Richard Harrison, a solicitor and partner in Laytons, wonderswhat to make of FirstLAW. He may be contacted at richard.harrison@laytons.com
FirstLAW (www.FirstLAW.co.uk)is an innovative Web site providing genuine legal e-commerce. It is described as‘a new kind of law firm for the new millennium – Britain’s first cybersolicitors’. It is conceived and run by a partner in Davies Arnold Cooper. DACretain an interest in the Web site which appears to be run from their offices.It is entrepreneurial and highly imaginative. So what is FirstLAW reallyoffering?It works by brokering instructions between clients and lawfirms. Clients post a piece of work on the site which is then put out to tenderto law firms who have volunteered for the panel. The law firms make bids for thework, on ‘client-friendly’ terms (as described and drafted by FirstLAW). Theclient can then negotiate online supported by FirstLAW. And when the contract isfinally awarded, FirstLAW helps the client keep its law firm on the straight andnarrow and charges 10% of the fee (as well as taking a 5% commission on all workreceived from the client for a period of five years). What is being introducedfor clients, according to FirstLAW, is competitiveness, choice and bargainingpower.
The starting point for any further discussion is that anefficient legal services market puts buyers (clients) and sellers (law firms) intouch at a price which is acceptable to both parties. Intermediaries can assistin this process. So far, so good. The next assumptions are, I suppose, a bitmore tendentious. Lawyers generate suspicion amongst the public. Lawyers usetheir inside knowledge to bamboozle and confuse you. Lawyers overcharge. So youneed an experienced supervising intermediary, preferably a poacher turnedgamekeeper, to ensure that the lawyers you instruct are kept on a tight rein anddo not overcharge or exploit you.
The question is whether this is part of the future for theprovision of legal services. These are fairly unpleasant assumptions (or arethey just unwelcome?). FirstLAW is based on a perception of legal practice thatlawyers seeking custom have absolutely no idea of how to providecustomer-friendly services. So FirstLAW’s innovation is that it has put itselfin the position of running an intermediary service which can manage lawyers,make sure they act in the client’s best interests and generally protect thoseclients.
It disturbs me that my own profession has allowed itself tobecome so distrusted that opportunistic entrepreneurs find a gap in the marketunder which they become the client’s trusted adviser. The additional law firmsub-contracted to do the work and incur the risk becomes a mere functionary tobe managed, controlled and quantitatively analysed.
Lawyers are asked to register with FirstLAW, to comply inprinciple with the client care agreement suggested, and to participate in onlineblind auctions for fixed price legal projects. FirstLAW promises clients that itwill find them the right lawyer, conduct the cyber-auction process, implementthe retainer agreement and manage the project. Apparently, the vision forFirstLAW came from ‘…a belief that too many law firms are not genuinelyclient focussed’. FirstLAW’s marketing material implies that it uniquelyoffers such a focus. It states that its expertise is in ‘managing legalprojects’ – a ‘specialist legal discipline for which we are the marketleaders’ (my italics). I have always worked on the assumption that any lawfirm instructed on a legal project is best placed to manage it. The principalexpertise of most transactional and litigation lawyers is project management.There should be no requirement for an intermediary to manage the project. If alaw firm cannot be trusted and needs managing by a third party, it should not beinstructed.
There is of course a superficial attraction to potentialclients who are encouraged to use the services of an intermediary: they willhave their interests looked after at no additional cost. There is an obviousattraction to being the intermediary: you simply take 10% of the fees and havethe opportunity to make the unfortunate law firm that you are managing jump whenyou want it to jump. You have access to the client but not the responsibility ofdelivering the service. All this because you have persuaded the client that youand you alone have its interests at heart and will protect it against therapacity of the legal profession.
A sceptic may well argue that such a three-cornered set-upcan easily generate difficulty, conflict, distrust and, in the end, provide theclient with more complex problems than arise from a two-handed relationship. Alegal services project managed by an outsider runs an equal but different riskof ending in conflict to that run on the traditional pattern. Accepting thelowest tender from suppliers who do not amend a very one-sided retaineragreement may not augur well for a very high quality service. You may spend allyour time in discussions about what is expected and what can be provided.
Potential clients thinking of using an intermediary serviceto obtain the services of a law firm may wish to think at least twice. Law firmssigning up should consider the FirstLAW Client Care Agreement very carefully. Itwill need to be modified. Just look at the sort of obligations that FirstLAWexpect you to undertake. The agreement as drafted by FirstLAW – which isdescribed as ‘client friendly’ – states that there are ‘NO additionalobligations on the client except to pay the law firm’s agreed fee’. For thelaw firm, there is an automatic penalty of a 5% discount if a telephone call isnot returned within 4 hours, an e-mail is not replied to within 8 hours, a faxis not replied to within 24 hours and a letter is not replied to within 10 days?
There are reasons for doing this but most law firms will wantto better these response times and exceed the client’s expectations: it shouldnot be an obligation to be policed by an outsider.
How about this?:
The law firm should use reasonable endeavours to optimise the efficiencyand efficacy of the process of putting into legal effect the objectives of theclient in relation to the matter implicit in the instructions accepted by thelaw firm and taking into account the information provided in the particulars by,for example:
- analysing what motivates the client and any other interested parties and acting accordingly in the client’s best interest;
- promoting the use of live communication links (such as telephone, video conferencing and meetings) in preference to written means of communication;
- monitoring and actively managing compliance with given timetables;
- negotiating co-operatively;
- planning carefully and manoeuvring tactically;
- drafting concisely and precisely;
- keeping the client informed.
These are fine words for a marketing brochure but not for aretainer agreement. Such standards are implicit in the quality that everyrational law firm strives for and their expression here is far too vague: it isquite obviously drafted simply to hit the right buttons with the disgruntledconsumer of legal services. Why should telephone calls and meetings necessarilybe ‘‘preferred’’ to other means of communications? Writtencommunications may be necessary and may indeed be desirable both for lawyers andfor some clients as a record of what needs to be said and why decisions aretaken. Where are all the detailed client obligations of co-operation, disclosureand provision of information which should be included in any retainer agreement?It is notable that any disputes are to be determined by a representative of oneof the parties (in this case, the agreement provides that, not surprisingly,FirstLAW fulfills this role)?
FirstLAW is clearly sending out some interesting signals. Itis based on an entrepreneurial vision and I respect the innovation and thecommitment to a fully Internet-based service. This may be the future of some lawfirm/client relationships but anyone thinking of using it should not give up thebelief that a trusting and transparent relationship with a highly experiencedproject manager, totally committed to your interests, can be found by goingdirectly to a decent law firm (including most probably DAC). The use of anotherlayer of lawyers will not necessarily solve all perceived problems and may causesome new ones.
