At the outset, let鈥檚 quantify the potential time we鈥檙e talking about. According to the recently published Future of Professionals report from 成人VR视频, the lawyers surveyed thought that the benefits of using artificial intelligence (AI) in their workflows could save them an average of 4 hours per week, or roughly 200 hours per year. For in-house counsel, operating under constant pressure to do more with less, this presents a rare opportunity for them to actually get more of something.

Considering the options

So, what to do with this newfound time? Some of the options identified by in-house lawyers are similar to those for outside counsel.

First, more time can be dedicated to training and developing younger lawyers. Whether a young lawyer works in-house or in a law firm, mistakes will happen that often will take time and resources to correct. Time spent training these young lawyers to be better lawyers faster will minimize the number of mistakes they make, resulting in a higher quality of work faster.

Another similar option for in-house lawyers and outside counsel for newly freed-up time is to actually spend less time at work. In-house lawyers are certainly not hurting for matters that demand their attention. So, if the tech adopted by a corporate law department can deliver on its promised efficiencies, then each of these matters should have at least certain phases or tasks that will take less time to complete.

Another similar option for in-house lawyers and outside counsel for newly freed-up time is to actually spend less time at work.

The amount of work that the average general counsel takes 50 hours per week to complete today would, by lawyers鈥� own estimates, take 46 hours to complete in the future. The time put back into the bucket of available hours could be spent away from work, adding greater balance to the lawyer鈥檚 life. This, in turn, helps to reduce mental duress, burnout, and turnover, ultimately helping the law department manage and retain top talent and saving money.

Further, some of the demands placed on GCs by the realities of their work offer some unique potential benefits for AI as well.

Expanding capacity

The 成人VR视频 Institute鈥檚 annual Legal Department Operations Index has found for several years in a row that, even as legal matter volumes increase for in-house law departments, the majority of in-house teams are experiencing flat or even declining headcount. At the same time, most departments are also seeing flat to declining budgets, so finding ways to add capacity through additional hiring is highly unlikely.

AI may be able to help here, however 鈥� and no, we鈥檙e not talking about robot lawyers. We鈥檙e talking about ways to leverage the lawyer time that AI can free up.

Another way to think of the 4 hours saved by AI per week is that time represents roughly 10% of a 40-hour work week. If that 10% can be turned into increased workload capacity for the average in-house lawyer, each lawyer becomes 10% more productive. As that increased productivity compounds, the collective result starts to look more and more like the output that could be achieved by adding a member to the team.

Sports teams often talk about their fans being the 12th man at the football game or the 6th player on a basketball team. The result of increased capacity from AI is the added workforce equivalent of another player for the in-house legal team.

Now I want to be clear, there is no guarantee that every 10-member law department will now be able to do the work of 11 people, there are simply too many variables 鈥� such as what tech solutions are implemented, how well they are adopted, the type of work the team performs, and of course, how the team chooses to strike the balance between seeking increased work output and pursuing other options.

While each team鈥檚 approach to these variables will differ, the larger point is that the promise of AI creates options that would not have otherwise existed.

While each team鈥檚 approach to these variables will differ, the larger point is that the promise of AI creates options that would not have otherwise existed.

Don鈥檛 underappreciate the potential impact

Bill Gates once famously said: 鈥淲e always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.鈥� With that in mind, I offer up my own example of the potential impact that AI could have on the future for lawyers.

In preparing the Future of Professionals report, we brainstormed ways to communicate the potential impact of the time savings that our surveyed lawyers had estimated. Remember, they estimated 4 hours per week in the first year with AI.

Here鈥檚 my personal favorite analogy for what that time savings could mean.

That 4 hours per week equates to 200 hours per year (assuming two weeks of vacation); and according to the American Bar Association, there were roughly 1.33 million lawyers in the US as of January 2023. That works out to roughly 266 million hours that the legal profession in the United States could save and repurpose in one year thanks to AI.

Now, the Empire State Building took just over one year to build and consumed over 7 million working hours. Using that as our foundation (pun intended), with the potential time savings in one year thanks to AI, lawyers in the US could build approximately 38 Empire State Buildings!

