‘I despise the billable hour,’ says William Woodford, a former partner at leading IP firm Fish & Richardson, ‘it taints the relationship with the client.’
Woodford (pictured above) has now left the Big Law firm he worked at for over 18 years to create his own niche outfit focused on IP litigation, Avantech Law. And he is determined to work differently. ‘I am interested in anything that takes down the status quo,’ he adds.
Those differences can be broadly grouped into three main areas: dumping the billable hour; more use and better use of technology when possible; and operating with far lower overheads.
First, moving beyond the time-based legal economy. Woodford explains on the call from Minneapolis that the billable hour just ‘doesn’t resonate’ with his client base of entrepreneurial companies.
Moreover, many are tech-focused businesses and the idea that a short legal input could cost them ‘$1,000 or maybe $10,000, but the lawyer doesn’t really know which’ sits very uncomfortably with them.
Or, as Woodford notes: ‘No other industry does this.’
He adds that a key aspect to his work is that many of his clients are still at a stage where they don’t have an inhouse legal team and so he is working directly with the founders of the company. This close contact demands business savvy approaches to solving their legal problems.
And this, Woodford stresses is the key problem with Big Law, i.e. that it’s lawyers dealing with other lawyers, not the real client, i.e. not the actual leaders and owners of the business.
‘Most in-house counsel grew up in law firms and so are used to the Big Law model. They are not true business people,’ he states.
(And to be fair some are, but it’s certainly not the norm.)
So, how is he doing things differently? The answer is that he has grasped the time-based bull by the horns and done something about it. Woodford has mapped out what things should cost, and it’s taken him years to gather the data.
He explains that while he was at Fish & Richardson he was constantly developing a data-driven picture of what legal matters should cost. He was also on the firm’s Finance Committee, so he has a hands-on understanding of the business of law.
He’s developed fixed prices for much of what he does and now says on the website of his new business – Avantech Law: ‘Don’t let unpredictable legal fees stop you from taking the first step to protecting your innovation. No matter what your financial goals, we want to help.’ As you can see, he also offers subscription fees, along with more regular contingent fees and support for litigation finance.
He also weighs in on the idea that creating fixed fees is too difficult for lawyers to do, that it’s too complex.
‘All law firms have a record of what everyone has done every six minutes, along with great descriptions.
‘No other business has this much data about its own products, but which is never used to change how fees are structured,’ he states.
And it’s hard to argue with that. Law firms are meticulous about collecting billing data. Yet if you need help then ‘law firms still have a problem saying what something will cost, even though they have the data’.
One last point here is the constant inflation of the price of billable hours. Because law firms are selling time the client just keeps getting bigger bills as the hourly rates tick upwards, even if the legal output remains the same and may have been performed a hundred times before in the same way for that client. (And the salary war to keep people at firms where the hours are very high has also not helped, as firms push up rates to keep control of their margins.)
Ultimately Big Law becomes unaffordable to all but the largest companies – which – dah-dah….use lawyers to purchase those external legal services, (who in turn grew up inside Big Law firms). So, a large chunk of all companies are left out basically because of a business model and culture that is self-perpetuating.
But, moving on. Now to legal tech.
Woodford notes that the central problem with large law firms, at least as he is sees it in the US, is that they bought their tech infrastructure many years ago, are now totally dependent upon it, and are loath to change it, even though it really needs a complete overhaul.
‘Law firms are scared to move away from the legacy tech that they have,’ he adds.
Also, that old tech backbone is very hard to adapt to new needs. He notes that sometimes firms are forced to add on new bits and pieces, but it’s a messy process and doesn’t work well. In short, they are stuck.
‘I have been able to start fresh with the latest tech,’ he says and explains that he is using Filevine, a case management platform, to help run his new niche firm. He points out that it’s very flexible and allows him to build the workflows he wants.
And other legal tech? The simple answer is: he’s looking and he’s up for it. His new business launched in April last year, so this is still early days, but overall he explains that his philosophy primes him to welcome legal tech solutions.
‘If you want to keep your profit margin then you need to invest in tech. Then you can focus on high level tasks. Law firms should focus on where tech cannot help,’ he says.
I.e. use tech to soak up the process work, then use all that experience and know-how you’ve gained over many years to really add value.
And finally, the new business model. With the pandemic’s WFH experience now the norm, what Woodford proposes seems entirely normal. At present he is a solo – but is open to bringing aboard others. But that’s not the key point. The point is that he has cut away the high leverage, the big office, the costly support services, and works with very low overheads.
He also works in close collaboration with other lawyers around the country who are either taking a similar approach or are still in Big Law. Either way, he doesn’t carry the costs.
When asked about how the money side of things is going, he says that he’s doing just as well as when he was a partner in Big Law. That’s understandable, as his operating costs must be a fraction of what they were before.
Also, one way he increases his reach is by working through platforms such as Kula, which as the company explains: ‘We are Shopify for law firms: we automate business back office operations for innovative firms, starting with business development.’
This site then asks him about professional insurance, which can sometimes be a burden for smaller firms. Woodford replies that it may be a little bit higher than when he was at Fish & Richardson, but it’s really not a noticeable item for him.
All in all, Woodford shows that you can prosper outside of Big Law. Of course, his client base very much supports how he works because they are businesses at a growth stage, run by their founders, and so they appreciate working with someone else who is also entrepreneurial. This approach may not be so easy if your clients are Fortune 500 giants – although, that said, for many of their needs, why not use lawyers who work like this?
Either way, when someone who has spent a large part of their career as a partner in a Big Law firm states they are looking to change the status quo, then you have to take notice.
Good luck to him and the many others around the world taking a different approach.