Legal News and Views -  Asia Pacific and Beyond

by Neil Cameron of the Neil Cameron Consulting Group

Well the ABS race is on. In just a fortnight we have had Silverbeck Rymer and Russell Jones & Walker start on the road to become ABSs. Neither is doing it for themselves; they are both subject to takeover - one domestic, and one foreign. Silverbeck Rymer is being taken over by Quindell Portfolio in an £20m example or vertical market integration, and RJW by Australian market pioneers Slater & Gordon in a horizontal integration move worth £54m.

In The Times newspaper Tina Williams of Fox Williams is quoted as saying “This deal is a real wake-up call to law firms that expected to have years to adapt to a changing market”. I could not agree more.

Over the past few years firms UK general have had one of three reactions to the Legal Services Act and the creation of the ABS:
• they have ignored the whole phenomenon hoping it might go away;
• they have half-heartedly flirted with the concept;
• they have determinedly examined the options, and readied themselves for a move – like Irwin Mitchell and Duncan Lewis.

But there are many routes to forming an ABS; one is by an established law firm on its own initiative, one is a new start-up with new capital, and one is the investment of external capital in an established law firm. For a more detailed examination of the consequences of these options see our ‘Flirting with Floating’ article.

Quietly, in the background capital-rich organisations have been circling around the market like lions drawn to fresh young meat. Some in a blaze of self-publicity – such as Lyceum Capital – and others more stealthily like Investec. Other established enterprises that believe they can expand into this market have also been examining their options – like the Co-Op.

No-one could have predicted which way this was going to pan out, or predict accurately what will happen next – the law of unintended consequences makes sure of that. But now all bets are off, and I think we are going to be amazed at how quickly things move – especially in the high-volume consumer law areas such as personal injury and similar work.

Like all the girls at the teen-age dance, even if you don’t really want to dance neither do you want to be the last left standing at the end of the evening with the other no-hopers with no-one to partner up with. Make no mistake, Slater & Gordon is mopping up the Australian market for their target work – buying up firms and building a brand that attracts potential clients at the expense of other competitors. That is exactly what they want to do here – and who is going to stop them?

Any law firm reliant upon any degree of such business must now determine what it will do to counter the threat. They must either:

• launch a highly attractive and competitive service to the new sleek enterprises – which will require a heavy investment in marketing and systems. Few firms can afford to do this;

• undertake their own IPO and hope that the market will find them attractive enough, and then use the capital raised to invest in marketing and systems. This will take time;

• throw themselves under the feet of one of the new entrants – the estimated RJW partner bung of £2m will be attractive here, although that sum per partner will continually reduce as less attractive firms come forward desperately competing for involvement;

• find a new business partner with which to form an ABS – again, this will end up being a cut-throat beauty parade – and quicker than any of us think;

• wind up the firm and retire.

Best of luck guys…

Over here in New York, one of the technology trends that can no longer be ignored is the rise and rise of the Apple platform. In one of the conference sessions at this year's LegalTech, the sentiment from the floor was that the Apple iPad was now the device of choice for attorneys of all ages. Elsewhere, we could see the growing interest in the iPhone as an alternative to the digital recorder. And we encountered ediscovery vendors who are now developing a niche line of business dealing with data collections from Apple Macs.

Echoing these sentiments, Forrester Research is now predicting that "Windows dominance is at an end." To back up this prediction, Forrester has released figures showing that the number of companies in North America and Europe issuing Apple Macs running OSX increased from 30% in 2009 to 46% in 2011. Other key facts include...

* in a survey of 10,000 employees worldwide, 8% were using Macs, 9% were using iPads and 11% were using iPhones

* 30% of businesses support Macs, 27% support iPads and 37% support iPhones

* Apple users are likely to be younger or higher up the corporate ladder than Windows users: 41% of Apple users are directors, 43% earn more than $150,000 a year and 28% were between 18 and 24.

Peppermint Technology has just announced the appointment of David Thorpe as Director of Business Development, he starts work there on Monday.

Arlene Adams, Peppermint Technology CEO, comments: "David brings a wealth of market experience and knowledge to Peppermint. His appointment reflects the influx of demand we are seeing for the Peppermint Platform. A highly experienced player in the UK Legal market, David was quick to recognise the unique value of the Peppermint Platform that brings together applications, content, collaborative working and transactions in one single system."

Thorpe comments "I have spent the last 30 years helping law firms become more efficient. Arguably, law firms today face a bigger challenge now than at any time over that 30 year period: There is a global recession; there is more competition for business; there are ABSs entering the market and more and more clients are demanding Alternative Fee Arrangements (AFAs) and other billing variants from their law firms.

“Traditional legal software products are designed to focus on the back office. While this is important and is something that the Peppermint Platform delivers very well, the real value of Peppermint is how it enables legal providers to transform the client experience.  The Platform recognises the power of data and connects together data, applications, people and process in one system centred round a single client profile. The result is transformational. By using the Platform legal providers can start to offer clients an ‘Amazon-like’ experience in legal services.  

"This is the first platform I've ever seen with this focus and it's revelatory. Of course efficiency and cost cutting is important but that will inevitably lead to a dead end; someone somewhere will always find a way to provide the work at a lower cost. By adding value to the experience of the client, law firms using the Peppermint Platform have a USP which doesn't depend on forever finding cheaper delivery options. It's been a long time since I was as excited by a software proposition as I am about Peppermint. I am really looking forward to taking the message to the market and working with the outstanding team at Peppermint."

Comment: Thorpe told us a few minutes ago that the Peppermint Platform was the most exciting legal IT system he had seen since Elite in 1993. He added that people forget how back then Elite – now the firmly entrenched market leader – was also seen as a novelty and not regarded as serious competition to the likes of the Miles 33, John Hemmings and Digital Kienzle (later Axxia) systems that then dominated the larger firms market.

Adams added that David's experience in the larger firms sector was also an attractive proposition for Peppermint as they were now attracting the interest of 500+ user firms.

So, Thorpe has joined Peppermint. All those vendors who have been trying to ignore the potential threat represented by Peppermint may need to reassess their ideas now.

• Arlene Adams will be speaking at the LawTech Futures event in London in March www.lawtechfutures.com

After the alarms and excursions of earlier today and getting out the latest issue of the Insider newsletter, here are a couple of gentler topics...

• First off LiliConnect (the legal IT networking group) are holding another evening meeting – this time on the 9th February at the Andaz Hotel near Liverpool Street Station – when the guest speaker is India Gary-Martin, the MD & COO (Technology & Operations) at JP Morgan. Full details on the attached PDF.



• Secondly, we don't know why he has a blue ball on top of his head but David Thorpe is off running the London Marathon again this year on 22nd April, this time to raise money for the Make-A-Wish Foundation charity for sick children. Please sponsor/make a donation – and be generous as you know it will take David until June to recover!

http://uk.virginmoneygiving.com/fundraiser-web/fundraiser/showFundraiserProfilePage.action?userUrl=torchy

The January (issue #249) of the Legal Technology Insider newsletter has gone out now – print copies should be arriving in the post while the digital edition has just been sent using our new NewZapp edistribution service.

Top stories include...
• IRIS Legal to focus on three inhouse centres of excellence
• Weightmans 'exploring' LexisNexis ERP offering
• BLM iManage order upsets Sharepoint fans
• Scottish & English Law Societies offer guidance on social media & cloud technology
• Total buys K-Cloud
• There's a new chef in the Workshare kitchen who can cook !

Our next issue is out on 23rd February (probably!)