The New Normal
RIP Clearspire: Is this an ominous sign for NewLaw?
Posted Jun 11, 2014 9:06 AM CDT
By Patrick J. Lamb
"For five years, Clearspire led the charge in revolutionizing the 21st-century workplace and the delivery of legal services. We built a re-engineered law firm as an alternative to BigLaw and, in the process, challenged the entrenched legal industry to think and act differently.
"Our law firm was a laboratory—a proof of concept that demonstrated just how innovative today’s lawyers can be. In the process, we redefined client satisfaction, lawyer efficiency, and pioneered the model for the future of legal services delivery.
"Now the time has come to scale. We’re taking Clearspire to the next level with a mission to empower not a law firm, but all law firms.
"We are actively working to ready or class-leading Legal Services Delivery Platform for you! Stay tuned …"
PR practitioners everywhere are applauding a nice piece of work. But does it survive an encounter with the truth? And what does it mean?
First, some disclosure. I know Bryce Arrowood and Mark Cohen, the founders of Clearspire, and I think highly of them and what they tried to accomplish. As I came to understand their approach, however, I concluded they were focusing too much on the technology they had developed and not enough on solving specific problems of specific clients. Technology is a tool, not an answer.
The Wall Street Journal Law Blog, reporting on the Clearspire’s demise, reported:
"General counsel at big companies did like what Clearspire had to offer, said Mark Cohen, a co-founder and former managing director of the law practice.
"'But there is a big difference between securing that kind of intellectual affirmation, and having a GC unseat an incumbent law firm that he or she has been dealing with for a very long time,' Mr. Cohen said. 'The response we got was ‘We love your model, we really love your platform, but what we’re not particularly craving was another law firm.'"
The data do not support Mr. Cohen’s claim, however. BTI Consulting, for example, regularly reports on the number of law firms major corporate clients replace. But the implication from Mr. Cohen is that the choice was between a primary incumbent law firm and Clearspire. If that was the approach Clearspire took, their demise was only a matter of time. New entrants must earn a chance, and then earn a chance for more. Incumbency evolves, and NewLaw entrants must establish their value to a client before taking on more work. Value comes before volume.
Clearspire seemed to have a different set of expectations, announcing last year plans to open new offices and add 50 to 100 lawyers a year. A law firm cannot be built on the Field of Dreams “if you build it, they will come” view of life. That approach may work in movies, but even those with a passing understanding of business development know that something special may earn a try-out, but performance and solutions to client problems are the things that earn more work.
Clearspire’s demise is unfortunate, but does not reflect on NewLaw any more than the demise of a new microbrewery reflects on the success of other microbreweries and their ability to challenge incumbents. The point of NewLaw is that there is no single approach, no single model. The solutions being offered are many and varied. Some, like Clearspire, will fail. But others will succeed, and the market will be richer for the variation of options that become available for clients.
Patrick Lamb is a founding member of Valorem Law Group, a litigation firm representing business interests. Valorem helps clients solve their business disputes and cope with pressures to reduce legal spend using nontraditional approaches, including use of nonhourly fee structures, coordination with LPOs or contract lawyers, joint-venturing with other firms and implementation of project management tools to handle lawsuits or portfolios of litigation.
Pat is the author of the book Alternative Fee Arrangements: Value Fees and the Changing Legal Market. He also blogs at In Search Of Perfect Client Service.