Author: Jeremy Hodges

Freshfields Bruckhaus Deringer has agreed to use a contract lawyering business as the firm begins to see an upturn in work levels.

The magic circle law firm, which currently operates a fee earner to partner leverage of 3:1, is considering a number of options to maintain that level when commercial activity resumes, including contract lawyers, outsourcing and the firm’s alumni network.

Freshfields will turn to contract lawyers to temporarily cover work in across a range of practices, although the firm said that it had no immediate plans to use the service as market demand is not yet high enough.

Freshfields London head Tim Jones told Legal Week: "We need high quality people that can do the kind of work that our clients are bringing to us – quality assurance is the key and we will work hard to vet the people coming in with [contract lawyering business] ItsMyLaw. The people that do the work should be as good as the people we have on our books."

ItsMyLaw has so far established a pool of 50 lawyers of varying levels of experience across a broad range of practice areas to be contracted out to law firms.

ItsMyLaw director John Cullen added: "Having talked to management at firms of all sizes, the common theme is utilisation rates. When they get to a certain level they need to think about gearing up; we are trying to encourage firms to think about the alternatives in advance so they can get the right expertise on board as and when they need it, without increasing fixed cost leverage."

In a separate move, Freshfields is in the process of setting up a pool of former fee earners to use on transactions alongside contract lawyers.

Leading London firms in talks to bring in teams of contract lawyers.
Several leading London law firms are considering using contract lawyers as part of a new business venture intended to create a vetted pool of temporary lawyers to support major practices.

Firms including Freshfields Bruckhaus Deringer, Travers Smith, and a number of U.S. firms active in London are interested in bringing in contract lawyers for individual pieces of work—a model rarely used in the United Kingdom but well-established in the United States.

John Cullen has held conversations with the firms above, as well as a number of firms in the U.K. top 50, about the service "itsmylaw," which will formally launch in the new year. He has pulled together a pool of some 25 lawyers, including former general counsel and partners as well as more junior lawyers, who can be hired for particular deals or cases.

The unusual venture echoes the established U.S. practice of regularly using contract lawyers on mandates for specific jobs. The venture has also been compared to a virtual law firm, though the focus is on supplying private practice, not clients.

While using contract lawyers has never taken off in the U.K., London partners suggest that there is more interest in the idea now as a result of current tough market conditions. "We have become very busy and stretched but are cautious about going back into the recruitment market unless and until we feel the uptick has real legs," says Travers managing partner Chris Carroll. "As such, the ‘itsmylaw’ concept presents interesting possibilities for plugging the hole."

Freshfields London managing partner Tim Jones says, "We are looking at alternative ways to deliver some routine legal tasks, as well as the outsourcing of document reviews, and are actively working with clients to test tailored solutions that deliver an effective and cost-efficient service."

Recruiter Cullen adds, "Firms are anxious to avoid increasing fixed costs, and if there is an option involving high-caliber individuals on a one-off cost, it is a sensible alternative."

In a related move, Allen & Overy is considering creating a central pool of alumni to draw on to assist on its work for specific projects. It is already using alumni to help with work such as producing first drafts of banking documents on an ad hoc basis but is considering formalizing and extending the process.

The interest in flexible legal staffing comes against a backdrop of client pressure to increase efficiency. —Claire Ruckin

However we are starting to see an uptake in the market for the elite lawyers on contract to firms where they are do not have the specific staff they need.  This is starting to provide a strong validation of the business model that is being rolled out. 

In addition to the roles being filled, ItsMyLaw is also delivering career consultancy services to those firms still laying staff off.  The Coaching team has extensive Legal Market experience and specific experience in helping talented Lawyers discover the opportunities that are available in the market at this time.

The quality of the lawyers, a critical factor in this undertaking is something that ItsMyLaw is taking seriously, since as Alex Novarese points out

..success or failure largely hinges on the quality control of the retained lawyers.

To find out how we are managing this challenge contact John Cullen on 020 3012 0000.

Travers managing partner Chris Carroll said: "We have become very busy and stretched but are cautious about going back into the recruitment market unless and until we feel the uptick has real legs. As such the ‘ItsMyLaw’ concept presents interesting possibilities for plugging the hole."

ItsMyLaw is also looking to work with a number of the top city firms to help them staff up with alumni to help assist with specific projects or other work.  More on this story can be found here.

They go on to say that

Just 50 per cent of employees had agreed to the scheme a week before the deadline on Friday 29 May.  But after a concerted push by partners, and warnings that further redundancies might be necessary, that figure rose to more than 90 per cent with one day of voting to go.

Linklaters has cut associate pay bands by an average of 7 per cent and slashed bonuses across the firm. Linklaters associates will move up through the salary bands this year, but reduced rates mean that most junior lawyers will receive a pay rise of between just 2 and 4 per cent.

This is taking place at a time when the firm will have to pay up to £50m in compensation to departing partners, as new details emerge of the cost of the firm’s New World restructure.

The firm is offering an exit package of one year’s pay to partners leaving as a result of the New World programme.

It is understood that around 50 partners – nearly 10 per cent of the global partnership – will be shown the door in the coming months as the firm bids to become a smaller, more profitable outfit.

ItsMyLaw is positioning itself to help the lawyers with transition that comes with this type of news.  Whether a lawyer is making a conscious decision to work as a contractor or is seeking support and guidance in the search for alternative career opportunities, the ItsMyLaw Career Transition service is ideally placed to ensure that change is made as seamless as possible

There’s only one story anyone is interested in at the moment: the goings-on at Clifford Chance. Yesterday the firm announced that it was axing up to 80 associates and putting 880 London lawyers in consultation.

The effects of the current market conditions are being felt everywhere and the law firms are not being spared.  In a survey by “The YouGovCentaur” its results show that the uncertainty has spread down all levels with only 9 per cent of associates felling strongly that they would be able to find another job easily.

Worryingly the ­figure slumped to just 6 per cent of those at firms with turnovers of between £25m and £50m, which roughly equates to the bottom half of the top 100 firms.