Caveat Legal reflects on 10 years of legal industry disruption
The commercial legal sector has lost focus on its original purpose – to protect and enforce the rights of businesses, which is why there is a strong groundswell in the market pushing back, embracing new business models where everyone wins, says Caveat Legal CEO Yvonne Wakefield.
Caveat Legal, which celebrates its 10-year anniversary in October, is a legal consultancy that was launched to connect skilled commercial lawyers with clients without the bulk associated with traditional practice. “Like most lawyers, I studied law because of a deep sense of justice. But as soon as I got into actual practice, I became disillusioned at how self-serving much of the industry was. This had to change, and so I set about designing Caveat Legal.”
Wakefield says while celebrating a decade of growth is a notable milestone, it’s important to reflect on the journey and appreciate there is still a long road to transform the industry towards being more client-serving.
“Of course, we are incredibly proud of the journey we have walked. Ten years ago, we took a big leap of faith in designing a new business model and, if we are honest, our first clients took a leap in faith in entrusting their legal matters to us. That they walked this journey with us as we grew and attracted new clients, and then flew, is validation that the model is properly catering to what the market wants from its legal service providers,” says Wakefield.
After enjoying a 65% year-on-year growth between its ninth and tenth year, Wakefield says Caveat’s exponential growth is directly reflective of market demand, which is reacting to inflated costs that have become the norm. She says clients are demanding value and lawyers long to do what they are trained to do – solve legal challenges and not chase sales targets, adding that she’s honoured to have played a part in driving this market shift.
“The way big firms grow and reinforce their dominance is by placing fee targets on their lawyers. A lawyer at one of these firms must bill a certain number of hours and bring in a defined amount of revenue every month and year to be retained and promoted. Its arguable that this practice presents a fundamental conflict of interest. They are incentivised to make legal work bigger and more complex, rather than find appropriate solutions for clients as quickly as possible. It is frustrating that regulators the world over allow this to happen,” she says.
“We are deliberate in our choices and actions, and cognisant of the role we are playing in driving change and upholding the integrity of our industry.”
Interestingly, says Wakefield, while large incumbents have been forced to scale back on hiring and have allowed themselves to become somewhat leaner than they were in the past, most are still in denial that the sector is changing. “We have a diverse client base, from private equity firms to corporates, from scale-ups to established players seeking a change. They all have one thing in common – a need for commercially viable legal solutions, provided quickly.”
Wakefield says that a decade before the Covid-19 pandemic upended all sectors of society, Caveat understood that innovation in the sector didn’t necessarily lie in expensive technology, but rather in redefining the business model used to deliver legal services.
“This is what built the runway we had leading into the pandemic and no doubt played a role in our rapid scaling over the past year, with expectations that this year-on-year growth will continue for some time yet. What won’t change as we continue to scale, is the business model – we exist to reject complexity.”
Wakefield says that one of the more rewarding aspects of Caveat’s journey has been the opportunity to create different modes of working for excellent lawyers. “Some lawyers want to be in a big structure where they are climbing the corporate ladder, but there are many lawyers who just prefer to sit in a quiet place and do the work that they love.
“Many lawyers are not interested in networking events and marketing, managing teams, and chasing targets. And so, it has been wonderful to contribute to our profession and build a space for lawyers to do the work that they love, and this passion and value, in turn, is transferred to clients. Everyone wins.”