TBA Law Blog

Posted by: Benjamin Barton on Mar 1, 2018

Journal Issue Date: Mar 2018

Journal Name: March 2018 - Vol. 54, No. 3

New Ideas for Private Law Practice

Our traditional lawyer business models are very, very old. How old? Solo practitioners have been selling a blend of legal services by the hour or by the matter since before our country was founded. If you read Jean Edward Smith’s exceptional biography of John Marshall or Ron Chernow’s masterwork on Alexander Hamilton, you know that many of our founding fathers were practicing lawyers first and foremost, with a heavy emphasis on “practicing.” Hamilton, Marshall, Aaron Burr and others tried cases (including murder cases), handled transactional matters, and generally hustled up a living as a lawyer in a way that any Tennessee solo practitioner would recognize today.

Our second oldest model, partnerships aimed at serving corporate clients, is only slightly younger. Cravath, Swain & Moore was founded in 1819, and developed the “Cravath System” that has served as the basic DNA for corporate law firms (so called “BigLaw”) ever since. Since the 19th century the private practice of law has been based upon some version of two basic business models — what I call “main street lawyers,” solo practice or small firm lawyers who work for individuals and small businesses, and BigLaw firms staffed by partners and associates offering services to larger and wealthier clients. Both of these models have mostly sold their services by the hour.

But, just when you think things are settled, disruption and new models arrive. This article briefly presents three alternate models for the private practice of law by profiling three of our state’s great legal pioneers: Kevin Hartley of Trust Tree Legal, Jane Allen of Counsel on Call, and Haseeb Qureshi of the Morehous Legal Group. Each of them offers a new and distinct way to practice law, utilizing technology, new skills, and elbow grease along the way. All three love being lawyers and creating their own jobs.

Kevin Hartley

Kevin Hartley, Bill Ferrell and Randy Michels left a Nashville BigLaw firm to found Trust Tree Legal in 2015, offering trademark and other intellectual property services, primarily on a fixed fee basis through their website. From the outset, they envisioned a completely new model of legal work.

A phot of Kevin Hartley sporting sunglasses.
Kevin Hartley: “The billable hour had to go.” Photo by Rich Kalonick.

Kevin tells the story best: “When we launched Trust Tree Legal, we shed all of our preconceived notions about how a law firm should operate. Instead, we asked, ‘How would a regular business operate if it were providing legal services?’ We created a traditional business plan, complete with market analysis, competitor assessment and growth opportunities. We looked at how customers were buying legal services in our particular area of practice — trademark law — and identified what needs were not being met by the current market. Then, we built every aspect of our firm to meet those needs, leveraging new technology. Our business structure, our business practices, our pricing, our pay structure, our branding and marketing, and every other thing about our business has been designed to meet our clients’ needs. We are constantly adjusting and changing with one goal in mind: to provide the highest quality legal services at the lowest possible price.”

This process of rethinking the law firm from the ground up led to a couple of simple, but foundation-shaking, changes. First, the billable hour had to go. Lawyers are among the very last holdouts in selling their services by the hour, instead of by the task, and Trust Tree decided to take the leap and move to a 100-percent-fee-for-service model.

“At Trust Tree,” he points out, “we’ve eliminated the billable hour and use technology to reduce overhead and increase productivity. We don’t sell hours. We sell legal services. Whether it’s litigation or transactional, our clients pay an agreed upon price for a specific legal service. It’s up to us to figure out how to make a profit at the agreed upon price.”

For three former BigLaw lawyers the transition was hard, but totally worth it. “Eliminating the billable hour and focusing on technology to make practice more efficient has a positive cascading effect,” Kevin argues. “For clients, we can lower our prices. We can dedicate more time to customer service. For our employees, we can reduce the time and resources needed to perform a legal service. As a result, we can deliver higher quality legal services at a higher volume and at a fraction of the price — with higher profitability.”

Second, integrating technology into every aspect of the business, including business generation, meant that Trust Tree could build its business around data analysis in a way that few traditional law firms do.

“Law firms need real business plans driven by real data,” Kevin says. “Law firms need to know who their clients are, where they are, what they need and how they want legal services provided. Simply ‘taking people to lunch’ is not enough.”