Any way you look at it, lawyers could accomplish some pretty significant undertakings not only with AI, but also thanks to the time it would give back, allowing them to put those hours toward more productive efforts.

You can download a full copy of the听成人VR视频 Future of Professionals report听here.

Traditionally, tax & accounting firms have relied on hourly billing as the primary method for charging clients. However, the report reveals a growing trend towards alternative pricing models such as flat-fee, project-based, value-based, retainer, and market-value pricing. This shift is driven by client demand for more predictable and transparent pricing and the recognition that hourly billing often fails to capture the true value of services provided. Technology is also a contributor of the as most compliance work can now be expedited and automated.

Firms also have experienced success in raising prices across various pricing models. More than 70% of respondents to the survey underlying the report indicated that they had success in raising prices with time-based, project-based, and value-based pricing. Other models, such as flat-fee, hourly, and market-value pricing, also saw success rates approaching 70%. This widespread success suggests that firms are effectively leveraging diverse pricing strategies to enhance their financial performance.

Alternative pricing models and their benefits

Alternative pricing models allow for a multitude of benefits, including:

Predictability for clients 鈥� Flat-fee and project-based pricing offer clients a clear understanding of costs upfront, reducing uncertainty and fostering better financial planning.

Value reflection 鈥� Value-based pricing aligns the cost with the perceived value of the services, allowing firms to charge more accurate fees based on the outcomes and benefits delivered to clients.

More specifically, different types of pricing models can offer various benefits, including:

• • • • • • 鈥� This model assesses the comparative value of services and their impact on the client鈥檚 business, then integrates this estimated value into the proposed pricing. Its benefits include transparency, which allows firms and clients to clearly communicate and collaborate on services offered and how those services will be priced. There are no billing surprises for clients, as they agree upfront on the services and associated fees. In addition, this can allow firms to scale some of their services, reducing their costs even further.
          • 鈥� This model is based upon approximating the time and expense needed to complete a client鈥檚 project. It is all-inclusive and agreed upon with the client before the work begins. Its major benefit is that it simplifies financial planning for both the firm and client; and like value-based pricing, each side knows the exact amount to be paid by the client and what the firm鈥檚 receivable will be, which adds predictability to its cash flow.
          • 鈥� This model features billing clients monthly or annually for a set amount of work. Its benefits include establishing a consistent revenue stream, which makes cash flow more predictable. In addition, it is a way to foster stronger client retention, because clients who are willing to pay monthly or annually are invested in long-term relationship with their firms.

Addressing changing client preferences 鈥� The shift in pricing models is further supported by changing client preferences. Over the past five years, clients have shown a growing preference for flat-fee, project-based, and value-based pricing. This trend reflects clients’ desire for more predictable and transparent pricing structures. And by adopting these models, tax & accounting firms can better meet client expectations and build stronger client relationships.

Timeliness of payments 鈥� Despite the increase in prices, the majority of respondents (78%) in the report said that their clients’ billings are being paid on time. This indicates that clients are accepting the new pricing structures without much pushback and are likely recognizing the value of the services provided. Timely payments also contribute to improved cash flow and financial stability for many firms.

Revenue growth through innovation

Additionally, the adoption of alternative pricing models has positively impacted the revenue of tax & accounting firms. According to the report, more than two-thirds (68%) of respondents said they expect their firms’ revenues to increase over the next 12 months by an average of 21%. In the past year, 72% of respondents reported an average revenue increase of 24%. This demonstrates the effectiveness of new pricing strategies in driving financial growth.

Among firms that have shifted their pricing strategies to better promote growth, many have introduced additional services. In fact, many firms are leaning into high-demand services which are leading to significant growth, according to . For example, 78% of responding firms said they were experiencing revenue growth with state and local taxes as demand remains high. The need for specialized tax planning and advisory services, such as estate/trust/gift tax planning and M&A, is also highlighted as a growth area for tax & accounting firms.

