements of this mosaic. The ‘Fuse’ initiative is merely the latest one.
A&O Has Created An ‘Advanced Delivery’ Capability That Differentiates It
A&O’s ‘Fuse’ initiative is part of a broader strategy designed to: (1) differentiate the firm’s already well-burnished brand; (2) enhance its already formidable delivery capability by having a direct hand in cutting-edge technology focused on core practice areas that include deal-making, regulatory, and finance; (3) create products that will augment the firm’s services in those areas; (4) expand the technological expertise and reach of the firm beyond its internal IT department; (5) meld the firm’s elite legal expertise with technology and resource management, offering clients a wide range of services and products appropriate to the matter or task; and (7) find solutions—not simply legal ones—that advance client interest. This is an example of a law firm thinking creatively, strategically, and boldly to solve client problems. It is the merger of the practice of law with the delivery of legal services.
Jonathan Brayne, an A&O partner and Chairman of Fuse, explained that client challenges require tech and resourcing solutions, especially for a firm like A&O that engages in global practice. Five years ago, the firm began putting together the technological and resourcing elements that would enable it to provide ‘advanced delivery’ to address the explosive growth of documents and law generated by cross-border litigation and transactions. A&O recognized that not all matters-- or tasks-- required the firm’s ‘ bespoke services and premium fees. It analyzed which tasks could be undertaken efficiently, cost-effectively, and in an integrated fashion by resources--human and machine—with a different pricing and qualification model and supervised by the firm or clients directly. This process resulted in the creation of a suite of ‘right resource for the right task’ capabilities integrated under the A&O brand. The capabilities can be divided into resourcing and technology.
The Resourcing Elements
The Legal Service Center (LSC), a Belfast-based operations center, was the initial resource component the firm developed. LSC works with A&O worldwide on a wide range of document-based matters, including due diligence, litigation reviews, drafting, negotiating and research tasks. LSC is able to deliver high quality support via project management, workflow technology, and a tight working relationship between the firm, LSC personnel, and clients. LSC functions as A&O’s captive legal process outsource company or ‘insource provider. ‘
A&O has also created a high-end, agile contract lawyer service called Peerpoint. This group of experienced, independent lawyer/consultants works with clients and/or A&O. The ‘gig economy’ feature of this offering responds to a growing market appetite for highly skilled, agile lawyers operating on a lower-cost basis than full-time firm employees. The work model also suits a growing number of lawyers looking for alternatives to the work-life imbalance many associate with large law firms.
The firm has also created a project management office comprised of a cadre of trained managers (some, but not all of whom are lawyers). This core group serves two key functions: (1) it works with the firm on large client matters; and (2) it operates as a center of excellence within the firm, teaching lawyers ‘the Allen & Overy way’—especially as it relates to project management skills.
The Technology Components
A&O has also created a suite of technology resources. Its backbone is the legal technology team, a group of ‘tech gurus’ that work in one place and are deployed-- like the project management team—as both a client and internal resource. The legal tech team is supplemented by a group known as i2, a team of younger people in the firm dedicated to brainstorming new ideas and to implementing the best of them. The group serves a continuous improvement function for the firm.
Fuse rounds out A&O’s current roster of IT initiatives. The plan is for A&O’s legal technology and i2 teams to be housed adjacent to the tech start-up invitees to promote greater synergy. The firm’s clients will have direct access to all three of these groups.
Perhaps the most groundbreaking of A&O’s initiatives is its joint venture with Big Four giant Deloitte.’ MarginMatrix’ uses automation to facilitate bank compliance with regulations governing the derivatives market. The solution is designed to codify the laws in various jurisdictions and to automate the production of tailored documents. A&O contributes the technology solution, and Deloitte provides its program management and resourcing might. It’s the first time a major law firm has partnered with the Big Four and powerful evidence of A&O’s willingness to collaborate—even with potential competitors. Jonathan Bayne sees Margin Matrix as an ‘output’ of the firm’s commitment to ‘advanced delivery.’
Mr. Brayne describes ‘aosphere,’ another offering he led with Marc-Henri Chamay, a Swiss computer engineer, as the earliest example of the firm’s ‘advanced delivery’ commitment. It provides online solutions for a range of legal issues arising in cross-border situations--another key focus of the law firm. The self-serve approach is designed to reduce legal, operational, and regulatory risk at low cost. The suite of products is updated regularly and can be supplemented by ‘bespoke’ counsel should the need arise. Mr. Brayne hopes that Fuse will spawn additional outputs.
Allen & Overy has undertaken a series of initiatives that provide clients with a range of matter-appropriate options for solving business challenges. The firm has leveraged its brand once synonymous solely with legal expertise. That core expertise remains, but it is complemented by a suite of technological and resourcing capabilities that enable solutions to be tailored to the size, importance, and value of the client challenge. A&O’s willingness to invest in the firm’s future sustainability will no doubt prove attractive to clients, providing it a solid return.
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