Counsel services

Axiom’s business model of sourcing contract lawyers to corporations has been a hit with clients, but it still needs to tweak its offering

John Miller
John Miller

Housed in a former Hammond & Champness lift factory in London’s trendy Clerkenwell, Axiom Law trumpets itself unashamedly as a law firm with a difference.

The firm was founded 11 years ago in New York by former Davis Polk & Wardwell associate Mark Harris. From the start Axiom set out its stall to offer an alternative to what Harris saw as the “broken” law firm model. By creating a bank of top-flight lawyers and farming them out individually to in-house departments at a fraction of biglaw’s rates, traditional it is not.

Personality dash

Axiom’s London offices reflect its ­personality perfectly. It is close enough to the City and nearby ­Aldersgate Street’s lawyerly ambience to imbibe some gravitas, yet the vintage lift, loft-style office and trendy neighbours (the firm shares the building with a communications company and social research agency) are ’Soho’ enough to be edgy.

According to London-based general ­manager Al Giles, this firmwide ­persona is embodied in every one of Axiom’s lawyers, something that makes the recruitment process the true cornerstone of the business. So much so that it has set up its own recruitment consultancy within its London office to ensure that everyone it takes on fits the Axiom mould.

“We interview dozens a week and are hiring at a rate where we can’t really hire people quickly enough,” says Giles. “We only hire one in 50 of the people we speak to.”

Such rigour in recruitment brings its own benefits. Having suffered from being tarred with the temp agency brush, Axiom’s only defence is to prove its doubters wrong – and to do so quickly. It appears to be up to the task.

Lisa Shurdom, who used Axiom during her time as interim general counsel for RBS spin-off WorldPay, admits to previously being “snobby” about contract lawyers.

“I thought they were lawyers who just wanted to do nine-to-five and then go home,” she recalls. “That isn’t what Axiom lawyers are like at all.They’ve turned it on its head and they bring in demonstrably high-­achieving lawyers who still want ­challenging work but who want to be incontrol of their careers.”

Mercer associate general counsel Philip Ramsell, who has been using Axiom lawyers since 2009, echoes this. “On first impressions I was a ­little sceptical because I couldn’t see what they were offering,” he admits. “I thought they were a glorified temp agency, but when I looked more closely at the people they were ­offering and took some on, the ­quality was different to what you get from temp agencies. I’ve had a lot of people from them since and they’ve all been very good.”

Making itself useful

Which is just as well, given that the bottom fell out of Axiom’s core ­market the day Lehman Brothers went into administration. Prior to the financial crash of 2008, 60 per cent of Axiom’s clients were large banks and financial institutions, ­generating around $23m of its then global turnover.

When Lehman collapsed it took much of this market with it. But rather than bringing down Axiom too, the crash resulted in legal departments being slashed to their bare bones, providing new ­opportunities for the firm.

With general counsel facing the impossible task of maintaining work levels and standards with often ­drastically reduced teams, Axiom was positioned to offer short-term ­solutions. The fact that its hourly rates are in the £60-£180 range made taking on the additional people easier for a business to swallow.

“They’re meeting a need that in-house legal teams have around the difficulties in not being able to increase headcount while work isn’t going away, and how to square that circle,” comments Rosemary Martin, general counsel and company ­secretary at Vodafone.

Along with diversifying its client base away from the financial sector, resulting in 40 per cent of its 2010 $100m turnover coming from ­financial institutions, Axiom also used the recession as a springboard for diversifying its own business.

“About three years ago some of our clients who’d been using us for ­projects and various different engagements started to say they’d be interested in working with us in a different way, with us providing teams of people that would be ­managed by us. This was a natural response to the economic downturn,” explains Rick Teague, who runs the firm’s managed services division.

To date, the largest managed legal services contract Axiom has ­undertaken in the UK has been for ­WorldPay, with Shurdom describing the service she received as “terrific” (see case study).

Teague says the process of building a managed services team involves Axiom undertaking initial “diagnostic work” alongside the general counsel before helping to redefine individual roles and rebuild the team in a way that frees up permanent staff to focus on the most interesting legal work.

“A lot of legal work’s cyclical,” explains Teague. “We look to take over any high-volume area within the legal function. Commercial contracts is good for us. We can help [general counsel] identify work that should be done by their team and work that can be done by our team.”

Ramsell at Mercer, who is currently piloting a managed services agreement, says the arrangement has gone down well with his permanent staff, adding that his investment in time in getting it up and running should pay for itself because any issues with the team are now Axiom’s responsibility.

“We’ve taken high-volume, more simple contract work like bids and tenders and simple client contracts [and given it to the Axiom team],” he says. “It’s freed up my permanent staff so they aren’t bogged down with a lot of volume and can do bigger projects. They can add more value and it’s more interesting for them. Our team’s delighted – it gives them much better variety and a much ­better career.”

Silencing the critics

Which is not to say that Axiom has all the answers. The firm bills itself as being a much cheaper option than external rivals, offering weekly, monthly, yearly or project-based ­payment options, but both Ramsell and Martin warn that the cost-­benefit ratio is something Axiom must watch closely.

“I’m very pleased with Axiom’s service, but I guess I would suggest to them that they need to keep an eye on pricing to make sure they remain a compelling proposition,” says Martin.

“Where they come out in costs is somewhere between permanent staff and law firm costs,” says Ramsell, “so they’re the mid-range between ­having your own people and paying a law firm. You have to look at the ­premium they’re charging and what you’re getting from them in return. You have to make sure there’s some other benefit that justifies it.”

For LivingSocial international legal head Rob Miller, who used Axiom while he was general counsel at Skype, another issue arises from the fact that, at some point in the process, having an Axiom lawyer on board becomes impracticable.

