Featured in Law Quarterly, Denver Business Journal, January 13-19, 2017
At the Denver-based legal services firm Alexius they have an unusual opening line.
“Let us help you figure out what you don’t need a lawyer for,” said Kevin Hein, who was a big law attorney for 20 years and now is a partner at Alexius – a company that aims to bring outsourced legal and financial services to complex business transactions.
The four partners at Alexius – three of whom are lawyers – are careful to say that their company is not a law firm. And it’s not an e-discovery firm. They don’t litigate and they don’t bill by the hour.
They are lawyers, paralegals and financial professionals who see themselves at the intersection of law and business. They specialize in operational compliance – contracts, transaction analysis and regulatory compliance.
And they think they are the first in metro Denver to do this business model.
“We recognize that the value clients want from a lawyer is not merely how well you know the statute. It’s really how is your knowledge and understanding in my industry?” Hein said.
The partners – one who is a certified public accountant – took a page from the New York-based Axiom Law, a firm that began providing legal and financial services to Fortune 500 companies in 2010, but also says it is not a law firm.
Its founder Mark Harris in 2013 told Bloomberg Law — which described the firm as a legal disrupter — that it’s difficult to label the firm because it’s a whole new category. Sometimes they are the provider of the whole transaction and sometimes they partner with big law, which may unbundle services.
“I saw a story about Axiom – it was the first time I became aware of this alternative model,” Hein said.
The key, he said, is that their Denver company is offering predictable, fixed-fee billing. In some cases their cost is from 30 percent to 60 percent less than the total project cost at a big law firm, Hein said.
“The law firm billable hour model does not lend itself to efficiency,” he said. “It’s really the exact opposite. There’s a lot of pressure for every lawyer to find enough time to put on the bill everyday, to make their hours.”
At his last Denver firm, his hourly rate was $600.
In recent years, some Colorado lawyers and firms have ditched the billable hours model and started offering alternative fee schedules. The Colorado Bar Association in November launched its “modern law practice initiative” to spread the word about alternative funding models – that is to offer such things as al la carte services, also called unbundled legal services; charge flat, fixed fees; pay hourly rates but set up a bonus if the case goes the client’s way; or bill by the hour and cap the total fees.
Alexius goes further. Its target market is small and mid-market businesses – those that may not be large enough for in-house counsel, but also cannot afford big law hourly rates, said Andy Elson, a partner in the company and attorney who spent 25 years working in telecom industry as general counsel and in regulatory compliance.
“Part of the differentiator for us, we are not just attorneys,” he said. “We can source a project that has a legal aspect to it. We look at the project and decide 20 percent has a legal aspect, 30 percent has more IP, and the other 30 percent might be financial analysis.”
Some businesses think they have to hire a big law firm because it gives them credibility, he said. That might be true in some areas.
“But that doesn’t mean everything has to be done by the law firm,” he said.
Alexius has partnered with big law to do some of the legwork for a client while the law firm attorney then closes the deal.
“We do a lot of M&A (mergers and acquisitions) support,” Hein said. “The big shining document that matters in the M&A transaction is the purchase agreement. But there is a ton of background work that goes underneath it – schedules, closing documents, diligence — that stuff does not have to be done in a law firm.”
The partners at Alexius don’t know if they will transform the legal landscape. However, the company is finding a market. It opened in 2013 and has worked with more than 150 clients.
“It’s been a very positive response,” Elson said. “We are giving them the opportunity to understand legal in a different light.”
Monica Mendoza covers banking and financial services, legal services, retail, the economy and economic development, and sports business. Phone: 303-803-9230.