My colleague Jordan Furlong and I penned an article in August 2014 on NewLaw for the ALPMA website. In that we defined NewLaw as “any strategy, structure, model, process or way of delivering legal services that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed”.
We featured some firms as examples of NewLaw, including some from Australasia. At the time it was quite easy to identify firms ‘doing something different’. In the short time since then, this type of ‘new’ simply does not seem so unique and special any more, and a number of firms are doing something in this space.
We didn’t mention Nexus Law Group then, mainly as we didn’t know of them or what they were in the process of doing. That has changed: Nexus Law seems to be getting a lot of attention and recognition and it appears, for good reason.
What is different about them? I talked with their founder and Principal, Marcus McCarthy recently, and he outlined what he feels makes them unique in this space.
While they have some of the characteristics of some NewLaw firms e.g. engaging semi-independent contract lawyers, they seem to have done some other fundamental, structural things which could be very beneficial to clients and the lawyers who work for them as well as the profession in general. Let’s look at some of these:
- they have a traditional legal practice as their central national hub, which has the advantage that it has facilitated them arranging proper compliant PI insurance and trust accounting arrangements for all of their contracted lawyers and employees;
- this has also meant they can service clients optimally, depending on needs, by using in-house or out-sourced specialist lawyers, which they feel adds significantly to efficient client servicing;
- they have developed a specialised legal practice management system they term ‘OpenLaw’ which enables their contracted lawyers to communicate and work freely with the hub firm, access centralised practice resources, precedents, matter folders and the like and generally operate as if they were in a traditional dispersed firm. This means their contracted lawyers are much more than traditional sole practitioners signed up to a mere umbrella brand offering;
- a special characteristic of this structure is that it seems to address some of the fundamental issues around disenfranchisement and depression facing the profession – lawyers at Nexus seem to have a collective home and are at the front and centre of everything, and appear to be rewarded accordingly (see next point);
- unlike other NewLaw firms, Nexus has structured its financial arrangements so that their lawyers earn up to 75% of gross fees generated and collected, plus an agreed gross fee split (I understand this is equivalent to an almost equal profit share) on all work referred to other Consultant Principals in the Group. This is seems generous to these lawyers. This appears to be driven by an underlying ethos that the lawyers and not the owners should derive the highest possible benefit from their intellectual endeavours and direct client relationships;
- we understand the OpenLaw practice system is capable of being replicated under licence to potential hub owners by jurisdiction or to other firms wishing to run this practice structure for themselves. As such, there is potential for outside investors in this unique new business model and with it, the possibility of a significant industry shift to a more beneficial practice model for lawyers generally.
It seems the market is taking note. They are a finalist for the 15th Annual Lawyers Weekly Australian Law Awards in the categories: Corporate – Boutique Law Firm of the Year and Individual – Managing Partner of the Year for Mr McCarthy. We are advised that one of their consultant lawyers, Justin Sprogis, is also a finalist as sole practitioner of the year in the Banking & Finance category.
Sean Larkan, Principal, Edge International