Professor Richard Moorhead, Cardiff Law School
Science meets the art of law
27 February 2012
2 May 2014
30 June 2014
7 July 2014
30 January 2014
23 June 2014
Alternative structures such as Riverview could spark true innovation in the legal industry
There’s been a blizzard alright. There have been a few big alternative business structure (ABS) stories recently and Riverview is up there with them. Riverview’s newsworthiness stems from three things: the involvement of a big corporate firm; the opening up of a business law-orientated ABS to fixed fees; and the involvement of barristers as a distinguishing factor.
In truth, many of the ideas behind the Riverview approach are not that new. Systemised, low-overhead delivery is far from conventional, but it is not unknown. Neither is outsourcing some aspects of corporate work.
We cannot yet judge how radical any re-engineering of the service will be. Slicker, more informative pro-cesses and IT front-ends will help impress clients and service them more cheaply, but this is some way from the radical reconceptualisation of law that commentator Richard Susskind predicts.
Riverview is, though, an important step along the road to transformed legal services. Fixed pricing is crucial. This stimulates competition, of course, but also promises to tap into latent demand. The assumption is that smaller businesses need or will benefit from advice, but need to understand the costs - and benefits - of that advice to be persuaded to buy. Fixed fees will bring in more work and compensate for lower margins, or so the theory goes.
The important thing is that this involves a change of mindset. Traditionally, lawyers have been able to shift some or all of the risk involved in cases back onto clients. Clients can and do negotiate some risk-sharing, but shifting risk to clients dominates how lawyers manage their services.
A fully fixed-price firm has to manage those risks, bear some of the fluctuations in the resources that jobs take and make costs as predictable as possible. This requires volume work to smooth the risk and a great deal of managerial nous to minimise it.
Such systemised, high-volume practices are denigrated by the profession as ’factories’. I do not share the assumption that systemisation leads to poor quality. There are risks: a bad system is more dangerous than one incompetent solicitor for example, and systemised firms can shift risk back onto clients by taking chances with quality or contractual limitations that push work outside fixed or contingency fees.
By involving barristers, Riverview has sent out a signal about the quality of its services. Whether this is much different to normal firms with preferred lists of barristers is somewhat beside the point; the idea of expertise is wedded to the brand.
What might come next from Riverview will be really interesting. Can it develop to a size whereby it is worth investing in accelerated service development and more profound innovation? Rather than ask ’how do we deliver a contract of type X as quickly as possible?’, will it be better able to understand what a good contract of type X looks like?
Monitoring and development of service could evolve beyond customer satisfaction surveys and professional intuitions. Lawyers may become more understanding of how law works, rather than how they work the law. There may be more science mixed in with the lawyer’s art. And then the innovation might really start. Riverview is a well-conceived step, but in terms of innovation it may be just the first of many.