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Leaders in Legal Business
of “blue chip” clients but are gaining their respect and trust. Axiom has won that ephemeral prize every
attorney desires: prestige.
For those that have been following the alternative legal space, Axiom is just one of many recently
birthed companies fueling this transformation. Like Axiom, many of them find their heritage in
entrepreneurship and investment. While Biglaw firms rely heavily on their storied history and prestige,
many of the new heavy hitters were birthed after 2000. Companies like Axiom, Pangea3, Quislex, and
UnitedLex are relatively new players, but are steadily increasing their headcount, revenues, and market
share.
The increase in the legal market share for LMS businesses explains unusual trends in the overall
legal services marketplace. The New York Times reported on detailed research into the legal market HBR
Consulting, a leading provider of legal metrics. This research found that companies worldwide increased
their total legal spending by 2 percent last year. Yet, during that period spending on outside law firms fell
2 percent.8 Surely some of this is attributed to corporate counsel insourcing functions that were previously
given to Biglaw firms. But we believe much of the work is being sent to LMS providers, which have become
part of the corporate legal departments’ growing arsenal for improving efficiency. At Pangea3, we have
seen a double-digit spike in demand over this time period, and we hear that our competitors have too. The
legal services pie is getting bigger, but law firms’ share is decreasing.
Still not convinced? Read this year’s report published by Georgetown Law Center for the Study of
the Legal Profession and Thomson Reuters Peer Monitor on the state of the legal market. That report
squarely addressed how “the market for legal services has changed in fundamental — probably irreversible
— ways.”9 The report then defines “the dominant trends impacting the legal market in 2014 and key issues
likely to influence it in 2015 and beyond.”10 The report recommends that law firms need to accept,
anticipate, and act on the growth in market share of non-traditional competitors.11
The trend is becoming clearly observable, but we are often asked why this is happening. Why,
seemingly out of the blue, are LMS companies are growing so quickly, and why are they able to tackle this
work better, faster, and cheaper than the traditional legal players? Part of the answer depends on
circumstance and the forces creating a crucible of efficiency after the Great Recession in 2008. But a more
interesting answer comes from the business world, which has always implemented project management,
specialization, and technology optimization to improve quality, efficiency, and low costs. LMS companies
represent the long overdue application of these practices to the law.
LEGAL MANAGED SERVICES: PROJECT MANAGEMENT, SPECIALIZATION AND TECHNOLOGY
LMS businesses do not include providers of temporary staff augmentation or part-time contractors.
As the name indicates, managed services employ full-time professional staff, business excellence,
principles, and process efficiencies, while leveraging a globalized workforce and adopting technology.
Project Management
This is where the traditional legal industry has simply lagged. For the most part, and with some
modern exceptions, law schools simply do not teach project management. As a result, most of the powers-
that-be in Biglaw firms simply do not know anything about project management and do not see it as a core
skill their new attorneys need to grasp. Some firms are seeing the light (employing project management
8 Elizabeth Olson, Corporations Drive Drop in Law Firms’ Use of Starting Lawyers, Study Finds, THE NEW YORK TIMES (October 10, 2014,
12:25 PM), http://dealbook.nytimes.com/2014/10/10/corporations-drive-drop-in-law-firms-use-of-starting-lawyers-study-finds/?_r=0.
9 Georgetown Law Center for the Study of the Legal Profession & Thomson Reuters Peer Monitor, 2015 Report on the State of the Legal Market
(2015), http://www.law.georgetown.edu/academics/centers-institutes/legal-profession/upload/FINAL-Report-1-7-15.pdf.
10 Id. at 1.
11 Id.
158
of “blue chip” clients but are gaining their respect and trust. Axiom has won that ephemeral prize every
attorney desires: prestige.
For those that have been following the alternative legal space, Axiom is just one of many recently
birthed companies fueling this transformation. Like Axiom, many of them find their heritage in
entrepreneurship and investment. While Biglaw firms rely heavily on their storied history and prestige,
many of the new heavy hitters were birthed after 2000. Companies like Axiom, Pangea3, Quislex, and
UnitedLex are relatively new players, but are steadily increasing their headcount, revenues, and market
share.
The increase in the legal market share for LMS businesses explains unusual trends in the overall
legal services marketplace. The New York Times reported on detailed research into the legal market HBR
Consulting, a leading provider of legal metrics. This research found that companies worldwide increased
their total legal spending by 2 percent last year. Yet, during that period spending on outside law firms fell
2 percent.8 Surely some of this is attributed to corporate counsel insourcing functions that were previously
given to Biglaw firms. But we believe much of the work is being sent to LMS providers, which have become
part of the corporate legal departments’ growing arsenal for improving efficiency. At Pangea3, we have
seen a double-digit spike in demand over this time period, and we hear that our competitors have too. The
legal services pie is getting bigger, but law firms’ share is decreasing.
Still not convinced? Read this year’s report published by Georgetown Law Center for the Study of
the Legal Profession and Thomson Reuters Peer Monitor on the state of the legal market. That report
squarely addressed how “the market for legal services has changed in fundamental — probably irreversible
— ways.”9 The report then defines “the dominant trends impacting the legal market in 2014 and key issues
likely to influence it in 2015 and beyond.”10 The report recommends that law firms need to accept,
anticipate, and act on the growth in market share of non-traditional competitors.11
The trend is becoming clearly observable, but we are often asked why this is happening. Why,
seemingly out of the blue, are LMS companies are growing so quickly, and why are they able to tackle this
work better, faster, and cheaper than the traditional legal players? Part of the answer depends on
circumstance and the forces creating a crucible of efficiency after the Great Recession in 2008. But a more
interesting answer comes from the business world, which has always implemented project management,
specialization, and technology optimization to improve quality, efficiency, and low costs. LMS companies
represent the long overdue application of these practices to the law.
LEGAL MANAGED SERVICES: PROJECT MANAGEMENT, SPECIALIZATION AND TECHNOLOGY
LMS businesses do not include providers of temporary staff augmentation or part-time contractors.
As the name indicates, managed services employ full-time professional staff, business excellence,
principles, and process efficiencies, while leveraging a globalized workforce and adopting technology.
Project Management
This is where the traditional legal industry has simply lagged. For the most part, and with some
modern exceptions, law schools simply do not teach project management. As a result, most of the powers-
that-be in Biglaw firms simply do not know anything about project management and do not see it as a core
skill their new attorneys need to grasp. Some firms are seeing the light (employing project management
8 Elizabeth Olson, Corporations Drive Drop in Law Firms’ Use of Starting Lawyers, Study Finds, THE NEW YORK TIMES (October 10, 2014,
12:25 PM), http://dealbook.nytimes.com/2014/10/10/corporations-drive-drop-in-law-firms-use-of-starting-lawyers-study-finds/?_r=0.
9 Georgetown Law Center for the Study of the Legal Profession & Thomson Reuters Peer Monitor, 2015 Report on the State of the Legal Market
(2015), http://www.law.georgetown.edu/academics/centers-institutes/legal-profession/upload/FINAL-Report-1-7-15.pdf.
10 Id. at 1.
11 Id.
158