In addition to having strategic pricing models and adding or expanding services offered, tax & accounting firms must make strategic investments to enhance their capabilities to enable the delivery of more comprehensive and value-driven services. Investing in new technologies is at the heart of this transformation. The 成人VR视频 Institute report showed that close to half of firms plan to acquire new technologies over the next 24 months, while the Accounting Today report noted that many firms were citing their acquisition of technology as part of their growth strategy.

Conclusion

By adopting innovative pricing strategies and making strategic investments, tax & accounting firms can continue to thrive in an increasingly competitive market. The shift towards alternative pricing models not only aligns with client preferences for more predictable and transparent costs but also enhances firms’ ability to capture the true value of their services, ensuring sustained financial growth and continued client satisfaction.

You can find more insight into here.

While litigation funding can be essential to unlocking good claims, obtaining funding for this option presents a multitude of challenges. Indeed, the process of securing funding is complex and too often inefficient and riddled with avoidable pitfalls. These difficulties arise because of several factors, including the complexities of litigation funding itself, the opacity of the market, and the unfamiliarity that both lawyers and clients often have in dealing with the process.

Despite this, demand for litigation finance continues to grow with a significant increase in utilization by Am Law 200 firms. Indeed, $2.7 billion was committed to 353 deals in 2023, which were financed through 39 active funders that represented a total of $15.2 billion in assets under management, according to the 鈥淲estfleet Insider: 2023 Litigation Finance Market Report鈥�. Large law firms represented 35% of the new deals, representing $960 million in new commitments, the report showed.

Going forward, we expect an increase in litigation cases this year, and litigation financing will continue to grow along with it.

Navigating the market

Clients often may engage their trial counsel to pursue litigation funding for their case. However, for counsel, this typically is new territory that is not only transactional in nature but also transpires in a niche, unfamiliar market. Even for trial counsel experienced with litigation funding, their knowledge of the market is usually limited and often out of date.

Of the 39 active litigation funders in the US, there are generally three types: dedicated funders that specialize in litigation finance, multi-strategy funders 鈥� usually hedge funds with dedicated litigation finance desks 鈥� and ad hoc funders that occasionally participate in the litigation finance space. Some funders are publicly traded companies while others are privately funded, leading to differing investment criteria and capital deployment pressures. In addition, each funder may have its own unique approach and areas of specialization.

There’s been a 6% increase in legal fees due to the rise of litigation finance

The relatively limited but diverse universe of funders results in a market that tends to be both fluid and opaque at the same time. It鈥檚 very difficult to get information on who the funders are, what size and types of cases they fund, and at what point they might be in their funding cycle (which dictates their risk tolerance and appetite). This makes it challenging to vet them to determine the best fit for a given case, often placing clients and their counsel at a disadvantage in dealing with funders to negotiate a deal. Funders can carefully evaluate a case that鈥檚 brought to them, but on the other side of the table, there鈥檚 very limited information about funders themselves, their preferences, previous deals, their standing relative to competitors, and their current market standards for deals.

The financial aspects

Litigation funding, by its nature, often involves high-stakes cases with large litigation budgets. And due to the non-recourse nature of the funding, underwriting can be laborious and time-consuming. As such, these are complex deals that differ in many ways from standard commercial financing.

When approached thoughtfully with a case ripe for funding, funders will issue a proposed term sheet that sets out the terms of their potential investment. We routinely see dramatic spreads between these proposals, specifically, their return and waterfall structures, or the order in which litigation proceeds will be allocated to the funder, counsel, and client. Unlike other capital markets in which the cost of capital is measured in basis points, litigation funders often seek returns as multiples on invested capital (MOIC) ranging from 1.5x on the lower end to as much as 5x for some matters. At these rates, even relatively small differentials in these multiples can mean variations of millions or even tens of millions of dollars in the cost of capital.

In addition, there are many ways to structure financing deals. The return structure may be an MOIC, percentage returns from the proceeds of the case, or a combination of the two, as well as the inclusion of differing stages and triggers. There may be different waterfall structures or funding schedules, such as tranches based on milestones in the legal process. Some funders require repayment of transaction fees.

