Legal eagles set free
Disruptors: By shedding the trappings of a traditional law firm, Axiom's Internet-connected attorneys offer legal services at a deep discount.
SAN FRANCISCO (Fortune) -- You could be forgiven for thinking you had the wrong address when traipsing into the San Francisco office of newfangled law firm Axiom. There isn't a scrap of mahogany paneling, nor bookcases filled with impressive legal tomes. There aren't even any practicing lawyers.
There are people in this modernist chic space, and to be fair, some of them used to practice law. But their job now is to manage client relationships and drum up corporate work for the fast-growing legal services company.
The 216 people who do the actual lawyering for Axiom in San Francisco, Los Angeles, Chicago, New York and London work from their homes or at their clients' workplaces. They don't come into the office. They also decide what kind of clients to take on, and set their own hours.
Axiom has a slick Web site where attorneys can discuss thorny legal matters - a sort of social network for lawyers. In the hidebound legal profession, where associates work endless hours and partners make all the money, Axiom is a new take on the business of law.
"Axiom is almost like an online dating service for the legal profession," said Chris Albinson, a managing director with Panorama Capital, a venture capital firm that along with Benchmark Capital, Greenhill & Co. and others have invested in the New York-based legal company.
Unlike traditional law firms, Axiom, founded in 2000 by Big Law refugees Mark Harris and Alec Guttel, is legally a corporation, as opposed to a partnership. And yes, it has venture capital funding, which means at some point it will need to return money to its investors by going public (in theory it could get bought too, but it's hard to imagine an acquirer).
By foregoing the expensive and impressive offices of high-end law firms and by doing away with partners and billing in six-minute increments, Axiom is able to offer legal services at fees that can be 50% lower than those charged by the country's top firms. Axiom is staffed by attorneys who cut their teeth working at these rival law firms.
The idea of a distributed legal team, connected by iPhones and laptops, has resonated with some of the largest technology companies and banks in the nation, says Mehul Patel, who heads up business development in San Francisco for Axiom.
"The people who are hiring us work that way too," Patel said. "And in the case of technology companies, they are all about changing business models so they get it immediately." Axiom clients include Cisco (CSCO, Fortune 500), Sun Microsystems (JAVA, Fortune 500), and Yahoo (YHOO, Fortune 500) on the tech side, and Citigroup (C, Fortune 500), Deutsche Bank (DB) and MasterCard (MA) in the financial services sector.
By leveraging the same tools and work methods of tech startups, Axiom is attempting to strip away all of the inefficiencies of the traditional law practice. Its attorneys are employees who don't earn as much as a big-firm lawyer, but they're still well-paid. They also benefit from saner hours and a greater variety of work. For their part, clients get top-notch legal help at a deep discount.
Both attorneys and clients seem to be happy with the way it's working out so far. The proof is that even in this dismal economy, Axiom, which claims to be profitable, continues to grow revenue at about 40% to 50% annually - 2008 revenue is about $60 million.
While Axiom was seen as the legal oddball when it launched, the success of the company has spawned copycats in the $200 billion legal services industry. The traditional law firm model, which risks being punished by the cratering economy, is in no danger of disappearing, but neither is the army of disgruntled, overworked lawyers willing to jump ship to a place like Axiom.