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Ten years ago, law firms contained partners, associates and support staff. It’s not that simple anymore. Law firms are spinning off operations into “consulting arms,” “support partners” and “affiliates.” No matter what they’re called, the result is law firms are looking much more like multidisciplinary practices. In early November, Winston-Salem, N.C.-based Womble Carlyle Sandridge & Rice spun off its ancillary services group into a limited partnership called FirmLogic, with about 275 employees. FirmLogic includes some of Womble’s former support staff plus medical experts and engineers to act as trial consultants. The limited partnership will continue to provide document coding and litigation support services for Womble, as well as other firms and corporate legal departments. Two legal consulting companies, Atlanta-based Holland Shipes Vann Legal Consulting Services and Houston-based Enhanced Systems & Solutions, joined Womble Carlyle’s ancillary services group earlier in the year. Womble Carlyle managing partner John L. W. Garrou says the firm spun off FirmLogic because of an increasing need for firms to provide more services. “Law firms have finally figured out that if everyone else is doing everything else, and we only do what we do, we’re in big trouble,” he says. Also, Garrou says the spin-off can increase profits for Womble Carlyle. Last year, the ancillary services group served 2,000 clients and produced $23 million in revenue, as part of Womble Carlyle’s total revenues of $129 million, according to the Wall Street Journal. Hassel L. Parker, FirmLogic’s president and CEO, projects FirmLogic’s revenues next year will hit $30 million. For now, Womble Carlyle will keep about a 90 percent equity stake in FirmLogic, says Garrou. Garrou says increased revenue is a motivation for many firms that create separate entities. “They are looking for other sources of revenue without hiring more lawyers,” he says, adding that the existing law firm model “is not very attractive with what associates are being paid.” Parker says FirmLogic has trademarked the term “Practice Support Partner” to describe the entity and explain its relationships with law firms. Most of FirmLogic’s staff is in Winston-Salem. Twenty to 30 employees will work in each of FirmLogic’s other three offices in Atlanta, Houston and Raleigh, N.C. George T. Manning, partner-in-charge of Jones, Day, Reavis & Pogue in Atlanta, says some clients hope to save by consulting with ancillary service firms. Firms such as FirmLogic, he says, are able to cut costs because the business is not funded solely by client payments. Manning notes that FirmLogic is embarking on what might be a difficult journey. “The jury consultants’ market, for example, is a very competitive field with a substantial number of high-quality law firms” already established in this arena. “It seems to me that [FirmLogic] is entering late into a very competitive field,” Manning says. Atlanta’s Morris, Manning & Martin also launched a consulting subsidiary this year. The subset of its technology practice, eFacilitator evaluates the financial and operational needs of start-up clients and matches them with sources of funding, management and professional services. In January, Tampa, Fla.-based Holland & Knight created a separate consulting subsidiary, Holland & Knight Strategic Business Solutions. The entity provides marketing services to clients, particularly Internet start-ups. In 1999, Atlanta’s Powell, Goldstein, Frazer & Murphy created a practice area called Eagle Partners which combines specialties such as intellectual property, employee relations and real estate to serve high-growth clients. The team offers legal services and attempts to connect clients with venture capitalists. PoGo’s managing partner, Armin G. Brecher, says the group sometimes trades services for equity in the companies it represents.

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