All told, the process of vetting these offers can be overwhelming to an inexperienced user, and negotiations with funders can easily end up leaving millions of dollars on the table or saddling clients with high expenses or unnecessary risk. It is essential that clients have a complete understanding of transaction costs, return structures, and payouts, and how the latter will impact what the client will ultimately see from the case proceeds, depending of course, on the outcome of the matter.

Financial modeling can help lawyers and their clients interpret these intricacies to determine the best deal for them. When done right, modeling can provide a comparative analysis of competing term-sheet offers, taking into account the likely outcomes of the case to determine how various proposals will impact the funder, law firm, and most importantly, the client. It can also enable a client to determine the optimal balance of internal and external capital and undergo a cost-benefit analysis relative to the client鈥檚 specific objectives. This can streamline the decision-making process and bolster confidence that the client obtained the best financing deal possible and that all options were thoroughly evaluated.

Navigating the process

In seeking the best terms, a major obstacle is that the market tends to be very opaque 鈥� even among funders themselves 鈥� in terms of pricing and other deal terms, making it difficult to know the current market norms or trends. Because litigation financing investments are non-recourse, they are considered high risk and funders seek a high return often set up under complex structures that can be difficult to understand. All of this complicates knowing how to initially present a case to a funder, what terms to ask for, and what areas on which to potentially push back during negotiations.

Even beyond pricing, there are significant differences among funders on access to capital, preferences for deal structures, as well as critical deal terms such as control. Funders have varying diligence processes for evaluating whether to invest in a case, including methods for reviewing cases, the approval processes, and investment tolerances. Funders can invest in litigation in several different ways, including funding fees and expenses; providing advances for pending claims, judgments, or awards; accelerating payment for law firm receivables; and combining funding with contingent risk litigation insurance. Additionally, financing can be for a single case or for a portfolio of multiple cases.

Because of the cumbersome details involved with diligence, lengthy delays are not uncommon. Any surprises encountered by either side during diligence can only add to the time involved to sort through and address matters as needed. While all of this is going on, most funders require exclusivity when issuing a term sheet, which prevents the client from approaching other funders. If it turns out that the funder is not the right fit, or the terms are not favorable and a deal is not agreed upon, then the process must start all over again. Moreover, approaching the wrong funder can taint a case, raising questions about why other funders previously turned it down. We have seen this impair or even ruin the ability to fund matters that were otherwise worthy on their merits.

Beyond the deal terms

There are other things to consider in addition to securing the most favorable terms. The closing of the financing agreement is in many ways only the beginning of the relationship. Compliance and monitoring are essential for all parties involved to ensure the deal is executed properly and with clear understanding. And the relationship between funder and client is long term 鈥� often lasting for years. As such, it is imperative that clients work with funders that they can trust and are good long-term partners.

Trial counsel frequently assist clients in pursuing funding, but this is generally done as non-billable time. As such, that diverts time and resources that could otherwise be devoted to case preparation. In addition, trial counsel negotiating funding open a potential conflict of interest for the firm: They are negotiating financing that may affect to what degree the firm stands to financially benefit depending on circumstances and case outcomes.

Litigation funding can be an important tool in enabling a case to proceed to trial. However, unless approached correctly, pursuing funding can be a time-consuming, difficult experience. Counsel and their clients should proceed with caution and develop a firm understanding of the market or consider the use of an experienced advisor to help them navigate the process and achieve a successful outcome.

This article was written for Forum magazine by , Counsel and Managing Director of Westfleet Advisors

The 成人VR视频 Institute recently began to wade into this conversation itself, starting the conversation by discussing what AI-enable legal services are not 鈥� specifically, they鈥檙e not equivalent to a photocopy, a long-distance phone call, or a tuna sandwich. However, the idea that the pricing mechanism for legal services will have to change is basically unavoidable.

The legal market largely operates on a labor theory of value, in which the price of a service depends on the hours and resources put into it rather than the value of the outcome to the client. This theory will lead to problems for law firms if they persist in strict adherence to the billable hour.

