American Lawyer chief European correspondent Chris Johnson meets regularly with senior figures in the legal world at their favorite breakfast joints to chew over the industry’s tastiest talking points. Johnson’s guest this week is Adam Shutkever, COO of DLA Piper–backed fixed-fee legal services company Riverview Law. On the menu: alliances, alternative business structures for law firms, and one unanswered question.
It’s a tough life. For the second column in succession, I find myself back at one of London’s top breakfast spots: The Delaunay. After Slaughter and May senior partner Chris Saul chose it last time out as the venue for a discussion about the future prospects of his firm’s “Best Friends” network, my return to the grand Aldwych café finds alliances once again on the menu.
This time, I’m meeting Adam Shutkever, COO of innovative U.K. fixed-price legal services business Riverview Law—part of a new breed of nontraditional legal practices at the forefront of the fast-evolving U.K. marketplace. Riverview last week announced a tie-up with DMH Stallard, a 100-lawyer commercial law firm based in the southeast of England.
At least I hope I’m meeting him: Our scheduled time has come and gone and he’s nowhere to be seen.
“Trains,” Shutkever says as he finally arrives, his tone belying a mixture of frustration and resignation that will be painfully familiar to rail commuters the world over. “They always seem to go wrong when I have a meeting to get to.”
After ordering drinks—black coffee and an orange juice for him; cappuccino for me—Shutkever explains the thinking behind the alliance with DMH. “It’s a reflection of the growing demand we’ve been seeing, particularly from major corporates,” he says. “There’s absolutely no doubt that we’re in the right place at the right time—customers are crying out for a different approach in the delivery of legal services. The alliance just takes us on that little bit further as it broadens the areas of expertise we can offer to those customers.”
Founded in early 2012 with financial backing from DLA Piper—the global giant holds a 21 percent stake in the business, while DLA joint CEO Nigel Knowles is its nonexecutive chairman—Riverview specializes in providing fixed-fee litigation and legal advisory outsourcing packages for small and medium-size companies. Unusually, for a U.K. legal services provider, it retains the services of both attorneys and barristers—specialist advocates who are typically appointed by law firms to represent clients in court, and who generally operate independently from attorneys as part of stand-alone "chambers." (Disclaimer: DLA’s U.S. cochair Roger Meltzer sits on the board of ALM Media, the parent company of The Am Law Daily and The American Lawyer.)
But Riverview quickly realized the need to form an alliance in order to meet rising levels of demand for more specialist and complex advice, Shutkever says: Referring such work to other law firms resulted in a loss of business that he puts at “several hundreds of thousands of pounds." Shutkever and Riverview CEO Karl Chapman scoured the market for suitable firms that were able or willing to work within the company’s fixed-fee structure—something Shutkever admits is “not for everybody”—before beginning discussions with Brighton-based DMH last August.
The nonexclusive alliance will cover areas that include dispute resolution, M&A, and real estate, Shutkever adds. Riverview will direct the majority of its referral business to DMH, which in turn will be able to offer its clients access to Riverview services. The pair are developing a range of new fixed-fee products that are due to be launched to the market in the coming months.
(As revealed by The Am Law Daily, Riverview established a small New York outpost last June that offers fixed-fee U.K.–law advice to U.S. clients. Shutkever says the company is now “actively looking” at launching a similar base in China, and is also investigating other markets throughout Asia. A number of offshore jurisdictions, which are relevant to the white-collar criminal defense work of Riverview barristers such as Richard Lissack QC, Mark Rainsford QC, and Andrew Spink QC, are also under consideration.)
A waiter arrives with our drinks and takes our food orders. I’m sorely tempted to revisit the restaurant’s unusual yet delicious oatmeal soufflé, which regular readers may recall colored me suitably impressed on my last visit, but I’m currently in training for the London Triathlon this July, and so reluctantly decide to go for the slightly healthier option of scrambled eggs on toasted sourdough. (ALM has entered a team for this year’s Olympic-distance race, comprising a 1.5km open-water swim, a 40km bike leg and a 10km run. We are raising money for Sightsavers—a British charity working to treat and prevent avoidable blindness in developing countries—and I will be blogging about the event on The Am Law Daily. Those that wish to sponsor us can do so here.)
Shutkever, who obviously has no such dietary qualms, orders double eggs benedict.
