London Insider

FirstLAW Hits the Ground Running

by Charles Christian

THE OIL AND energy group Burmah Castrol has become the latest major commercial client to sign up with the FirstLAW online legal services exchange. Since its February launch, FirstLAW, which is regulated as a solicitors practice by the English Law Society, has formed referral and fee sharing relationships with more than 80 law firms, including Linklaters and Allen & Overy from the City of London's so-called "magic circle" top five law firms.

FirstLAW's business model is, effectively, to be an e-Bay for legal services by offering an auction site that allows law firms to submit competitive bids in order to win work from prospective clients. (In the United States a number of organizations, including eLawForum.com and Altman Weil's "lawyer brokering" iBidLaw.com, are planning similar services.) Where however FirstLAW stands out from the crowd in the U.K. is that by being a fully-constituted, Law Society-certified and regulated, professional-indemnity insured legal practice, it is allowed to enter into fee-sharing deals with other law firms.

Firm IT head Rips into U.K. Suppliers

IN A PRESENTATION at a recent conference Daniel Pollick, IT director at DLA (one of the U.K.'s major regional law firms, previously known as Dibb Lupton Alsop), criticized legal technology suppliers for the poor quality of their products and services. While conceding there were exceptions, Pollick said the majority of suppliers were "woeful," with too many "Mom and Pop" companies" having a "doubtful record" on the delivery and realizable benefits of the products they sold.

Pollick admitted lawyers often only had themselves to blame as their ignorance of technology meant suppliers "had it easy" with the result that users could be "blown along by more technology crazes than Toys 'R' Us". Pollick believes the "culture of secrecy" within law firms means they never talk to each other about common issues, and he went on to say DLA is now planning to exchange information with the IT directors of two other large out-of-London law firms to see if they could start to put pressure on IT suppliers to improve their standards.

Suppliers Call for Change in IIT Process

AT ITS RECENT council meeting, members of the U.K.'s influential Legal Software Suppliers Association (LSSA) called on legal IT consultants to change the timing of the ITT (invitation to tender) cycle so ITT questionnaires are issued after short listing rather than, as at present, at the start of the selection process. LSSA vice-chairman Alan Richardson said moving ITTs to a later stage would provide suppliers with an opportunity to meet with customers and so gain a clearer picture of what they were looking for, whether it was a project the supplier really wanted to tender for and which aspects of a supplier's system should be highlighted in an ITT response.

Big Money in Legal Management

IT'S NOW ALMOST accepted wisdom that the development of legal e-business projects should not be left to lawyers alone, but instead be the product of joint initiatives involving lawyers, IT specialists and marketeers. So it was excellent timing when the QD Legal recruitment group recently published its annual report on the pay rates currently being earned by legal sector management staff, including marketing and IT directors.

The survey found that in 1999 the highest figure being paid (all figures have been convered into US dollars) to the marketing director of a major (60 partner +) City of London firm was $300,000 per year -- although the average for London firms was nearer to $100,000 fro marketing directors, falling to $30,000 for marketing assistants.

Out of London -- and there were big regional differences -- the average for a director was nearer $65,000 per year, while marketing assistants could earn as little as $12,000.

On the IT front, the highest salary recorded for an IT director in a major City firm was $175,000, with an average for 60 partner + firms of around $130,000. The lowest salary recorded for a London IT director was just $50,000 -- which is actually less than some support desk and support analysts were earning in larger firms.

Outside of London, pay levels plummeted, with $60,000 apparently the average going rate for an IT director. Among the regions, Scotland consistently paid the highest rates although the Midlands was the exception that proved the rule, with both the highest out-of-London salary ($150,000) and the lowest -- a truly abysmal why-bother-getting-out-of-bed $25,000/year. Less senior staff fared equally poorly, with help desk staff on as little as $10,000.

Web Lip Service

DELIVERING A keynote speech at the recent LegalTech London conference, Richard Susskind, the U.K.'s best known legal IT guru, warned that while law firm senior partners were making all the right noises about the Internet, most were terrified by the concept of online legal services and few were making any serious commitment in terms of resources.

Susskind reckons that only 5 percent of law firm IT expenditure currently goes on e-commerce projects, with the remainder still being spent on traditional back office systems. Susskind says a big problem for many firms is how to encourage the right entrepreneurial spirit.

This view was echoed by another of the speakers at the event, Elizabeth Broderick, who heads Blake Dawson Waldron's legal technology group in Australia. Conceding that the traditional law firm fee earning mindset was a major factor in holding back the development of online legal services, Broderick noted that othe partners' attitudes soon changed once new ventures showed themselves to be profitable. "Money talks," she said. In Broderick's own case the legal technology group is the most profitable part of the firm, enjoying a profit ratio about six times greater than any other division. This, she added, is partly due to the fact e-commerce services operating on a 24/7 basis allow you "to make money while you sleep".

Despite concerns about "cannibalization" -- will legal e-commerce services generate new revenues or merely take existing work from other traditional parts of a law firm -- Broderick's view is that Internet-delivered law is not an adjunct to conventional legal practice but a service in its own right that could soon become the dominant aspect of legal service delivery.

Editor's note: As the American Bar Association prepares to host its Annual Meeting 2000 in London this month (July 15-20), we launch a new column, "London Insider," in which our U.K. correspondent, Charles Christian, will report frequently on the latest tech trends abroad.