Expert Insights on Building the In-House as a Service Model

In a recent Platforum9 Session, Tom Bohills, founder of Founders Law, a UK based alternative service provider, shared his experience and insights on building an innovative “in-house as a service” model for legal services. This model bridges the gap between traditional law firm services and in-house counsel, particularly for startups and growing technology companies.

The Genesis of the In-House as a Service Model

Bohills’ journey from big law to in-house counsel at a rapidly growing startup provided the inspiration for this new model. He identified a gap in the market:

“There were so many companies springing up, particularly in London at the time who, you know, had raised a lot of funding. They were dealing with really sophisticated counterparties, but there were only two options they had in the market. It was to go to a big law firm and spend 900 quid an hour and to be passed around by lots of junior lawyers or to hire in house.”

The in-house as a service model aims to provide high-quality legal services with the flexibility and cost-effectiveness that startups and growing companies need.

Key Features of the Model

  1. Flexible Teams (“Pods”): Instead of assigning a single lawyer, Founders Law creates small teams or “pods” for each client. This ensures continuity of service and knowledge retention.
  2. Industry-Specific Expertise: Teams are assembled based on the client’s industry and specific legal needs.
  3. Seamless Integration: Lawyers work as if they’re part of the client’s internal team, using the client’s communication channels and systems.
  4. Scalability: Clients can easily scale their legal support up or down based on their needs.
  5. Access to Specialists: The model provides access to specialist expertise when needed, similar to a large law firm.

Benefits for Clients

Bohills highlighted several benefits for clients:

  • Cost-effectiveness compared to traditional law firms or hiring full-time in-house counsel
  • Flexibility to adjust legal support based on changing needs
  • Access to a team of lawyers with diverse expertise
  • Continuity of service even when individual lawyers are unavailable

The “Pod” Structure

One of the most innovative aspects of the model is the “pod” structure. Bohills explained:

“When a client lands with us, we’ll look at the industry set there. We’ll get a feel for what the volume of work is going to be. So is it going to be very employment heavy? Is it mainly commercial contracts? corporate work? And then we’ll look at the sector. Are they a FinTech? Are they a clean tech space? And we’ll build a little team for them, which is essentially based on the best fit for them in terms of what they need.”

This structure ensures knowledge retention and seamless service delivery, even when individual lawyers are unavailable.

Pricing Model

Founders Law uses a flexible pricing model that combines elements of retainers and time-based billing:

  1. Subscription-based retainers: Based on an initial assessment of the client’s needs.
  2. Time banks: Clients can purchase time upfront and draw down on it as needed.

Bohills noted that this model aims to be fair to both clients and lawyers, avoiding the common pitfalls of traditional retainer arrangements.

Challenges and Solutions

  1. Client Attachment: Clients often develop a preference for specific lawyers. Bohills addresses this by maintaining high standards in hiring and ensuring all team members are personable and commercial.
  2. Lawyer Adaptation: Some lawyers find it challenging to balance private practice and in-house roles simultaneously. Founders Law provides support and allows for an adjustment period.
  3. Precedents and Knowledge Management: While standardisation is challenging due to diverse client needs, the firm provides access to subscriptions and fosters collaboration among team members.

Lawyer Compensation and Retention

Founders Law employs lawyers full-time rather than using a fee-sharing model. This approach aims to:

  • Demonstrate commitment to the team
  • Support work with early-stage clients that might not be as lucrative
  • Encourage a more collaborative environment

The firm uses an innovative profit-share model where lawyers receive a portion of the profit they generate on a quarterly basis. This approach aims to incentivise performance and foster an entrepreneurial mindset.

Conclusion

The in-house as a service model represents an innovative approach to legal services, particularly suited to startups and growing technology companies. By combining the flexibility and integration of in-house counsel with the expertise and scalability of a law firm, this model addresses a significant gap in the legal services market.

As the legal industry continues to evolve, models like this may become increasingly prevalent, offering new opportunities for both lawyers and clients. The success of Founders Law, growing from a “side hustle” to a team of 30 in just a few years, suggests that there is significant demand for this approach.

For lawyers, this model offers a unique blend of in-house and private practice experience. For clients, it provides access to high-quality legal services with the flexibility and cost-effectiveness that traditional models often lack. As the business world becomes increasingly dynamic, such innovative legal service models are likely to play a crucial role in supporting the next generation of companies.

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