US law firms find their own alternatives
The US legal system does not currently permit non-lawyers to be partners in, or share profits with, law firms, on the principle that the industry needs a level of independence in order to serve clients properly. comments powered by Disqus
Some advocate the opening up of the profession to outside investors, but in the meantime nontraditional law firms and service providers are finding other ways toward structural innovation. Axiom Law, Novus Law and hybrid company Clearspire are all funded by nonlawyer investors.
And in the UK, recent reforms allowing UK firms to take outside investment and combine with other professional services have resulted in few large deals being made with traditional law firms.
Investors and venture capitalists are however seeing big potential in legal tech companies and alternative legal companies (which provide legal support and consumer legal services), and are funding them with millions of dollars.
“Generally, when markets are in flux, there are opportunities to build new tech start-ups and radically transform that market,” says Keith Rabois, an investor in the venture capital firm Khosla Ventures. “Mass transformation driven and accelerated by external events opens up wonderful opportunities for entrepreneurs to take advantage of.”