Standardizing how clients engage Trust Tree, finding which services sell more briskly than others, and following up explicitly and thoughtfully about client experiences allow Trust Tree to get a much more data-rich look at their practice. Who visits their website? How do they get there? Which services sell better than others? Which services are most profitable and why? Which services or client types require an inordinate amount of attorney energy or time? Are there ways to automate some portions of those tasks without losing a personal touch? Running everything through technology (like a “real” business) allows Kevin and his compatriots to answer each of these questions much more accurately than traditional law firms, and all in real time.

Last, Trust Tree focused on branding from the very outset. Take a look at its website and you’ll see it in a minute. Rather than the traditional lawyer bios, Trust Tree’s “About” page features three casually dressed lawyers with funny bios, one CPA and two adorable dogs. For example, “Brady” is described as “a purebred Labrador Retriever and Chief Playtime Officer.”

Kevin explains Trust Trees’ approach: “Lawyers are notoriously bad at committing to a position, but branding is the easiest way to ensure loyalty through a consistent client experience. Every firm claims to have great lawyers and great service at a great value. By trying to appeal to everyone, they appeal to no one.” He knows this approach has downsides. “The trade-off is that great branding will almost always alienate some clients. But if you have studied the market correctly, your branding will only alienate the clients you have no intention of serving. On the other hand, your intended market segment will have an easier time finding you and become intensely loyal.”

So far, the returns have been strong and Trust Tree has seen growth in revenue, profits, and, to hear Kevin say it, fun. “Aside from all of the business benefits of running our firm as a modern, technology-driven business, there are immeasurable psychological benefits. It is super fun to be an entrepreneur and run your own business your own way! Too many lawyers dread the business part of the job: hourly billing, collecting from clients, business development. At Trust Tree we’ve abandoned the old way of doing things, and now tasks that others hate are among our favorites.”

Jane Allen

Jane Allen is another former Nashville BigLaw attorney who chose entrepreneurship over a more traditional route. In 2000, Jane saw many of her talented female colleagues leaving the practice, forced to make a choice between the profession they loved and raising a family, or taking care of a loved one. Simultaneously, she saw firms struggling with hiring expensive associates and controlling the bills sent to clients.

“I felt there should be a better way,” Jane says. “I was very fortunate that the partners in my firm were forward thinking and supported my initiatives. Eventually, though, those initiatives became a new company.”

A photo of Jane Allen in front of Counsel on Call sign.
Jane Allen founded Counsel On Call because she felt there should be a “better way”?to practice law. Photo by David Mudd.

That’s when Counsel On Call was born. The company was started to provide experienced and talented attorneys to law firms on an as-needed basis. Law firms, with their variable client base but static hiring base, needed access to the same quality talent a lawyer would want to hire on a permanent basis, but on a flexible basis. Counsel On Call eventually started working with in-house lawyers as well.

“The philosophy was always that Counsel On Call could provide talented lawyers with options: options in the way they could practice, and options in the way they could hire attorneys,” Jane says. “Good lawyers ultimately want to work with good lawyers, and that was our starting point to building a different model.”

“It did not take long for us to have really talented attorneys wanting to practice in a different way,” Jane continues. “They enjoyed the practice of law but not necessarily all the things that traditionally comes with the practice, such as billable hour requirement, having to climb the partnership track or bringing in business. And with that talent on our team, both corporations and law firms embraced the concept.”

By 2007, with the exponential growth of electronic data and the ensuing struggle to manage the volume of documents involved in cases, a clear opportunity existed to bring efficiency, quality control, and cost savings to eDiscovery. That was when Counsel On Call founded its Managed Services Division (MSD).

“Fitting with our existing model, we had great attorneys who understood the intricacies of litigation; we saw how many large-data cases were being handled, more of a silo-approach, and knew we could improve to better serve our clients and our attorneys,” she says. “We saw the need for a core team of attorneys dedicated to one client, repeatable process implemented by effective team leaders/project managers, embracing and maximizing the best technology available, clear lines of communication and training to avoid duplication of work — a true collaborative approach. Our Managed Services Division was built to solve these challenges.”

