Axiom has been blazing new trails in the legal industry since its launch in 2000. What began as an upstart legal services provider coyly straddling the law firm/service company divide has become a trusted global provider to half of the Fortune 100 legal departments. Axiom was initially an enigma to the legal establishment because its organizational structure, business model, and vision of legal delivery were new and not easily categorized.
Twenty years on, the industry remains curious about Axiom. The company’s spin-offs of two profitable business units, the SEC-mandated quiet period that preceded its inchoate public offering, and the significant capital investment from Permira, a well-known private equity company have caused many in the industry to ask, “What’s Up With Axiom?” Short answer: quite a lot– and the news is positive. Revenue is up. Outside investment is up. Total lawyer population is up. Diversity is up. And, Axiom For Talent, the company’s proprietary technology platform, is up and running.
Axiom’s customer base, headcount, global footprint, brand, revenue, war chest, and selectivity confirm the efficacy of its model. Both the supply and demand sides of the market have embraced it. The bigger story, though, is the strategy behind Axiom’s recent moves and what it reveals about the importance of models, capital, and differentiation in a maturing legal industry.
Axiom’s Journey: Changing a Monolithic Marketplace
Axiom’s recent moves reveal how the company is positioning itself for a maturing, scaled legal services marketplace where differentiation is key. To understand the arc of Axiom’s journey, it is instructive to briefly revisit its early days and the legal industry at that time.
The legal profession was the legal industry at the turn of the millennium. The pyramidal law firm partnership model was in the midst of a three decade-long run of escalating profitability. The hierarchical, bill-by-the-hour model was ideally suited for the labor-intensive, “no stone unturned”, value- insensitive approach law firms applied to all tasks. So too were ever-escalating attorney billable hour quotas and rates.
Firms grew and prospered as their clients went global. There was little differentiation between them; most were big box stores that sold the same thing: legal expertise. They shared common structures, models, and cultures. These foundational elements—and firm hegemony over legal services– were safeguarded by self-regulation prohibiting “non-lawyers” from owning, managing, or investing in law firms .
This is a snapshot of the legal landscape when Axiom launched.
Removing Lawyers From The Traditional Partnership Model
Axiom recast legal practice by extracting experienced, pedigreed attorneys from the partnership model, affording them a sophisticated practice experience from an entirely different structure, economic model, and culture. Axiom reimagined the traditional legal delivery paradigm, creating an agile, flexible model that bridged the in-house/outside counsel divide. Its lawyers were seconded to in-house legal departments, enabling them—and Axiom—to better understand the client/customer’s business, culture, pain points, and risk tolerance, among other things. For in-house departments, the highly-vetted, experienced, “hit the ground running” Axiom lawyers provided on-demand, custom-tailored resources without the budget drag and ramp-up time of full-time employees. The agility, flexibility, and collaborative elements of Axiom’s model were new to the legal marketplace on the supply and buy sides. The Axiom model also tapped into an under-utilized and highly-qualified segment of the attorney population ostracized from and/or disinterested in the large firm grind. This enabled Axiom to create a selective, organically diverse, collegial, collaborative, and highly-skilled talent pool that was egalitarian, devoid of firm politics and origination squabbles, and focused on practice excellence and customer satisfaction.
Axiom’s carefully vetted attorneys were managed by the in-house departments where they seconded. The secondment model afforded Axiom lawyers direct customer contact and honing of skills, a deeper understanding of customers’ business, and a flexible schedule. Axiom brought the “gig economy” to law before the term came into popular use. Axiom lawyers engaged in practice activities but delivered them as a business service. Its model shifted risk-retention to customers, enabling Axiom to bill its lawyers at lower rates than firms that retain risk. The Axiom model also stripped out cost escalators with no customer value—expensive real estate, partner tribute and lavish expense accounts, etc. The savings were passed along to customers and reinvested in Axiom’s talent base.
Axiom’s decision to operate as a service company, not as a law firm, enabled it to circumnavigate firm ownership and capital restrictions. Axiom early on raised significant capital to invest in its talent pool, technology, and brand. It took a long-term approach; its lawyers and buyers were both treated as customers. This diverged from the firm partner/employee divide and the widespread reluctance of older partners to reinvest in the firm.
Innovate Models, Alignment, And Tough Yards
Axiom was a small blip on law’s radar screen during its early years, even as it was laying the groundwork for the powerful brand it has become. FisherBroyles, a law firm, also challenged the traditional partnership model and launched early in the new millennium. FisherBroyles had a different structure, economic model, and culture than traditional partnership firms. Like Axiom, it created a collegial, flexible, profitable, client-centric delivery model designed to better align the interests of lawyers, firm, and clients. The firm has a flat organizational structure–all lawyers are partners. Its economic model was designed to create an internal marketplace where lawyers—not the firm—set rates and retain a significantly larger portion of collected fees. FisherBroyles lawyers have no billing quotas and can work flexibly. They are not subject to mandatory retirement and have strong financial incentives to collaborate with colleagues.
Axiom and Fisher Broyles challenged the traditional legal delivery model, reimagining and realigning the provider/buyer perspectives. Each has stuck to its vision, structure, model, and culture, highlighting the importance of the model in the delivery of legal services. Each has experienced significant organic growth—and low turnover—by creating a model that works on the supply and demand sides. Axiom and FisherBroyles have demonstrated that the distinction between law firms and legal service providers is not nearly as important as the provider’s model, culture, alignment with its resources and customers/clients, and customer satisfaction. In the age of the customer, that’s what matters.
