Most Big Law lawyers look to regulators for information on how to do their jobs. It is less often that regulators turn to the private sector for legal knowledge needed to do their work.
But that is what has happened at Cadwalader, Wickersham & Taft, where a 10-year journey to create a sort of Bloomberg Terminal for financial regulation has led to subscribers including the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority Inc., big banks, hedge funds and financial institutions, as well as, more recently, other large law firms.
The Cadwalader Cabinet, a subscription service intended to be a “work space” for financial regulatory lawyers, provides daily news and original analysis from Cadwalader partners; access to more than 180,000 documents, including statutes, rules and regulatory guidance; and expert systems that help lawyers draft documents through guided interviews.
The Cabinet is an example of Big Law’s willingness, in fits and starts, to sell legal services in forms other than their lawyers’ time. Akerman, for instance, has offered data breach advice via subscription. Kennedys, a large U.K.-based firm, has an online tool for clients to handle personal injury claims without a lawyer’s direct involvement.
Steven Lofchie, a New York-based partner at Cadwalader who founded the Cabinet, said it has become “an increasingly successful product” with the firm beginning to hire salespeople to expand its subscription base. Subscriptions for the service range from about $3,000 to $100,000 a year, he said, depending on the number of users or the range of services a client selects.
Lofchie said the product is an example of the way lawyers need to now be “proactive” in advising clients, rather than waiting for a phone call and attacking problems on an ad hoc basis.
“That’s one of the ways we’re trying to change the world, I say,” Lofchie said. “Instead of being client reactive, we’re trying to initiate products that we know will help clients.”
That approach has been about a decade in the making and was kick-started by a bad experience Lofchie had with a digital entrepreneur.
One of the nation’s top broker-dealer regulatory lawyers, Lofchie was approached by an online publisher looking to put his book on broker-dealer regulation on the internet. After agreeing to license the book, Lofchie became disenchanted with the process and decided that, ultimately, it wasn’t a deal he could live with.
“They weren’t willing to do the work to present things the way they should be done,” Lofchie said. “And I canceled their license and basically said I should do this myself.”
Lofchie still devotes time to creating and curating the content for the Cabinet and is deeply involved in the constant process of updating the site.
The most recent focus on that front has been expanding the number of “topic pages” on the site from about 100 today to more than 200 by the end of the year. Those pages provide comprehensive resources on topics ranging from broker-dealer regulation to Employee Retirement Income Security Act and tax issues. Another recent update allows users to sync their calendars with Cadwalader-curated events, rule-making deadlines and speeches made by regulators.
Cadwalader has also created more than 50 guided interviews that allow users to draft documents by answering a series of questions that a lawyer would typically ask. Those interviews tell clients, for instance, if they qualify as an accredited investor or whether they can claim exemptions to the Commodity Exchange Act.
The guided interviews are perhaps the best example of one of the Cabinet’s stated goals: To cut costs for clients by reducing the amount of time they need to interact with lawyers.
“The idea is to put things [into an interview format] so that you don’t have to lawyer them,” Lofchie said. “It obviously takes more time to do the design than it would take to do one particular document. But once it’s done, you don’t really need a lawyer anymore.”
Lofchie, who joined Cadwalader in late 2006 to become co-chair of the firm’s securities and financial institutions regulation practice after leaving Davis Polk & Wardwell, said he is optimistic that other law firms will sign up for the service and will feel comfortable using those interviews themselves when it is helpful.
To accomplish that, Lofchie said, “The challenge for us is to be so much better than anything else on the market, and that’s where we’re trying to get to and hopefully where we are.”
As for how this sort of innovation will permeate through the legal market, he is less certain.
“It’s not going to be something where everyone has a magic moment,” Lofchie said. “It will happen unevenly. It’s not going to happen for everybody. But it will certainly be a change. And I don’t think I am unique in that. I feel the product we’ve built is unique.”
Lofchie acknowledged that there are other firms besides Cadwalader trying to build products for clients. But he’s confident that what the Cabinet offers is special.
“I think it’s a really good product,“ Lofchie said. “I [also] certainly think it’s an important part of the way that the legal profession is going to have to move.”