LeClairRyan might be coming to the end of its run, but don’t pin the blame on the firm’s joint venture with UnitedLex. Disagree? Email me here. Want this dispatch in your inbox every Thursday? Sign up here.

LeClairRyan’s Hail Mary?

I’ve been spending part of the last few days running down rumors about the future of LeClairRyan. The demise of an Am Law 200 firm is always an interesting story—if also a sad one for the firm’s lawyers and staff—and every collapse has its own unique intricacies.

Here, a noteworthy piece of the puzzle is ULX Partners, LeClairRyan’s 2018 joint venture with alternative legal service provider UnitedLex. The law firm transferred hundreds of its staff to the new operation. Both partners made the bet that other firms would get on board and turn to the start-up to handle their legal support functions, including human resources, information technology, knowledge management, pricing and procurement. As part of the arrangement, they’d also receive a minority stake in the venture.

Beyond pointing out that LeClairRyan remains a client of UnitedLex and that it will continue to provide support “as needed,” UnitedLex has largely been mum about the consequences of the firm’s apparent dissolution. One likely explanation: LeClairRyan’s own leadership has refused to comment on the future of the firm, even with multiple sources confirming that lawyers and staff have been encouraged to seek employment elsewhere and that some support staff have been laid off.

Based on the reporting so far, it’s a stretch to blame the UnitedLex deal for the firm’s downfall. A more plausible story is that CEO Erik Gustafson, who assumed leadership of LeClairRyan in 2016, recognized that the firm was in a perilous position and saw the arrangement as a bold but necessary move to improve its long-term viability. We’re bound to learn more in the weeks to come.

It also remains to be seen what LeClairRyan’s fall will mean for UnitedLex, a 12-year-old business that has been rapidly scaling up. ULX Partners was named as a co-defendant in a recent sex discrimination suit against LeClairRyan. Will the parent company face any other exposure to the firm’s outstanding liabilities? Its growing size—UnitedLex said last year it inked deals worth an eventual $1.5 billion in revenue in a recent 18-month period—suggests it may be an appealing target, but also able to weather the fallout.

These questions are pertinent in part because the ULX joint venture may be unique, but LeClairRyan is far from the only firm getting into the alternative legal services business. Just this summer, both Greenberg Traurig and Eversheds Sutherlandlaunched their own New Law subsidiaries.

I suspect other firms are having similar conversations, either internally or with potential outside partners, about how to sell services that promise greater efficiency to both clients and other law firms. This latest development might prompt a hiccup in any dialogue.

But I’d caution against taking the wrong lessons from this one data point. There’s no reason to think the rationale on either side was flawed here. Ten years from now, the LeClairRyan-UnitedLex deal may be seen as a footnote in a broader story of how the line between Big Law and New Law finally began to blur.

In the News:

We’ve seen several high-profile alliances between law firms and the Big Four since last year. Do these tie-ups make firms more appealing destinations for top talent? An announcement earlier today from Epstein Becker Green suggests the answer is yes: Erika Collins, the former co-chair of Proskauer Rose’s international employment practice, contacted an old friend at the firm as soon as she read about the arrangement.

Commercial litigation finance: good for firms, good for businesses, good for the University of California Santa Barbara? But funding mass tort litigation can apparently be a dicier proposition. Alison Frankel at Reuters had a lengthy reporton a Texas businessman who lost $6 million that he invested in a docket of claims against BP after the Deepwater Horizon spill. Now Max Duncan is going after Baker Donelson, claiming the firm did a lousy job representing him against the plaintiffs’ firms that intially took him for a ride.

Last week I found that law firms in the U.K. were cashing in on the uncertainties from Brexit. Now that new Prime Minister Boris Johnson is pushing a hard line on leaving the E.U., there’s fear the good times won’t last. The FT had a story on a Law Society report warning that a no-deal Brexit could dent the market by 10% compared to a smooth exit, with U.K. lawyers denied access to the common market.

Finally, I wrote a couple of weeks ago about the seeming indestructability of the billable hour as an organizing principle within firms. Dentons’ senior partner Jana Cohen Barbe had a powerful piece for our Minds Over Matters series, asking why firms continue to hold onto a practice widely regarded as “antiquated and destructive.” Have a look.

Back again next Thursday! What do you want to hear about? Tell me at [email protected]. Sign up here to receive The Law Firm Disrupted as a weekly email.