I recently had the chance to speak with Nicholas d’Adhemar, founder of Apperio (www.apperio.com), about law firm-client tension and the role technology plays to reduce this.
Erin Hichman: Can you share a brief background of yourself?
Nicholas d’Adhemar: After working as a lawyer in both private practice and in-house, and in private equity, I formed Apperio*, meaning to ‘reveal, or make clear’ in Latin, in 2012 out of frustration at the opaque nature of legal fees and the lack of visibility over invoices. Apperio has since grown from an idea into a movement, tracking more than 1.4 billion GBP of legal fees, showing how digital technology can increase accountability and trust, fostering better relationships.
*Apperio was initially known as Legal Tender, but rebranded and shifted focus towards monitoring and analytics
Erin Hichman: It’s no secret that there is a lot of tension between law firms and their clients stemming from the billing process and system. Why is this?
Nicholas d’Adhemar: There’s no getting away from the fact that tension builds up between both parties from the legal billing process. It’s due to a combination of billing on an hourly basis, at hundreds of pounds an hour, combined with a lack of transparency. It is not uncommon for clients to receive unexpected invoices, containing surprise fees, without any justification for the additional costs. You can only imagine the frustration and conflict this results in. Sometimes law firms charge for work that just doesn’t seem to justify the cost but there’s no easy way to detect this. Currently, it’s hard for most legal departments to track their legal spend closely enough to detect overbilling. Overbilling isn’t the only issue – it also undermines the legal department’s ability to effectively budget, forecast and run their department efficiently.
Erin Hichman: What will it take to ease this tension?
Nicholas d’Adhemar: The billable hour itself is not the problem. In situations of uncertainty, it is often the most sensible approach for both firm and client. Nor is the issue about the rates lawyers charge. If the law firm does a good job, clients are often happy to pay a reasonable fee. The real issue is transparency, which is what is lacking today. Law firms and clients are in desperate need of better tools to enable them to collaborate. Law firms need to get better at expectation management and the clients need a better view of the work being done. By obtaining greater visibility of their legal spend General Counsel will feel more comfortable and in control of their spending and maintaining budgets.
It’s vital that a common language is created for law firms and clients in enabling the communication of progress and billing, as well as monitoring and comparing lawyers work and identify areas for improved efficiency. Lawyers can struggle to communicate the complexities of their work which is why collaboration is crucial for both parties to get the desired outcome that is fair for both parties.
When all these components come together a sense of trust is formed, and relationships are strengthened between the two parties.
Erin Hichman: There seems to be an influx in legal technology investment – what is the momentum behind this?
Nicholas d’Adhemar: In simple terms, the legal industry is lagging behind other sectors when it comes to technology investment, so a big part of the momentum today is due to the urgent sense of a need to catch up. Within the industry, fierce competition and increased client expectations are also driving changes. Many of the outdated manual, inefficient ways of working are no longer an option if firms want to keep their clients happy. By using the advanced technology available today, they can create more sophisticated services as well as a more efficient turnaround of projects. Clients have become more tech-savvy and increasingly seeking to leverage their purchasing power through the use of panel reviews. When it comes to comparing firms they will be looking for firms who can demonstrate they are embracing technology to deliver a better service. Automation can save law firms and their clients vast amounts of time, so they can focus on higher value work. Technology is no longer something they can ignore, and the results speak for themselves.
Erin Hichman: What do you see as the biggest disconnect between the legal industry and technology?
Nicholas d’Adhemar: It’s no secret that the legal industry has been slow to adopt new technology.
First, the model of the billable hour, and the unfortunate incentives it creates, has trapped many law firms in what is often called the “innovator’s dilemma”. If a firm invests in technology that makes them more efficient, it will reduce their revenues. However, if they don’t innovate then eventually an innovative rival will undercut their business model. It takes courage and commitment to embark on disrupting your own business model in the short term, by being more efficient, in exchange for long-term security.
Second, we still see a big disconnect between the people that ultimately use the software versus the people that purchase it and build it. We believe software should be built starting with the user and working backwards. Users should not need to be trained on how to perform basic tasks in software built for them – users just do not have time for this today. Today, too much software is bought based on feature checklists, and decisions taken by people who are not the end users, at the expense of user experience considerations. Counterintuitively, it takes a tremendous amount of design effort, prototype work and user involvement to create software that is easy to use and not intimidating. This attitude that is widely understood in the consumer technology space is only now starting to appear in B2B products in the legal industry, and SaaS players are at the vanguard of this movement.
Erin Hichman: How does Apperio improve the legal industry?
Nicholas d’Adhemar: Apperio brings transparency to the legal function for the first time. Apperio’s secure, cloud-based analytics solution gives both companies and the law firms that work for them accurate, actionable and real-time insight into legal spend – making sense of every firm, matter, task or billable hour.
We’re changing the way law works. By making work-in-progress visible and giving General Counsels comprehensible, real-time insight, we’re helping them hold their legal panels to account. Equally, we’re helping pioneering law firms to demonstrate value, develop transparent new business models, get paid faster and retain their clients for longer.
For the first time, GCs can become a strategic contributor to their business. Data for transparency, accuracy and actionable insight. Every other branch of corporate life has it. With Apperio, the legal team has it, too.