Elevate Services Inc., the — that calls itself “The Law Company,” these days might seem like “The Law Conglomerate.”
Led by founder and executive chairman Liam Brown, Los Angeles-based Elevate has been snapping up rival and adjacent businesses at a furious pace, announcing five acquisitions since November. This month alone, it has announced three corporate purchases: A legal staffing firm in the U.K.; a legal department consulting business in Hong Kong; and an Elevate-like consulting, technology and managed services business known as Yerra Solutions.
Brown is no stranger to building legal businesses, having previously grown his legal process outsourcing company Integreon Inc. to $150 million in annual revenue before it was sold in 2011. At Elevate, his acquisitive itch is far from satisfied. He says the company is interested in acquiring a small to midsize U.K. law firm with practice groups that include corporate, M&A, disputes, intellectual property, compliance and labor and employment.
So what is behind all this buying?
One answer can be found on a single piece of paper that Brown uses to detail the company’s strategy. It includes three broad “value propositions,” roughly 20 “initiatives” and, for each of those, some five or six more specific tasks are detailed. In short, there is a lot more building to do at the 1,200-employee company that Brown said expects to bring in about $80 to $90 million in revenue this year.
Brown doesn’t expect his recent acquisitions to drastically alter the company’s trajectory. He said it may take 10 to 20 years to reach his long-term financial goal to hit $1 billion in revenue. But each piece is required to offer what Brown sees as a full suite of legal services ranging from traditional law firm partner advice to advanced offerings that require artificial intelligence expertise, which the company bolstered through its November purchase of Dan Katz’s LexPredict business.
“We think building a multidisciplinary company is going to be how you solve business problems in the future that have a legal element,” Brown said.
Elevate’s strategy starts with three main “value propositions” Brown says the company offers. Those are: ”Innovate” how legal work is done by law departments to manage risk. “Improve” visibility, predictability, control and costs of law department operations. And to “elevate” services for law firms to improve the value and efficiency they deliver to clients.
Elevate has won the work to back up this strategy. Partnering with its ElevateNext law firm platform, Elevate has changed the way Univar Inc.’s legal department handles portions of its work and how it pays outside counsel. On the law firm side, Hogan Lovells has said it is partnering with Elevate to offer flexible lawyer staffing to clients.
Elevate also has competition in every aspect of its business plan. In its effort to provide managed services for legal departments, a sort of outsourcing for the corporate in-house world, it runs up against UnitedLex. Elevate competes with Axiom and Lawyers on Demand in its flexible lawyer staffing business. HBR Consulting provides the same type of in-house legal department IT, HR and consulting services that Elevate offers.
And in this broader goal to build a multidisciplinary service offering for legal services, Brown said the Big Four accounting firms are a major force.
“We see them everywhere,” Brown said of the Big Four. “In five or 10 years, we think they will be a primary competitor.”
Despite this competition, Brown is not outwardly antagonistic toward other legal service models, especially law firms. He wants Elevate to help law firms overcome their inability to invest in expensive technologies and resources that in-house clients increasingly desire.
“If you’re a midsized firm, are you going to invest in AI and data science? Chances are you’re not, but we can provide that for you,” Brown said. “Are you going to invest in project management so you can provide what you said you would on time and on profit? We can provide that technology for you.”
Brown said corporate legal departments adopting traditional business discipline is fueling demand for the type of multifaceted legal advice Elevate offers. In-house departments are developing performance metrics that align with their business goals, he said.
Still, that shift is happening over a generation, Brown said. Most lawyers today are not interested in tracking how their work impacts specific business goals.
“That’s OK, you just have to face that reality,” Brown said, adding he has to “acknowledge that 90 percent of the legal market wants to buy things by the hour.”
Brown himself got a lesson in that reality during Elevate’s recent acquisition binge. The law firm and auditing firm Elevate hired to manage their acquisitions routinely charged much more than the initial price that was quoted for the work.
Steve Harmon, hired in November as Elevate’s general counsel from his previous position as deputy general counsel at Cisco Systems Inc., suggested a way to fix that problem: Use the M&A services Elevate sells for its own acquisitions. Brown agreed to use the approach for the company’s acquisition of Yerra, which took place in a competitive bidding environment and had a 30-day deadline to close following the companies signing a letter of intent.
Brown said he was “really nervous” about the plan, particularly because of the tight time frame. But he was reassured by Harmon, who had experience at Cisco using Elevate’s services for deals. Elevate took over portions of the work, using its own project management tools and having its staffing business—called Elevated Lawyers—handle much of the due diligence.
Unbundling the work in this way, the outside counsel fee dropped to about $60,000, Brown said. That was a quarter of the typical roughly $250,000 flat-fee quote the company has received from its primary outside counsel, Paul Hastings.
For Brown, it was personal evidence that the shift in purchasing legal services is not just about dollars and cents. It’s a risky, emotional change. The experience also reinforced one argument he makes for Elevate purchasing a law firm: General counsel are still comfortable buying legal services the traditional way. That’s a market Elevate can cater to today, even as it builds a company poised for the next generation of legal services buyers.
“This is difficult stuff, and there is no simple answer,” Brown said. “It’s a journey.”