The Story of First Law

Internet Newsletter for Lawyers - Monday 4th July 2005

The story of First Law

The idea behind First Law was simple and grew in my mind as I went about my everyday practice back in the late 1990s. As a commercial property lawyer working in the City during the recession I had to learn the art of haggling for almost every new instruction I received. Clients expected me to show some competitive advantage which gave them a reason to choose me in preference to anyone else. This often came down to offering the lowest price, but I knew it wasn’t as simple as that.

Clients would also ask me to recommend other lawyers who specialised in different areas. The first question was nearly always who is good and then the discussion would turn to price. It struck me that every client should ask these questions before they instruct a lawyer. But where could clients get such independent advice? Obviously a practising solicitor would not be able recommend anyone outside his or her own firm, unless perhaps it involved a legal discipline that the firm did not practice in. Even then, the advice would be limited by the extent of that solicitor’s personal knowledge. Legal directories tended to focus at the top end of the market and none offered information on price.

So I conceived First Law as a specialist independent advisor to clients. Instead of relying on ad hoc recommendations and incomplete information, clients would be able to use First Law to help them select the most appropriate lawyers at the best price.

We started off by building an interactive website. The concept was to create an online exchange where clients could post their instruction and firms could bid for the work. The fact that we were doing this on the web was in some ways incidental. We were offering a completely new service. However, back in 2000, amid all the hype about Y2K and dot coms, it was difficult for some commentators to distinguish between the substance of our service and the medium through which it was supplied.

Our big breakthrough came in 2001 when the new in-house lawyer at the General Medical Council made a speculative enquiry about our tendering expertise. The GMC was seeking lawyers to advise on the conduct of formal complaints against doctors. We won the work and 15 law firms submitted their tenders in a pre-specified electronic form via the website. This ensured uniformity of presentation and enabled easy comparison among the submissions. Glossy brochures, the hallmark of many so-called beauty parades, were not allowed and paperwork was kept to a minimum. Mills & Reeve and Addleshaws won the work.

It was then that we realised our service could most easily be described as legal tendering. The website underwent a facelift and we began to standardise our tender processes. It became apparent, though, that a lot of the documentation we were using could not be integrated into our existing online systems without a major rebuild. We did not want to lessen the gradient of our steep learning curve at that time so we decided to continue with our research and development using offline methods, while maintaining email as our main form of communication. So for the next three years the website acted more as our shop window and a means for clients and law firms to verify who we were.

Like any business we had to market to win new work. Our challenge was to target clients who were already contemplating a panel review or a tender exercise, rather than indiscriminate mass marketing. We did this by monitoring tender notices issued by public sector organisations in trade journals and we soon built up a client base of local authorities, regulators and universities.

We found that law firms were always willing to participate in tenders that we were involved in because, for them also, it was a very effective form of targeted marketing. The only wasted costs in an unsuccessful tender are the resources put into preparing the tender submission and a major benefit was the feedback they received which could help them to perform better in a future tender.

After running about 100 formal tender exercises, we have worked with over 200 different law firms on a wide range of legal instructions. We judge the success of a tender not simply by the outcome but also by ongoing performance. For example, Eversheds, Trowers & Hamlins, Collyer-Bristow, Hewitsons, Sharpe Pritchard, Matthew Arnold & Baldwin and Field Fisher Waterhouse have all won tenders with significant retainers that provided both the law firm with a steady cash flow and profitable business and the client with a reliable service within budget.

Our experience over the last five years has enabled us to put together a tool kit of tender documentation. It is designed to be of universal application and it includes what we consider to be the best elements of every tender we have ever conducted.

Accreditation Scheme
Looking to the future, First Law is campaigning to standardise the way that in-house lawyers manage outsourced legal work. We have built a brand new online version of the tool kit that will contain detailed pricing and service information about law firms as well as key tender documentation. The information that law firms submit online is password protected and can only be viewed by authorised members of each firm and by verified in-house lawyers. Law firms who are members of the Scheme will not be able to view each others’ listings, thereby avoiding the disclosure of confidential and commercially sensitive information to competitors. In-house lawyers will use the database to identify those practices that they wish to invite to tender and instruct for new work.

We are calling the new service an Accreditation Scheme, as at its core it comprises the classification of credentials, implicit in the dictionary definition of this term. The hope is that the Scheme will save firms marketing time and resources as an entry on the database will provide immediately accessible and comprehensive practice information, pricing and service levels to a target audience of in-house lawyers.