Law Firms Branch Out Beyond Lawyers in Bid to Beat Out Rival Advisers

Behavioral scientists, data experts, journalists and cops—four professions that are being brought together in, of all places, law firms. Traditionally staid law practices increasingly want to be more things to more clients, particularly in the competitive risk and compliance space.

Facing competitive pressure from professional services firms and from clients that want to solve more business problems in one stop, law firms—among the most venerable American business institutions—have begun to branch out.

“The law profession, traditionally, has been fairly traditional and not super fast at change,” said Zachary Coseglia, a lawyer at Ropes & Gray LLP. “I think that law firms are gradually appreciating that our clients desire more than just traditional legal services.”

Zachary Coseglia
Photo: Ropes & Gray LLP

Mr. Coseglia was involved in founding the R&G Insights Lab, an analytics and behavioral science consulting practice attached to the firm. Among other offerings, the group helps clients craft compliance training meant to outperform the slide decks companies typically offer their employees, with their droning narrations of dos and don’ts.

That team has scooped up a Stanford University-educated doctor of social psychology to help inform the behavioral science behind the work—an unusual hire for any law firm, let alone more than 150-year-old Ropes—and recently hired a journalist to aid in its storytelling efforts, Mr. Coseglia said.

The result is more engaging and thought-out strategy and training, and with a scientist among the staff, the ability to measure whether efforts to develop a compliance-oriented culture actually work, the firm says.

“We went out and we sought folks who had that experience who could bring a completely different kind of point of view, career perspective to the table,” Mr. Coseglia said. “We really look, in all of the hiring that we’ve done, to find folks who are naturally creative and have a disruptive sensibility.”

Elliott Portnoy, chief executive of law firm Dentons, one of the world’s largest law firms, said client demands and competitive pressure pushed his firm to similarly look beyond traditional offerings of litigation- and regulation-focused legal services.

“Clients increasingly were coming to us with a problem that they needed to solve and they really didn’t much care how we solved it,” Mr. Portnoy said. “Very often they were looking for something that was beyond the traditional tool kit.”

Dentons has drawn from outside the legal discipline to offer services clients want. For example, it employs journalists, law enforcement officers and intelligence personnel to help create a risk report it builds for clients and firm staff. Last year, it started a multidisciplinary advisory firm, called Dentons Global Advisors, that advises its clients on geopolitical risk, crisis management and other areas outside normal legal practice.

The firm also has made forays into complex technology products, taking stakes in compliance software companies. Dentons owns a stake in Libryo Ltd., a regulatory compliance software maker, and offers a software product that proactively gathers intelligence on potential regulatory risks.

Another large law firm, DLA Piper, has developed an in-house litigation analyzer, powered by artificial intelligence, that looks at data sets of litigation history to try to predict how a particular claim might unfold, using the large stores of data to take some of the uncertainty out of litigation risk. The development of the tool was spearheaded by a DLA Piper lawyer who went back to school to get an advanced degree in data science.

Right now, the tool is being used to predict outcomes for a client facing mass actions, a class of litigation that includes, for example, multitudinous claims related to asbestos exposure. The tool can use reams of past outcomes to predict, for example, what kind of figure a particular plaintiffs’ firm might settle for, giving the firm a more concrete analysis than it might have otherwise.

The firm then has an advantage in negotiations, said Loren Brown, a partner who chairs DLA Piper’s disputes practice. The firm has considered trying to adapt the tool to draw on anonymized data sets containing the litigation experiences of more than one client, and expand it to other arenas—for example, it could monitor and identify potential compliance risks, he said.

“We’re getting fairly compensated for that technology as a snap-on to the legal services we’re providing,” Mr. Brown said.

Stephen Reynolds
Photo: Baker & McKenzie

The move to make a law firm into something a little more can meet resistance from lawyers, Mr. Portnoy from Dentons said. But he suspected his firm faced less rebellion in the ranks than some rivals because the firm holds itself out as a challenger brand, he said. Lawyers looking for a more “staid” environment are welcome to leave, he added.

With firms increasingly branching out, the common crutch among lawyers tripped up with a technical challenge—“Don’t look at me, I just went to law school”—won’t cut it for long, said Stephen Reynolds, a partner at the law firm Baker & McKenzie LLP.

“The client tolerance for that is really thinning,” said Mr. Reynolds, who has a background in software development. “Lawyers and law firms are becoming more open to bringing in people from other disciplines—maybe we don’t do this all ourselves.”