I recently attended an event with a few hundred managing partners. In a roundtable discussion, one of the partners shared the story of a client who was considering mandating that the partner鈥檚 law firm adopt a specific GenAI-enable technology to replace paralegal hours. The client鈥檚 argument was that it would be good for the firm because they could take the paralegals off their payroll, and it would be good for the client because work could be completed much faster.

It doesn鈥檛 take much examination, however, to see the warning flags for the law firm. First, the hours billed by the paralegals are the high-volume, low-margin revenue engine that largely supports the broader overhead cost structure of the firm. If that revenue disappears, the firm would be hard pressed to find new revenue streams to support its overall operations.

But surely the AI-enabled work would serve as a swap, right? Most likely not, because of the theory of value applied. When the client is looking for work to be completed faster, under a labor theory of value, that also means cheaper. In theory, something that used to take an hour to complete that now takes 0.2 of an hour would also, under the labor theory of value, carry just 20% of the previous cost to the client, meaning 80% less in revenue for the firm.

And therein lies the flaw in the labor theory of value in an evolving AI-driven market. That theory places the onus on inputs rather than the value of the output 鈥� it values time over solutions.

The law firm could, theoretically, leverage its newly acquired tech to ramp up productivity to a point where it would be revenue-neutral; however, overcoming that size of a drop in revenue would mean completely five-times the amount of work. In theory, the firm would have the capacity to do that much work, but without the revenue stream, how could the firm afford to invest enough in new business development to generate that work?

The re-emergence of AFAs

And this is where alternative fee arrangements (AFAs) re-enter the conversation. AFAs burst onto the scene in the era following the Great Financial Crisis and quickly rose to account for roughly 20% of law firm revenue. But AFAs plateaued around 2014 and have stayed largely stagnant since. Now, however, many legal industry experts believe that AFAs are poised for resurgence.

In the 成人VR视频 Institute鈥檚 recent 2024 State of the Corporate Law Department Report, we examined how corporate general counsel have been working to control their costs and found that nearly half of GCs surveyed cited an increasing preference for AFAs. At the same time, many law firms have built up robust teams of experienced professionals to support more creative and profitable AFAs that meet the goals of both law firms and their clients.

I recently attended a meeting of many of these experts hosted by the to ask their cohort a few simple questions. First, there was near universal agreement with my earlier premise that AI is not a cost to be disbursed to clients, but a fundamental change in the technology required to provide legal services. Second, many meeting attendees also agreed that for law firms to remain profitable and protect revenue, a shift to greater use of AFAs for AI-enabled services would be necessary.

That does not mean they鈥檙e advocating for a firms-win/clients-lose outcome. There is broad recognition in the legal industry that the marginal price of a particular matter will likely come down somewhat as AI plays a greater role, providing cost savings to the client in addition to the benefits associated with faster matter resolution. However, arriving at a conclusion faster does not mean that the solution is less valuable. Indeed, in some cases it might be more valuable due to time sensitivity or other factors.

The answer for law firms then becomes a shift away from focusing on the number of hours put into a matter and instead toward the value of the solution provided. Clients can realize marginal per-matter savings, and law firms might realize margin per-matter drops in revenue, but ones that are much easier to overcome through increased capacity than the one potentially faced by the client in my earlier scenario. This is precisely the type of outcome envisioned in the first hypothetical discussed in our 2024 Report on the State of the US Legal Market, that rising tides lift all boats (see page 26 of the report).

The need for law firms to pivot

Law firms that persist in the pursuit of billable hours above all are placing themselves in a precarious position as the market is poised to shift to greater reliance on technology. Indeed, as shown in the aforementioned report, we are in the midst of a nearly uninterrupted 15-year decline in productivity as measured by billable hours per lawyer 鈥� a trend, as I鈥檝e argued before, that is unlikely to reverse.

While the need to move to greater use of AFAs may not yet be acute, it is a looming likelihood on the horizon. Firms that move proactively to define what the transition to AFAs will look like have an opportunity to set the standard and make that value argument to clients first.

