Axiom has parted ways with its technology and managed services businesses, but it hasn`t gotten cold on technology, far from it. Al Giles, Chief Revenue Officer of the London-based company, gave a presentation to Legal Geek last October on innovations and modernization of the legal industry who indicated Axiom`s leadership. Giles` remarks made it clear that technology is a crucial addition to any organized legal talent pool (which uses data to map legal talent to the task). That`s what Axiom is after its spin-offs – a 21st century talent market. With this change, the company focused on a single market: financial information services. They only had a few months of money left in the bank when Axiom had its first profitable year in 2003. A Forbes profile of the company a year later attracted more attention. Meanwhile, the company has prioritized attracting top-tier employees, many of whom say they appreciate the ability to maintain the work-life balance that its flexible employment conditions offer. Axiom has made the difficult decision to forego short-term revenue from its two spin-offs in order to pursue a targeted, longer-term path to success. Instead of cancelling Axiom, other providers might be wise to embark on a similar differentiation journey in a maturing global legal market. The three simultaneous announcements of 19. February 2019 raised several questions about Axiom: (1) Why has the company derived its technology and managed services branches when the market is increasingly technology-ready and investments in legal technology are at an all-time high? (2) Why did Axiom hire Elena Donio, a technical executive with no experience in the legal industry, to divest itself of its core technology unit a few years later? (3) Why would Ms. Donio, a highly respected technology executive, decide to stay with Axiom`s talent company after the spin-off? and (4) What is Axiom`s business model that is about to be offered to the public? No one outside of Axiom`s senior management can be sure of the answers – and they can`t say it because the company is in a quiet phase ahead of its next IPO.
The opinions expressed above and below are solely those of the author – Axiom declined to answer questions or provide information relating to this article, and all data referenced here was in the public domain. Still, there are many clues – and solid conclusions – that can be drawn from public information about the company, as well as from the broader maturation of the market. Spoiler alert: Axiom is doing well. It serves more than half of the 2018 Fortune 100 reported income rates of $360 million; has an organized talent platform with around 2,000 lawyers/professionals in seven countries and three continents, as well as an established global brand. Axiom is very selective – only 5% of candidate lawyers are hired. Axiom`s legal team is not only very tribal, but also experienced. Axiom`s lawyers have, on average, more than 15 years of experience, from graduates to former partners in corporate law firms and general counsel. The workforce is much more diverse than large law firms. Women make up 55% of Axiom`s lawyers worldwide, and the company is known to have a significant minority workforce. Axiom`s turnover rate is also significantly lower than the large company`s benchmark. So why this gloom and fall? The early days were marked by ups and downs: months of work on a business plan produced an investor offering seed financing, but clients willing to take a risk with a non-traditional legal provider were few.
While they began planning to build a sophisticated, customer-centric technology infrastructure and hire nearly two dozen employees for that purpose, they soon realized that a technology-driven company wouldn`t affect the risk-averse general counsel. “We needed a much more consultative and outgoing approach,” Harris says. Eyebrows rose when Axiom invested in a managed legal services company in 2015. This raised questions about Axiom`s positioning in the market and whether the new business unit and subsequent digital contracting activities were related to the company`s core talent/resource model. The chatter intensified in November 2016 when longtime founder and CEO Mark Harris, the face of the Axiom brand, was replaced by Elena Donio, a seasoned tech executive but new to the legal industry. Questions about Axiom reached their climax on September 19. February 2019, when spin-offs of Axiom`s Enterprise Contracts Intelligence (Knowable) and Axiom Managed Solutions (AMS) divisions were announced. Axiom`s remaining legal talent business also announced plans to go public.
It is now in a quiet period, an embargo on advertising ordered by the SEC. The imposed silence has fueled speculation – and doubts – about Axiom`s future. The conviction of buyers, especially the conservative attorney general, was a higher obstacle, especially when Axiom began at the turn of the millennium. The legal market was then very different from what it is today. Law firms were the dominant supplier in the industry, and their hierarchical partnership structure, leveraged business model, and closed culture linked to precedents were major hurdles faced by Axiom or any other provider that introduced a new delivery model. Law firms had a virtual monopoly on the supply of the best legal talent, and they played the talent card to justify the ever-increasing rates. Axiom recognized this and mitigated the quality problem by hiring lawyers from large firms and removing corporate escalators from the traditional model – partner tributes, lavish offices, bloated staff, and more. Axiom was of high legal quality at half the price. Innovative practice: Technology helps Finch Solutions manage Brazil`s oversized legal system. Do law firms have to adapt to compete with this innovator? Maybe not. Coates makes three points about Axiom`s business model: Axiom`s model was well suited to the post-financial crisis world.
Elena made the journey from a few hundred million to a billion sales. And that`s exactly the adventure of starting a business that Axiom is about to embark on. Axiom`s decision to divest itself of its other businesses and go public with a core offering makes sense as an IPO strategy. Its two thriving spin-offs can each scale and focus on their core offerings, allowing Axiom to do the same. It`s also smart from a competitive point of view. Axiom has taken a close look at the existential mirror and concluded that it will not directly compete with EY, Deloitte, PwC, KPMG, UnitedLex and Allen & Overy for the corporate legal services business. Instead, it will focus on overall legal talent management, which will undoubtedly include both lawyers and other lawyers. One way to understand Axiom`s recent steps is to examine its roots. When Axiom was launched in 2000, he sought to create a new model for on-demand talent in corporate law.
Mark Harris, founder and longtime CEO of Axiom, has often said that Axiom was founded to attract disgruntled and overwhelmed clients and improve the lives of many lawyers who have worked for them. Harris, a lawyer who became an entrepreneur, drew on his personal experience as a partner at Davis Polk.