Axiom Today: Talent, Technology, Customer Focus, and Scale
Axiom’s past three years of fast-paced change have left the company with a differentiated, clear path forward. Its ambition is to solidify and scale its standing as the legal industry’s preeminent legal talent company. This involves: expanding its already deep on-demand legal talent pool; continuing the build-out of “Axiom For Talent,” its LinkedIn for lawyers-like technology platform; expanding its use of data captured from that platform; leveraging its process expertise; drawing from the substantial capital investment and expertise of Permira to expand and scale its global footprint and delivery capability; and drawing from the expertise and networks of its powerhouse Board of Directors.
The replacement of long-time CEO and co-Founder Mark Harris in 2016 by seasoned tech executive Elena Donio is confirmation that talent management today involves more than human resources alone. It also requires technology and process expertise. Harris, a former BigLaw associate and the principal architect of the Axiom model, was the ideal CEO and brand face when legal expertise—albeit deployed from a new model—was the crux of Axiom’s offering. Talent management is now resource, tech and process-driven. Donio’s success in Silicon Valley tech circles made her an ideal leader for the new-age Axiom, where she is ushering in a new tech-enabled vision for legal talent management.
“What if,” asked Donio, “ a legal platform could capture every lawyer’s skill sets, expertise, and practice area-experience? What if it could capture work in specific industries, regions, and micro subsets of each? What if it could capture availability for projects and preferred working arrangements? What if that new platform allowed for greater career self-determination for lawyers while also enabling legal departments to identify the best/most appropriate lawyers for their needs regardless of provider affiliation? And what if all the information collected by that vertical platform was converted into data to better inform and match appropriate supply to demand, while also creating new skillset and practice taxonomies for the industry?”
According to Donio, “It’s not what if – it’s when. We happen to be building what we believe is the definitive legal platform. We’ve actually been building it – or its hand-crafted foundational blocks – for years, in the form of a curated talent marketplace that has (manually) matched thousands of lawyers to thousands of client engagements. It’s those decades of manual/hands-on work that have given us the experiential knowledge, permission, and ability to digitize.” Donio maintains that the conversion from manual to a tech-enabled process is not only scale-fueling for Axiom but also has industry-wide implications. She posits that “the legal verticalization of digital platforms will create more meaningful and informed engagement for all lawyers.” It will, of course, also be a boon to legal consumers.
This tech-fueled vision has made Donio and Axiom an investment capital draw. Daniel Brenhhouse, a Permira Principal and new Axiom Board member, said that “Axiom was on our radar screen long before the IPO. We offered them an alternative to the IPO route and made a significant investment in the company because of its leadership, brand, differentiation, and ability to scale in a large, fragmented market.”
David Pierce, SVP and Global Head of Commercial at Axiom, explained the company’s spin-offs of two profitable business lines was “in part to avoid becoming a muddied-up legal conglomerate.” Implicit in Pierce’s comment is Axiom’s decision to take a narrower focus. Axiom opted not to compete with end-to-end enterprise service providers like UnitedLex and the Big Four. Instead, it doubled-down on what it does best—melding talent with customer need and using technology and a data-driven process to scale it.
Bill McNabb, former CEO and Chairman of Vanguard, is an enthusiastic new member of the Axiom Board and an unabashed fan of CEO Elena Donio. McNabb is “impressed by Elena’s use of tech and talent as well as her view of what the platform-enabled future will look like in the legal industry.” He’s also impressed by the partnership with Permira and believes its substantial investment in Axiom will help the company unlock its market potential and ability to scale.
It’s significant that McNabb, a titan of the financial industry who oversaw Vanguard’s outsized growth and market transformation, would join Axiom’s Board. It’s a testament to where Axiom is in the market today, an indication of its future trajectory, and a validation that its ambitions are within reach. McNabb has first-hand experience with the company; “Vanguard is a happy client of Axiom,” he said. McNabb sees many parallels between Axiom and his early days at Vanguard. He is drawn to the legal industry—and to Axiom in particular—because of its potential to transform, scale, and continue its organic growth by melding human and technological resources to align with and better serve customers. He also cites Axiom’s focus on talent, culture, and customers as parallels to Vanguard.
Howard Dorfman, an experienced General Counsel in the pharmaceutical industry, is one of many Axiom attorneys enamored of the company’s model. Dorfman explained that he enjoys working at Axiom because it “freed me to pursue more of the work I love—and to work on challenging projects for great client without the administrative burdens of running a legal department.” Dorfman says he’s “proud to be an Axiom lawyer and that’s a sentiment shared by many of my colleagues. What’s unique about Axiom—and a big draw for lawyers and clients—is that we have happy lawyers in control of their own careers.”
Conclusion
Axiom has taken a long, hard look into the corporate existential mirror and asked, “What are we as a company, what should we be, and how do we span the gap?” It has engaged in a series of actions that provide answers to each of these key questions. By doing so, Axiom has emerged as a differentiated, tech-enabled, data-owning, well-capitalized, scalable company well-suited for law in the age of the customer. Axiom’s dual focus on its clients and its professional staff–including a commitment to retention, diversity, career control, and upskilling— are key success ingredients in today’s marketplace. Other providers might benefit from a similar self-examination and market repositioning.
