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outsourced solutions. Like many good companies, Axiom prides itself on operational efficiencies
that are rarely found in the traditional law firm structure, like low-cost overhead, a culture of agility
and flexibility, and a centralized command structure. And perhaps the great distinction is that
Axiom can — and does — receive outside investment, operating formally in a way that blurs the
line between business and law.
As mentioned earlier, Legal Business magazine proudly proclaimed that Axiom had
breached the top 10 “legal services providers” in the U.K. Outside of Axiom, the Legal Business
list of prestigious “firms” included all the usual suspects (Allen & Overy, Clifford Chance,
Freshfields, Linklaters, Slaughter and May, and DLA Piper). This was the first time a non-law firm
has appeared in these ranks, but it will not be the last. Legal Business noted that this breach of the
coveted top 10 was “significant” and “demonstrate[ed] how non-law firm providers are winning
over some bluechip clients.”6 In our view, this breach demonstrated something else: alternative
legal services providers are not just “winning” the business of “bluechip” 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 in 2014. Yet, during that period
spending on outside law firms fell 2 percent.7 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.”8 The report then defines “the dominant trends impacting the legal
market in 2014 and key issues likely to influence it in 2015 and beyond.”9 The report recommends
that law firms need to accept, anticipate, and act on the growth in market share of non-traditional
competitors.10
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
6 Sarah Downey, The Clients’ Verdict: Linklaters Wins Best Firm in Show from Annual In-House Survey, LEGAL BUSINESS (Oct. 7, 2014,
2:00 PM), http://www.legalbusiness.co.uk/index.php/lb-blog-view/3053-linklaters-wins-best-firm-in-show-from-annual-in-house-survey.
7 Elizabeth Olson, Corporations Drive Drop in Law Firms’ Use of Starting Lawyers, Study Finds, THE N. Y. TIMES (Oct. 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.
8 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.
9 Id. at 1.
10 Id.
232
that are rarely found in the traditional law firm structure, like low-cost overhead, a culture of agility
and flexibility, and a centralized command structure. And perhaps the great distinction is that
Axiom can — and does — receive outside investment, operating formally in a way that blurs the
line between business and law.
As mentioned earlier, Legal Business magazine proudly proclaimed that Axiom had
breached the top 10 “legal services providers” in the U.K. Outside of Axiom, the Legal Business
list of prestigious “firms” included all the usual suspects (Allen & Overy, Clifford Chance,
Freshfields, Linklaters, Slaughter and May, and DLA Piper). This was the first time a non-law firm
has appeared in these ranks, but it will not be the last. Legal Business noted that this breach of the
coveted top 10 was “significant” and “demonstrate[ed] how non-law firm providers are winning
over some bluechip clients.”6 In our view, this breach demonstrated something else: alternative
legal services providers are not just “winning” the business of “bluechip” 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 in 2014. Yet, during that period
spending on outside law firms fell 2 percent.7 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.”8 The report then defines “the dominant trends impacting the legal
market in 2014 and key issues likely to influence it in 2015 and beyond.”9 The report recommends
that law firms need to accept, anticipate, and act on the growth in market share of non-traditional
competitors.10
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
6 Sarah Downey, The Clients’ Verdict: Linklaters Wins Best Firm in Show from Annual In-House Survey, LEGAL BUSINESS (Oct. 7, 2014,
2:00 PM), http://www.legalbusiness.co.uk/index.php/lb-blog-view/3053-linklaters-wins-best-firm-in-show-from-annual-in-house-survey.
7 Elizabeth Olson, Corporations Drive Drop in Law Firms’ Use of Starting Lawyers, Study Finds, THE N. Y. TIMES (Oct. 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.
8 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.
9 Id. at 1.
10 Id.
232