Initially most of the MSD’s work was on eDiscovery matters, and Counsel On Call quickly became an expert in the rapidly growing legal technology marketplace — even being one of the first companies to deploy predictive coding on a significant matter in 2011. The use of technology with skilled attorneys led to more transparency in understanding specific roles and costs on a matter, and being able to better predict those costs as well as timelines and clients gained more control of their matters.

The eDiscovery “disaggregation” method is now utilized by Counsel On Call in many other substantive areas, such as due diligence, compliance and contract review and management.

“Our MSD attorneys have experience maximizing technology as well as in the substantive practice areas in which they work,” Jane notes. “We have great project managers who lead expansive processes as well as the people engaged in them. It takes clear communication both internally and externally. And they have to get the most out of the technology to get to the important data as efficiently as possible. These principles haven’t traditionally been foundational skills in the legal world, but that’s what we have done for more than ten years and continue to be focused on today — always striving for continuous improvements.”

“We are in an exciting time in our profession. There is a blending of effective business principles, technology and legal knowledge — it really benefits all involved, especially the ultimate client.”

Haseeb Qureshi

A phot of Haseeb Qureshi outdoors
Haseeb Qureshi: “To some entrepreneurs, visits with the lawyer can seem like a depressing trip to Dr. No. But it doesn’t have to be that way!” Photo by Mark Lilly.

Haseeb Qureshi went the other way, from life as an entrepreneur into working for a boutique corporate law firm, Knoxville’s Morehous Legal Group. Not as a lawyer, per se, but as an “Entrepreneur in Residence” (EIR). EIR is one of those new economy jobs you have probably never heard of. Venture capital firms will often hire a successful entrepreneur to help them choose which projects to fund and what advice/help to offer those projects to make them successful. EIRs offer a special expertise and perspective, having physically done the thing they are asking other start-ups to do. Business schools and law firms have followed suit, hiring EIRs to help translate the thought-process and experience of starting a new economy business.

Enter Haseeb. He has worked for recording studios and managed musical artists. He has run his own coding company, including helping to redesign the website for the City of Knoxville. He teaches entrepreneurship through the Knoxville Chamber and mentors people starting businesses through the Knoxville Entrepreneur Center. He is the CEO and co-founder of Audiohand, an innovative mobile phone app that allows multiple smartphones to work together to record live music. His experiences are who he is: an all-around hustler.

The EIR position with Mourhous Legal is set up to play to these strengths. Haseeb works on several fronts. Most obviously, he works on business development. Haseeb is out meeting with fellow entrepreneurs and other new-economy types every day, and he is thus in a unique position to spot legal needs and pitch legal services.

The job is much more than business development though. Haseeb also serves as a translator between two groups that often do not speak the same language.

“Entrepreneurs are natural risk-takers,” Haseeb says. “And good lawyers are naturally risk averse. Entrepreneurs succeed by plowing through risks, while lawyers thrive by recognizing risks and nipping them in the bud. To some entrepreneurs, visits with the lawyer can seem like a depressing trip to see Dr. No. But it doesn’t have to be that way!”

Haseeb’s job is to bridge the gap. He explains to clients that the risks raised by lawyers are real, but profitably addressable. “I make the entrepreneurs see that working with competent lawyers, and in a partnership from the beginning, is a massive value add. Rather than spending a fortune to unwind legal errors later, we can address them up front for a fraction of the price. And good legal advice is also good business advice,” Haseeb argues. “I can do the same in talking to the lawyers. It can be frustrating to work with risk-loving entrepreneurs, and the lawyers have to understand the mindset to properly serve these startups.” Haseeb also serves as a liaison between the firms’ many entrepreneurial clients, finding space for synergy or teaming up among them.

“The main point is to bring an entrepreneur’s spirit to the work of a boutique law firm. I am a proud UT Law grad and a licensed lawyer who understands that side of the business, but I’m also a lifelong entrepreneur who relishes talking to and advising other startups. The EIR job is the perfect blend of law and hustle, and I love it.”

Ben Barton BEN BARTON is the Helen and Charles Lockett Distinguished Professor of Law at the University of Tennessee College of Law, and a national voice on the evolution of legal technology.