Axiom’s founder, Mark Harris, identifies the current situation as one where lawyers feel they are overworked and underpaid, while their clients feel they pay too much for too little work.
Axiom is different. They have over 900 lawyers, and no partners.
He explained to Adam Smith Esq.:
“If you think about it, everything the legal industry has done to date, in terms of innovation, has been labor market arbitrage, including the first phase of Axiom! It all started with Ben Heinemann [the legendary General Electric GC], who took essentially the same caliber of people toiling away in law firms, and put them in-house doing pretty much the same thing, but at drastically reduced expense—to the point where 20 to 30 years later some of the largest ‘firms’ in the world are captive in-house departments.
“Or think about moving people from places like Sixth Avenue in Manhattan or California Street in San Francisco to the Sunbelt or the Rust Belt; you enjoy a one-time, cost-of-living-driven, savings, but it’s incremental, not continuous, and not fundamentally transformative. It’s not a model change; it’s an approach that fails to address how the work gets done—instead, you’re just doing the same thing with people who cost less, pure and simple.”
Harris has coined a term, “insourcing” for when his business outsources work to lawyers who then work in with the clients. He also uses “managed services” which is a system for breaking down big projects.
The model is useful when a lot of time-consuming paperwork needs to be done. The complexity and deliberately innovative structure of Axiom may prove to be a watershed. If there is a time for new models, this is it.