“I really shouldn’t—my body is a temple,” he laughs. A keen cyclist, Shutkever has just returned from a long weekend of riding in the Spanish island of Mallorca. (He previously completed the grueling 900-mile ride between the U.K.’s two vertical extremities, Land’s End and John O’Groats, known by cyclists simply as “LEJOG.”) “It was great and I really felt reasonably fit, but I’ve been back here a week and I can already feel the weight going back on.”
Riverview currently divides its services between one-off “event work," such as a piece of litigation, and annual or multiyear contracts, which break down into three tiers. The first, for businesses with up to 50 employees, starts at £2,400 ($3,650) per year; the second is a bespoke service for companies of up to 1,000 employees, with prices typically over £20,000 ($30,000) per year. The third-tier service allows larger corporations to outsource their in-house legal function to Riverview on a multiyear contract.
While Shutkever says almost all of its clients opt to retain Riverview on a fixed-fee basis, the company does act for a small number that choose to work through hourly billing. “The vast majority of the work we do is fixed-fee, but we’re not on a crusade,” he says. “All we’re doing is matching our services to our customers’ requirements.”
Our food arrives. “Death on a plate,” Shutkever says, guiltily.
In addition to establishing an alliance, Riverview is also currently in the process of converting its corporate structure in an attempt to simplify the way in which it operates.
Riverview Law is actually the trading name for a holding company called LawVest Limited, which is owned by shareholders that include DLA, Shutkever (9.6 percent), Chapman (7.5 percent), and Knowles and five other senior DLA partners (less than 1 percent each), according to 2012 Companies House filings. None of these investors are getting rich from their investments so far, it seems. LawVest’s publicly filed accounts also showed that it lost £3.2 million ($4.9 million) in its first 16 months from February 2011, with revenue of just £170,000 ($260,000) over that period. Shutkever says that the company didn’t actually start trading until March 2012, however, and that such a performance is “precisely what you’d expect to see with an early-stage business that has been well-capitalized.”
While LawVest owns and markets the Riverview brand, it remains separate for regulatory reasons from the two entities that actually provide the legal services: Riverview Solicitors or Riverview Chambers. That could soon change.
In April, the company submitted an application to be among the small-yet-growing number of legal practices to convert to an “Alternative Business Structure” (ABS)—a radical new setup that permits law firms to be owned and managed by nonlawyers. (The ABS law forms part of the Legal Services Act, which was passed in October 2011 after lengthy delays and also permits U.K. law firms to accept external equity investment for the first time. Top 30 U.K. firm Irwin Mitchell, which converted to ABS in August 2012—and whose group CEO John Pickering will be featured in a forthcoming installment of Continental Breakfast—is the largest law firm to have made the switch so far.)
“It will give us a greater degree of flexibility in the way that our services are delivered, and allow us to structure our whole operation in a more streamlined way,” Shutkever explains. “From the customer’s point of view, very little will change, but it will make things much more straightforward for us.”
Converting to ABS would allow Riverview to own its existing arm of attorneys. It would also present the option of acquiring additional legal practices.
“Who knows,” says Shutkever, somewhat evasively. “At this point in time, we’ve got a very long pipeline of business prospects to deal with and that’s really what we’re focusing on. In the future, if there’s any particular strategic direction that looks right for us and our shareholders, we’ll give it serious consideration, but right now, it’s all about growing the business.”
What about DMH? Is the alliance a precursor to what could be the first merger between an ABS and a law firm?
“We’re very excited about the alliance, but at the same time, we’re both independent firms and are concentrating on developing our pipeline of business.”
That didn’t really answer the question, so I try again. Is the prospect of the two firms merging something that has even been tentatively discussed?
“We’ve concentrated on market-testing and putting together our strategic alliance.”
In an attempt to avoid a Jeremy Paxman moment—the BBC broadcast journalist famously asked Conservative politician Michael Howard the same question 12 times in succession during a televised interview in an attempt to get a direct answer—I ask one final time.
Is it something that you’ve discussed: Yes or no? A plate smashes somewhere in the background.
“As I say, we’ve concentrated on how we’re going to work together.”
So, that’s a yes, then?
Shutkever smiles. “That’s what we’ve concentrated on.”
A waiter comes over to collect our empty dishes. So at least something was cleared up.
Breakfast for two came to £35.94 ($55), with service.
Chris Johnson is The American Lawyer’s chief European correspondent. Reach him at firstname.lastname@example.org. Follow him on Twitter at @chris_t_johnson.