Why Silicon Valley’s Biggest Investors Are Betting on Alternative Legal Companies
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U.S. lawyers know ABA Model Rule 5.4 prohibits them from sharing profits or forming partnerships with those who aren’t licensed to practice. In theory, this rule keeps the lawyering safely in the hands of the lawyers (and revenue from the practice of law safely ensconced at traditional law firms).
But does it really? And do outsiders looking to invest huge sums of money in the legal profession—in hopes of huge gains—even have their sights set on traditional law firm profits?
Not really. Instead, in the last five years we’ve seen nontraditional law firm Axiom Law negotiate M&A deals, alternative legal service provider Novus Law challenge the accuracy and efficiency of contract lawyers and BigLaw junior associates in trial prep, and hybrid company Clearspire create a model that allows a law firm and a business outsourcing company to work under the same umbrella. All three are disrupting the status quo of law practice, all three are taking work from traditional law firms, and all three are funded by nonlawyer investors.
Read original articleTags: Law Firm, Law Practice, traditional law firm, traditional law firms
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