The others risk falling into a world in which their revenues continue to be defined by their inputs, putting them at greater risk. These firms could potentially succumb to dramatically diminished revenues because their new technology stack has cut their time of production dramatically; or, if they refuse to implement new technology in the hopes of avoiding that fate, they could very likely lose work to firms that have improved their tech and can now offer clients higher levels of service than those firms can offer.

You can find more on here.

This article was written for Forum magazine by Conrad Everhard and Leonard T. Nuara, Founding Partners of Flatiron Law Group LLP

We are living in the golden age of legal innovation. Not a week goes by without one legal tech start-up or another announcing a big venture capital haul, and large law firms are flooding the zone with messaging about how they are adopting and supporting innovation.

One thing that has not changed, however, is the law firm business model. Traditional law firms keep billing by the hour, increasing their hourly rates 鈥� often at a record pace in some practice areas. If any efficiency is being generated from current innovation initiatives, the cost savings are certainly not being shared with the clients, either through lower rates or through alternative fee arrangements (AFAs).

Indeed, AFAs require a law firm to make two leaps of faith. First, a firm looking to adopt viable AFAs must reimagine the delivery of legal services. Rather than marking up junior labor and selling billable hours the old-fashioned way, law firms would have to figure out how to deliver services at the same level of quality but more efficiently, maximizing profit margin rather than maximizing hours.

Second, firms would have to be willing to share financial risk with the client. All legal work is risky, and some practices, like mergers and acquisitions (M&A), carry acute risks in which negotiating deals can be a lengthy and unpredictable process. Often, the full complexity of a deal does not become known until the parties are deep into their due diligence.

For those law firms willing to make these leaps of faith, recent technology advances coupled with access to cheap computing power are enabling greater automation of many legal tasks, creating more standardized, repeatable processes and greater flexibility in the deployment of counsel. In turn, this opens the door for firms to more readily use AFAs, such as fixed fees for M&A work.

Of course, this pivot requires rethinking the law firm business model and moving away from accumulating billable hours and instead has firms focusing more on impactful inputs and outputs. These impactful inputs are centered more on deploying legal talent when and where it is most needed, rather than maintaining a stable of lawyers who are billing hours. Reimagined outputs focus on both quality and efficiency in closing deals.

Technology as a key enabler

Not surprisingly, technology is a core enabler of these changes. While collaborative workflow tools have become more commonplace in the legal industry, they can do more than simply allowing lawyers to work remotely. When incorporated within a project management framework, they can enable new models of engaging labor that are more akin to a gig economy model 鈥� providing lawyers who have senior-level experience with more agility and flexibility.

Traditional M&A deal flows offer many opportunities to create more efficient workflows.

Similarly, the ability to create bespoke software means many law firms can craft their own technology, including digital deal tools. In the M&A space, there are plenty of contract life cycle management and document management tools out there. Thanks to Moore鈥檚 Law and the rise of SaaS, cheap computing power is now available literally at one鈥檚 fingertips, making it readily accessible to create specialized, proprietary tools with advanced capabilities. It鈥檚 now possible to quickly leapfrog generations of legacy technology and enable new levels of automation.

Traditional M&A deal flows offer many opportunities to create more efficient workflows. The same data is often reused multiple times throughout every step of the deal 鈥� such as in delivering and reviewing due diligence, reviewing representations and warranties, creating and managing schedules, closing checklists, and more. In fact, the process is a constant cycle of reviewing and verifying in which every document is touched four or five times by different people. It is repetitive and time-consuming, and often results in additional charges to the client.

Automation can rationalize and organize this data at every step. Relevant data can be searched quickly with instant status checks and history trails of when a document has been viewed, verified, or modified, and by whom. This can significantly reduce repetitive steps and enable teams to focus on the end goal: delivering the deal as efficiently as possible.

A more flexible labor model

Further, automating and streamlining workflows can make costs more predictable which, in turn, makes use of AFAs more workable as a pricing model.

