Lexpert Magazine

LEXPERT MAGAZINE | JUNE 2016 73 | IN-HOUSE ADVISOR: FUNDING LEGAL INNOVATION | Canadian legal market, Cognition "has been entirely bootstrapped" by the existing rules they must operate in. "We have been significantly limited in our potential growth due to the constraints placed against the allowance of non-legal investors. We have many future strategy plans that include the further adoption of technology to enhance the speed and ef- ficiency of our service delivery. However, outside investment would allow us to take on a larger number of such projects and build our management knowledge base to ensure their successful rollout." As it turns out, Cognition didn't wait around for the law society's answer. In January, the firm did a deal with US-based Axiom, a deal structured around law soci- ety rules. Cognition split its business into two: Lawyers who act as short-term advisors for companies with general counsel and law- yers who act as short-term advisors for busi- nesses with no in-house department. e in-house division is no longer struc- tured as a law firm; Axiom Global Canada is a business and its lawyers are a mix of in- dependent contractors and employees. Milstone says as long as the actual person delivering the legal advice is a licensed law- yer, there is no requirement that they work for a law firm. So why don't more law firms structure themselves as corporations with equity holders instead of partners? Milstone says history, in short. "ere were a lot of advan- tages to being a law firm in terms of that's the traditional model that clients were traditionally used to, and were historically familiar with." Milstone expects young new firms that plan to integrate technology into their delivery models to increasingly choose to structure themselves as corporations "especially as the delivery of legal services melds and combines and in some ways is even overshadowed by process and project management and the use of technology in managed services." Does that make the law society debates over alterative business structures obsolete? He says not necessarily, because it would be something of a nightmare for existing law firms that want to raise new sources of capital to change over from partnerships to corporations just to get around law society rules. Even if some of them look like they were written using a quill. Meanwhile, innovation marches on. In- house counsel are going to benefit from all the developments flying off the drawing board. If anything, it appears that law firms may be the ones that miss out as younger, nimble and better-funded business struc- tures take exciting new technologies and apps directly to their best clients. INNOVATORS' ADVICE FOR IN-HOUSE COUNSEL Thought leaders in legal innovation offer advice for in-house counsel looking to innovate: "If they're fulfilling their mandate, which is basically to treat the company's money as if it were their own, then it really is critical that the new-world general counsel be stewards of all these different options. It's really their job to calibrate all these different service models, different technology models, new processes that have recently become available. The CEOs, the board and the companies are really relying on them to use a better variety to create the most optimum and efficient delivery of services for the company." -– Joe Milstone, Co-founder of Cognition LLP "You know the way Scotiabank says you're richer than you think? I would tell the in-house Bar they have a greater bargaining position, both in terms of pricing but also in the level of innovation and service delivery that they're getting from their providers. They are entitled to a better deal." -– Jason Moyse, Industry Lead at MaRS LegalX and Manager, Legal Business Solutions at Elevate Services "Keep your eyes open because we will see in the market, shortly I think, many ways to save money and save time and to do things in a way that's more familiar. All that speaks to the value your law branch brings to your company." -– Fred Headon, Assistant General Counsel – Labour and Employment Law at Air Canada "I'd say the same thing to lawyers that are in-house that I'd say to anyone these days: The one constant in life is change. It's a very competitive world, if you're not looking at how to do what you're doing today in a significantly better way tomorrow then you've already fallen behind." -– Chris Bentley, Executive Director of the Legal Innovation Zone at Ryerson University IN HOUSE INSIGHT

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