Serious Doesn’t Necessarily Mean Boring

This interview is a little bit unusual, since this time, legal services market players asked questions instead of journalists. The whole process looked like this: at first, Axon’s partners made a list of topics, then sent the list to 30 partners and associates at local law firms, and asked to vote for the most interesting topic plus put forth some additional questions. Therefore, instead of answering some questions they fancied, partners had to answer the questions that interested other people.

What’s the specifics of providing legal services for the IT industry? What makes it different from other kinds of legal services?

BD: Here we have to avoid using compound sentences, legalese, and long disclaimers. Our clients want us to give the clear-cut answers instead of  legal opinions on 20 pages (with page-length sentences) containing anything but answers to clients’ questions. In other words, the IT people don’t pay for legal bullshit.

DB: Yes, actually, they see any document as a program code. So, every word should be meaningful. Lawyers’ favorite words and wordings, such as ‘including, but not limited to’, ‘in view of’, ‘therefore’, ‘whereas’, ‘with regard to XXX, it should be noted that YYY’, are nothing but some filler words. Another disappointment for those who work with the ready-made documents: you have to explain all the clauses “borrowed” from other documents, even if nobody ever doubted whether it was necessary to use them or not.

DG: Our clients are able to collect and analyze information; they are advanced Google users, they are well-rounded, and they check out the news. In other words, many of our clients can easily work as junior associates.

It is unlikely that big clients like Facebook or Ebay would hire such an unusual law firm. Do you mostly focus on small startups?

DB: When we were setting up Axon Partners, in the first instance, we didn’t think of what our clients wanted. It was all about what we wanted, our insight into the legal profession and legal business. Sure enough, we want people, preferably our clients, to fancy our concept of legal services.

Actually, our concept is not so unusual. We borrowed a number of ideas from other companies. We decided that all our associates would become our partners after we had met lawyers from Fondia, the law firm based in Finland. Lawyers at Axiom have been practicing casual office dress-code for ages. As it turns out, we borrowed our 4-day working week from Google, and holacracy from Zappos. However, using scrum in legal services is our own know-how. We couldn’t have borrowed it from anybody, since nobody knows how it works. I don’t think we are the first to work with projects that way, since Agile Framework (scrum is one of agile concepts) has been under discussion in a number of big companies, such as Bird&Bird. But we are definitely among the scrum pioneers.

BD: There was a time when Facebook and Google were small companies. Small IT companies need lawyers, too. You do the math: is it even possible that IBM, Google, or Microsoft would hire a law firm that exists only 6 months? It is quite possible, as I see it. But actually, if you start working with 30 small companies, 5 of them will become large businesses, and founders of the rest 25 companies will launch more projects that are going to succeed sooner or later. So, we’re playing the long game.

DG: By the way, our clients are actually not so very small. Hopefully, next year, we will make it into the Jurydychna Gazeta (Jurydychna Gazeta (Eng.: “The Newspaper for Lawyers”) – a weekly paper for legal professionals published in Ukraine) Top List. So you’ll be able to see it for yourself.

What is that you don’t like about the Ukrainian legal services market? How would you change it?

DG: The Ukrainian legal services market is so cut and dry: law firms compete by using meaningless slogans like ‘individual approach to every customer’, ‘the team of young professionals with strong attention to detail’, or ‘practical decisions and real evaluation of risks’. However, I don’t think that anybody in a company at the end of the TOP 50 list thinks that the quality of their services is lower than that offered by the TOP 10 law firms. If we set up one more company offering the same kinds of services, just like top-tier law firms, we’re going to end floating in the “red ocean” with 5 more firms of the same league.

Look at the public communication strategy invented by Barack Obama’s team. Can you imagine Petro Poroshenko or Angela Merkel in a stand-up show? Ukrainian market players think they are more significant than the US politicians: there’s no room for humor and easygoingness here. This hardness is something I really don’t like.

Do you really think that clients are able to take the lawyers who sit in a coworking space wearing briefs seriously?

DG: As soon as our clients find out that we are based in a coworking space, they’ll refuse to work with us, since they are well aware of the latest research carried out by the British researchers, according to which legal services are more efficient when delivered by lawyers who work in an office, as compared to services rendered by those who work in a coworking space. In addition, according to the recent statistics, lawyers who work in a co-working space and refuse to wear suits, deliver services with at least 5-7 days’ delay, as compared to those who are all suited up and work in an office, most notably during the periods of solar activity.

NP: A couple of years ago, Bobby McFerrin came to Lviv Alpha Jazz Festival. I’ve never seen him wearing a suite. His usual onstage outfit consists of jeans and a T-shirt. Most jazzmen of his level are easy-going about tuxedos and cuff-links. So, that day, Bobby McFerrin looked casual. Most of the visitors were musicians or jazz lovers, so casual style predominated there. However, people sitting in the front rows were overdressed, since they were definitely thinking of McFerrin’s performance as of an opportunity to show off. I always feel embarrassed in such situations. In my opinion, you come to a concert to enjoy music, but not to make your public appearance. We’re not trying to make our company universally likeable. We work with clients who get the situation I’ve described, and come for quality services. They don’t care about our suites and portraits of prominent lawyers hanging in a mahogany-decorated office.