Adopting AFAs as the default pricing model, instead of just in those cases in which clients insist on it, requires adopting a different mindset. Traditional thinking manages and prices labor to maximize billable hours and labor markup. In contrast, pricing principally with AFAs 鈥� whether fixed fees, fee caps, risk collars, or other methods 鈥� gives firms every incentive to be as efficient as possible, which can benefit both the client and the firm.

Throughout and after the pandemic, many law firms advanced virtual lawyering and acclimated clients to interacting strictly online for certain legal matters. However, beyond enabling remote work, virtual lawyering also enables more flexible models for deploying counsel. With the traditional law firm model, legions of lawyers sit on the balance sheet incurring costs regardless of their utilization. Now, lawyers can be engaged on more of a project management or general contractor model, brought in and assigned as needed to meet the specific needs of each deal.

Automating and streamlining workflows can make costs more predictable which, in turn, makes use of AFAs more workable as a pricing model.

Because large law firms, as a rule, discard senior associates who don鈥檛 show a propensity for generating business, there is an abundant supply of highly trained, artisanal senior lawyers with pedigrees from large, prestigious firms who are readily available and eagerly willing to take on assignments on a project basis. Today, many of those lawyers are hired by ALSPs.

In a sense, labor 鈥� even highly seasoned and experienced counsel 鈥� can become more like a utility that鈥檚 flexibly deployed when and where it鈥檚 needed, but this too requires a mindset shift. This model largely runs contrary to the traditional law firm leverage model, and at the end of the day, a firm doesn鈥檛 make money strictly off its labor 鈥� it makes money off the matter.

Setting a new course, driven by technology

When we founded Flatiron Law Group, we felt the time was right to introduce the elements of this type of model to the legal market within a new firm. Our goal was to create a technology-leveraged firm that applied best practices to close deals more efficiently while maintaining quality. We mapped out a multipronged approach that included fixed fees or AFAs for most matters, a focus on cost control, agile deployment of labor, and a streamlined workflow process. Ultimately, our goal was to deliver high-quality work that exceeded client expectations.

Fixed fees would be integral in offering high-quality deal work with the predictable, value-based pricing that clients want. This introduces an elevated level of financial risk, not deal risk, for the firm, but managing deal work almost as a banker would, with deposits, progress payments, breakup fees and so on, makes the financial risks of AFAs manageable. It also means potential upside for the firm depending on how well each deal is managed.

Fixed fees would be integral in offering high-quality deal work with the predictable, value-based pricing that clients want.

We took a clean-sheet approach to reengineering and streamlining workflows. And because we knew technology would be key to enabling better data and decision-making in the deal flow, we took the step of building our own platform for extracting, processing, and delivering the reams of data needed to close a deal, as well as finding and pulling the right clauses when needed. For example, we recently closed a deal that involved more than 600 individual diligence requests. Doing that task manually would have required a lot of people going through a lot of boxes of materials multiple times. Instead, now we could enter a few search terms and answer requests in minutes instead of weeks.

Further, we鈥檝e now spun out our software, which we call 鈥淒eal Driver,鈥� into a separate company to complete its development as a commercial platform. Our vision is to eventually automate the entire M&A deal process from start to finish.

So far, we鈥檝e successfully completed more than 20 deals in the last four years at lower cost while providing the quality level that clients expect 鈥� and we have done it all while maintaining healthy profit margins. Also, our model is scalable and replicable for other practices. There鈥檚 no reason it couldn鈥檛 be applied to real estate, commercial lending, venture capital, project finance, and even litigation work.

While managing deals is professionally satisfying, at the end of the day, it鈥檚 about reinventing the law firm space. Disruptive innovation is possible with the right drive and commitment, and it can be a win-win for everyone: the firm, lawyers, and clients.

Real change only comes when it鈥檚 driven by the market 鈥� and today, the market is ready to move the industry in a direction that encourages greater use of AFAs for M&A as well as other legal work.

You can access the interactive Spring 2024 issue of the 成人VR视频 Institute鈥檚听.