“Early on it’s easy to use Axiom,” he says. “However, after a while it’s ­easier to hire someone that’s ­permanent.”

Of course, until managed services came along, Axiom was only ever meant to offer a stopgap, providing a steady supply of day-one fully ­functioning lawyers for general ­counsel who were otherwise preoccupied with one-off issues such as a team revamp or business restructure.

That in itself has caused issues for the lawyers on Axiom’s books who, despite being attracted by the ­flexibility that the firm’s model offers, find there is no clear career path built into the Axiom model.

Adam Bryce, a former Reuters in-houser who has spent three years at Axiom, says undertaking ­placements for the likes of Kraft Foods, Asos and Take-Two Interactive has allowed him to gain a broad range of experience, but that the long-term benefits are less obvious.

“Axiom doesn’t have as clear a ­progression path as you’d find in a company in a legal role – you’d work towards becoming a general counsel or a partner if you were in private practice,” he says. “There’s no immediately obvious equivalent at Axiom, although there’s been a shift away from doing individual engagements on a case-by-case basis towards managed services.

“The principal downside is the lack of an immediate career path. As the ­managed services model becomes more developed that could take care of that, but it’s not as well-worn a path.”

Coughy breaks

For Shurdom sick pay – or the lack of it – became an issue when she worked with Axiom’s WorldPay team. While Axiom lawyers are salaried, receiving an average of £125,000 a year, and get some benefits such as paid holidays, London head Giles admits that the benefits package does not compare with those offered by law firms.

“Their lawyers need to drag ­themselves in when they’re half-dead,” Shurdom explains. “There were bugs going round a lot over the Christmas period. I’m quite fervent about it – if you’re sick, stay at home, knock it on the head, don’t bring your bugs into the office. If you’re asking lawyers to do this hybrid, that’s not quite ­permanent but not quite short-term, perhaps you need to start to think about sick pay.”

Notwithstanding these quibbles, everyone involved with Axiom, clients and lawyers alike, admit that they are precisely that – nitpicking for the sake of taking a critical view. The lawyers employed by the firm are there because it suits their lifestyles to pick and choose when and if they work; while thanks to Axiom’s ­rigorous recruitment process the clients know that nine times out of 10 they will get exactly what they have asked for.

Despite quibbling about costs, Ramsell admits that he would be “hard pushed” to find any fault with the firm. “The quality of their people is something else,” he adds.

And Shurdom stresses that any time she spotted a downside to the managed services set-up, Axiom worked with her to sort it out. “They’re just so responsive,” she enthuses.

In the end, it always comes down to service.

  • Managed legal services: The WorldPay Experience

The general counsel’s view

Formerly the legal head of the merchant acquiring business at RBS, Lisa Shurdom was part of the team working on the bank’s 2010 divestment of payment processing company WorldPay to private equity houses Bain Capital and Advent Capital Management, taking on the role of interim legal head in the process.

Although she has recently been replaced by former RSA group general counsel Mark Chambers, it was Shurdom who led WorldPay into its managed legal services agreement with Axiom Law. She says the deal has proved invaluable, especially as she did not have access to her own dedicated team of lawyers in the build-up to the £1bn sell-off.

“At RBS I was part of the business-facing legal team,” she says. “I had to try to scope what resources were available to my team and where we could draw specialist resource from, for example the main corporate team or competition team.”

During her time in the main RBS business, Shurdom’s team generally comprised herself and a couple of secondees. On being handed the WorldPay mandate she found herself with a budget for the first time, but that did not mean she could set about building a legal department.

“I had to design a standalone legal function, but up to signing [the divestment off] I couldn’t recruit lawyers for WorldPay as it wasn’t a standalone business,” she explains. “I spoke to Axiom about lawyers for the divestment who’d be good for the standalone function. We moved towards an understanding that, for the first 12 months post-sale, I’d probably still have everyone from Axiom; then, as we understood the strategy of our investors and where we’d be growing, I’d have a much clearer idea of what needed to have permanent lawyers and what didn’t.”

Initially Axiom sent four lawyers, with former Atari general counsel Kristina Pappa leading. That number grew to 25 at the height of the divestment.

“As the divestment kicked off and I needed to bring in more and more lawyers for that, Kristina kept my other team on the road,” says Shurdom. “She’s just been fantastic.”

The Axiom lawyer’s view

Kristina Pappa first heard of Axiom while working as general counsel for Atari in New York.

An advert in the local legal press declaring that “Being a lawyer doesn’t have to suck” caught her eye and remained pinned to her office corkboard until she made the move to the UK in 2008.

“I loved that ad and when I came to the UK I thought, ’I wonder what they’re doing?’,” she relates.

Having made enquiries, Pappa, who was a partner at WilmerHale before moving in-house, felt that Axiom had a “really good model” that offered her the flexibility she was looking for after relocating from her native US.

Her initial cynicism about how secure Axiom would prove as a career move was dispelled when she was placed on assignment within a week. Having spent time at Amazon in the lead-up to its Kindle launch, followed by a stint at the soon-to-close Qualifications and Curriculum Development Agency, Pappa was sent to WorldPay last April.

“They brought us in because they needed extra hands in connection with the divestment,” says Pappa. “We went in to watch the ’business as usual’ work to allow them to focus on the transaction.

“I was the Axiom relationship manager – I managed all the Axiom lawyers from an HR perspective, making sure the client was happy with all the lawyers we were providing.”

Now working part-time at WorldPay following a period of maternity leave, Pappa says that leading the managed services team has allowed her to put her past experience to good use while also developing her career in different areas.

“When you’re a partner you have some area of specialism – I was a corporate securities lawyer,” she says. “Then, when I became a general counsel, I was quite focused on management. Axiom allows you to become much more of a generalist. When you’re senior you can be a lawyer and do lots of different things. It still gives me the ability to grow.”