In 2020, more law firms may be finding new partners to help them handle low-margin work, and more litigation funders might be collaborating with universities. They might also be keeping these efforts to themselves. Want to weigh in? Email me here. Want this dispatch in your inbox every Thursday? Sign up here.

Who Needs Transparency?

I'm with 64% of America on this pressing issue, so allow me to welcome you to a new decade on behalf of the Law Firm Disrupted. Pedantry aside, the posting of a new calendar (for those of you who still do that—my kids got this one at home) makes for a good opportunity to look forward. And that's one of our ongoing goals here.

So, a little while back, I took some time to think about the implications of the growing number of options that users of legal services have at their disposal beyond law firms: whether we're calling "New Law" or "law companies," or the clunky "alternative legal service providers."

The growth of competition, particularly for handling work that is most subject to rate pressure, clearly challenges law firms to do something differently. In 2020, I wrote here, "expect more and more law firms to advance along one of two paths: partnering with alternative providers, or enhancing their own internal capabilities to handle high-volume, low-margin work."

We've seen a few examples already. Take Eversheds Sutherland's own global ALSP, or Greenberg Traurig's Recurve, both in the latter category. Or LeClairRyan's much-ballyhooed arrangement with UnitedLex.

But the rough landing for ULX Partners—now an $8 million creditor of bankrupt LeClairRyan—comes with a wider lesson, one marginally connected to November's news that the defunct firm owned just 1% of the joint venture.

That takeaway is that not everyone needs to know what the strategy is. Whether it's a sophisticated internal apparatus for handling commodity work or a partnership with a player in New Law, law firms don't need to shine a spotlight on how exactly they're doing it, as long as the client is satisfied with the output and the price, while remaining assured that its proprietary information is being treated. Or, as Marcie Borgal Shunk of the Tilt Institute put it to me, there's plenty of behind-the-scenes work unfolding to meet client needs without the publicity of the UnitedLex-LeClairRyan deal.

Lost in this lower-profile approach is the ability for firms to market themselves as being at the cutting edge. But avoiding reputational damages when such arrangements go south might make the trade-off a winner.

It's quite possible that more firms are already doing this. If so, they're not alone in the wider business world.

"When you look at other industries, there's a lot of supply chain arrangements that don't necessarily make it to the clients' eyes," Borgal Shunk said.

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I also spent some time looking backward at the fortunes of the litigation finance sector in 2019. Many in the cast of characters for this overview—Burford Capital and Muddy Waters, Vannin Capital—are surely familiar names to readers of this briefing.

A development that didn't make the story, but one with implications for 2020 and beyond, was Longford Capital's investment in UC Santa Barbara's patent enforcement campaign against five retailers over energy-saving LED light bulb technology. Nixon Peabody attorney Seth Levy, who helped put together the deal and is involved in litigating the cases, told me at the time that there are more opportunities out there for universities to align with funders and firms in order to respond to patent infringements.

As Paul Haskel, co-chair of the corporate department at Richards Kibbe & Orbe, put to me more recently: "University IP has always been an interesting area for litigation funders. Universities have large pots of IP and not a lot of cash to pursue litigation."

Will we see more of these arrangements this year? Or, in keeping with my first note about the costs of transparency, have other funders already jumped on board, even if they're staying quiet about these investments? It's an issue they've gone to bat over elsewhere.

In the News

It's been a quiet two weeks for substantive developments involving the legal industry. Nonetheless:

➤➤You might be familiar with one-time Proskauer Rose attorney David Stern. He transformed another industry, the National Basketball Association, during his 30-year tenure as the league's commissioner, before his death Wednesday at 77.

➤➤Firms in London are reevaluating how they use their space. Per the FT, for DLA Piper's new headquarters there, the open plan has replaced private offices, at least for most of the firm's attorneys. Kirkland & Ellis, Skadden, Dentons and Hogan Lovells are among other firms considering new space.

➤➤Finally, a few of my colleagues also spent some time considering what 2020 has in store. Here's Dylan Jackson on clients' expectations for how firms handle talent, Samantha Stokes on busy practice areas, Dave Thomas on hot markets, and Patrick Smith on the presidential election. Yup. It's just over 10 months away.

You'll hear from me again next Thursday! Thanks again for reading, and please feel free to reach out to me at [email protected]. Sign up here to receive The Law Firm Disrupted as a weekly email.