4-day working week is something unreal. Lawyers should be available 24/7. So, does it mean that on Wednesdays, you won’t answer the phone calls or respond to emails, and won’t appoint meetings for this day?

BD: I suggest that we get a new angle on the whole concept. Let us say, our 4-day working week is a kind of motivation. If you are able to organize your time so that you need only 32 instead of 40 hours to cope with all your tasks, then you are free to do whatever you want on Wednesdays. I don’t know anybody who would use their 40 working hours only for work (let alone the overwork). We try to avoid appointing meetings and fixing deadlines for Wednesdays. Sure enough, you cannot avoid going to a court session or answering an urgent e-mail, but these are the exceptions to the general rule. For example, I had to write comments and prepare my speeches during my off-hours at nights. Now I have Wednesdays to do it. You can also use Wednesdays for your personal development, or deal with your personal issues, spend some time with your family or friends, or just recover from physical and emotional stress.

DG: People often try to tease me: gotcha, today’s Wednesday, but you’ve responded to my email. I’ve got used to it during the past two months. I sit in the park wearing jeans and read. From time to time, I check my messengers and emails. The thing is, working in the legal services industry means more than just reading statutes and periodicals for lawyers, and writing legal opinions and letters to clients. If you want to do the work for the long run, you should think how to restructure your work processes, how to invent new communication channels, new services, and products. Is it even possible to invent a Moonshot service during a break between the court sessions? No, it’s not! But it’s quite possible to do it when you spend all day on a comfy pouf by the window at Chasopys (Chasopys – a coworking and creative space based in the center of Kyiv).

Do you have any work to do at all? Or do you only promote yourself?

DG: We don’t do anything we hate doing. We got vaccinated from business breakfasts and banner ads in the airports. We generate content that may be interesting to people (not including ourselves). We have a lot of promotion activities because we almost never refuse to comment on something or give a talk. We live in the Web 2.0 epoch, which means we should constantly communicate and interact. Today, it’s not enough to write an article for Pravo Ukrainy (Pravo Ukrainy (Eng.: Ukrainian Law) – a periodical for legal professionals) and wait to be awarded the title of the honored lawyer of Ukraine.

DB: Nice try! But you know, we participate as speakers during numerous events, and we do gain real profit. We receive a lot of presents, including pens, cups, notebooks, and sometimes even T-shirts. So, we fill almost all our needs according to Maslow’s Hierarchy of Needs.

How did you come up with the whole holacracy idea?

DG: They say that there’s a growing demand for mental labor, while certain kinds of simple jobs will fall into oblivion. Cashiers in the supermarkets will soon be replaced by self-checkouts, taxies will after all become self-driving. The same goes for the legal profession. Eventually, simple tasks, such as to check whether the corporate bylaws or agreements comply with the statutory requirements, will become the matter of a couple of seconds with a quantum computer, and you won’t need a dozen of lawyers who will require a fortnight to deal with the same task.

Intellectual work requires some intelligence from a lawyer, and as well creativity. It’s quite possible that quantum computers will double the speed of the Moore’s law (every two years, the speed of the microprocessor is doubled), but artificial intelligence won’t be able to fully replace a lawyer for quite some time. Today, it takes a couple of seconds for a robot to “recognize” a person on a photo, while a moment is enough for babies to recognize their moms or dads.

Anyway, strict rules and penalties can hardly be motivating if you are engaged in the mental labor. On the contrary, creative freedom, awareness of your role in doing something big, and bonuses for doing a good job – that’s quite a motivation. Therefore, hierarchy in companies will become less popular over time, while management systems build on freedom and trust will gain momentum. Holacracy is one of these new management systems.

Holacracy means giving freedom to lawyers, that is to say, equal freedom to lawyers at all levels. But if you give freedom to inexperienced associates, you’re going to lose quality. I doubt that it will work for law firms.

DG: Close your eyes and imagine that a certain associate arrives at the office on Monday, and finds no one there: neither partners, nor counsels. They aren’t at the office. Is the picture clear? How will the company work? Who is going to be responsible for all the strategy and tactics, as well as for the new projects? Who will assign the tasks for current projects?

If you’ve imagined this pure hell and hit the panic button, then you’re a partner of a company we don’t want to be. Are partners the only driving force in a law firm? Does it mean that if they stop pushing this boat, then associates at all levels won’t even know which way to pull the oars (and what for).

Maybe we’re wrong, and this management system won’t work in a company with more than 30 employees. If so, we will admit that we were wrong. Until then, we’re going to do what we like and we’re going to enjoy it.

We do have some doubts. But we know something big may be hiding behind our doubts.

DB: We’re not under the illusion that in our company, associates with little experience are able to write due diligence reports on their own and email them to clients. In our company, every project is handled by a team of lawyers at all levels. What I mean is, we proofread and check all documents at three levels, just like in traditional law firms. However, we do believe in the expertise and self-sufficiency of everyone working on our projects (we try to go easy on micromanagement). In addition, there’s no place for a blame culture – if something goes wrong, we don’t look for someone who can be held responsible, or a whipping boy. So that’s what we got out of holacracy in the first place.

Have you managed to create a comfortable environment with this management system? How do you stimulate professional growth in your team?

NP: You’d better ask our associates whether they feel comfortable or not. I think, in six months they will be able to tell us about the things that motivate them (just then, the cliff-period will expire). Ask yourself what’s the best motivation for you: a high-paying and steady job, or your entrepreneurial drive and a feeling that you work for your own company? In our company, we cultivate entrepreneurship and dispel the myth about steadiness, since in companies paying consistently high salaries to their lawyers, there’s the consistently high probability that lawyers will be fired as soon a crisis hits the market.

DG: We stimulate professional growth “by design”: all our teams of lawyers are cross-functional. In our company, we have no division into practice sections or industries (yes, IT isn’t a single industry). Our lawyers are free to choose trainings, lectures, and conferences to develop their hard skills and soft skills. In addition, we borrowed the system of quality assurance from the Big 4, where lawyers with different competences work on one document. As a result, experienced lawyers constantly convey their knowledge to those who have less experience.

You’ve made a public announcement that all your company’s associates are partners (some of them are already partners, while others have their stock options). What’s the point? Why can’t you use salaries and a favorable environment as a motivation? Where’s the good of stock options? And what if your company’s shares will eventually dry up?

DG: Our employees are the company’s core value. You can read it in the Core Values section on every other company’s website. Yet, it seems to me that we give our own meaning to the whole concept. Here’s the thing. Say, there’s a guy who drives Volkswagen Bora. Our guy is a taxi driver. So, Volkswagen Bora is his core value, and he uses it to the max. If he loses his car, he will lose his income.

We use the word ‘values’ to describe something that’s more valuable than anything else. Our people make our company. That’s why our associates have stock options, and that’s why our associates, not partners, decide how to work, and are free to choose their work schedule.

The specific feature of hierarchy is that it’s always worse at the bottom. People are the core value, but meanwhile, the lawyer’s workload is always overwhelming and inadequate. What is more, our society cultivates the stereotype that a lawyer wearing a suite is able to work day and night without a break.

Your hourly rate is 50 €. Honestly, it’s dumping.

DG: We fixed our hourly rate based on a number of deductions. First: if we divide the revenue of the top law firms by the number of hours spent by the given number of lawyers, we’ll get the medium hourly rate, which is even a little bit less than 50 €. Second: the majority of our clients are outsourcing companies selling their hours, and as a rule, their rates don’t exceed 40 €, which means they are several times lower than hourly rates of top Ukrainian lawyers. Third: is it possible to enhance the efficiency of our work in every project?

I think that it’s time for lawyers to face the truth: in every single company, project organization is far from ideal. We all work chaotically, and to my mind, this happens because our clients think that lawyers should be available 24/7 and spend most of their time waiting for the next opportunity to work under pressure.

We have two hourly rates: regular rate (50 €) and extra rate for urgent projects (100 €). When there’s an emergency, such as “I need you to do buy-side due diligence of the project, due by two days from now” or “I am in the middle of negotiations. I need you to check the shareholders agreement, and you have only an hour to do it”, we refuse to work, because the quality of our work is at stake.

You’ll be surprised, but we are financially efficient with our rates. For the last six months, we haven’t had a single loss-making month. We raised the salaries and set up our technologies development investment fund.

BD: With our rates, we are able to work in other Ukrainian regions (Other than Kyiv) and get projects from top companies. In addition, we don’t offer any discounts, since our prices are already affordable.

NP: With our low hourly rates, we have but few chances of becoming the wealthiest lawyers; however, we’re likely to become the happiest.

What is your planning game? Is it gambling or strip poker?

BD: Our life before and after planning is night and day. Back in the old days, any new project could drop from the clouds on Thursday night, with a deadline on Monday. With planning, at the beginning of every week, we already know a number of things: what to expect, when to start working on our tasks, when to assign them to our associates, and when to send the results of our work to clients. Now we are able to plan any urgent project and assign someone beforehand who can be on hand just in case.

With planning, we’ve learned how to evaluate projects and tasks, and therefore, we can forecast our efficiency. And yet, lots of things depend on our clients: whether they’re interested in this or that project, and whether they are ready to give their attention to such projects.

By the way, it was planning that made our “creative Wednesday” possible. Consequently, we learn how to value our time.

How are you going to manage your employees who work away from the office, and what is your team management strategy?

BD: The main thing is to distribute the work properly. To “manage” is not exactly the right word. In order to make the whole concept work, we have to choose people who don’t need to be managed. They know what they’re doing and why, and know when the work should be done. If something goes wrong, we analyze the problem and decide how to fix it. If the cause of the problem is a certain employee, and nothing can be done about it, this employee will eventually decide to leave the team.