We spoke with Mishcon de Reya’s executive chairperson Kevin Gold and Flex Legal co-founder Mary Bonsor about the rationale behind the acquisition and how Flex Legal will remain autonomous in order to serve its law firm clients.
On 9 January, Mishcon de Reya announced that it was buying flexible legal resource provider Flex Legal, a UK alternative legal services provider (ALSP) which uses a proprietary online platform to connect 6,000 lawyers, trainees, apprentices and paralegals with interim roles across law firms and in-house legal teams.
Speaking to Legal IT Insider about the background to the acquisition, Flex’s co-founder Mary Bonsor, herself a former solicitor, explained that Flex – which was founded in 2016 and last year appointed James Lewindon as CEO – was looking at private equity investment when they happened to speak with Mishcon last summer. The UK-headquartered law firm, as part of a 10-year growth plan, has made multiple investments in adjacent businesses, but as of last year, had yet to invest in the ALSP market.
“The future of law is a one stop solution,” said Bonsor. “You might need a paralegal, or if it’s a high risk deal an expensive senior lawyer. Mishcon are looking forward in terms of the way legal solutions are moving and that’s often not just black letter legal advice.”
Key to the deal, Bonsor says, is that Flex maintains its autonomy. “That’s really important because we’re not becoming part of the law firm, and we’re not becoming MDR Flex. We’re owned by a separate holding company and Mishcon still wants us to help other law firms with their legal resource needs,” Bonsor said. The new holding company, set up on 14 December, is MDR ALS (Holdings) Limited, and its directors are Mishcon’s chief financial officer Matthew Hotson; chief commercial officer Richard Tyler; advisor Neville Eisenberg, executive chairperson Kevin Gold; chief strategy officer Nick West; and Bonsor. Both Eisenberg and West are on the Flex board.
The concept of law firms offering more than black letter law in all its different guises is not new. Firms such as Simmons & Simmons, Pinsent Masons and Allen & Overy have for years been painstakingly growing their flexible resource capabilities within branded businesses Simmons’ Adaptive, Pinsent Masons’ Vario and Allen & Overy’s Peerpoint. Within the broader ALSP space, firms such as Eversheds Sutherland and Reed Smith (to mention just two) provide a range of alternative services from within Konexo and Gravity Stack respectively. According to an influential report last year from Thomson Reuters Institute, the Center on Ethics and the Legal Profession at Georgetown Law, and the Saïd Business School at the University of Oxford, law firm ALSPs now account for $1bn in revenue and since 2015 have grown by 589%.
The major differences are that these businesses are typically part of the overall firm, and they do not work for other law firms.
One closer parallel is flexible resource provider Lawyers on Demand (LOD) which was founded in 2007 by Berwin Leighton Paisner (BLP) and spun out into a holding company in 2012 to give it more independence and room to grow. Over the years the pair became quite awkward bedfellows, with rumblings that the LOD leaders still felt constrained by being part of a law firm. In 2018, the by-then-merged Bryan Cave Leighton Paisner sold its majority stake in LOD, exiting the business. One of the drivers for LOD – although certainly not the only – was that they wanted to grow their law firm business.
Speaking to Legal IT Insider about the rationale behind the acquisition, Mishcon’s executive chairperson Kevin Gold explained: “We’ve had a well-documented 10-year strategy, which is to build a broader based legal consultancy and have a law firm as part of that consultancy, and so the idea of Flex is that it will maintain its independence within the broad portfolio.”
He adds: “At one level we’re just sharing the overheads and bringing accounts and HR internally for the Flex side. Where going forward a law firm is not the best option for a client, we want to be a part of that conversation. That could be flexible resourcing or managed legal services or things we’re doing on the MDR LAB side around investing in technologies that are transformative. The idea is not to bring it all within Mishcon but a bit like WPP, the idea is not to have exclusivity but to have a smorgasbord of offerings for clients.”
We’ve been told for years that the Big Four will eat law firms’ lunch because they offer clients a one stop shop consultancy, and Mishcon is rising to the challenge. Gold says that conflicts will be avoided because Flex is joining the holding company, not Mishcon the firm. The senior Mishcon people seconded to Flex – Eisenberg (previously executive chairman of Lawyers on Demand while at BLP); and West – are not lawyers.
“Flex isn’t the only business we have, we have seven others, but we’re separating all the operations from the law firm by having an operations company for the group,” says Gold. Mishcon’s other businesses include MDR Brand Management, MDR Cyber, MDR Discover, MDR Mayfair (in London, Singapore and Dubai), MDRxtech, MDR Lab and MDR One. In 2021, the Group launched MDR Solutions I, a litigation finance venture in partnership with Harbour.
Mishcon, which in 2022 was poised for an IPO that was put on hold due to market volatility, has made a name for itself in doing things differently. However, Flex’s law firm clients, which make up around 35% of its customer base, will need reassurance that their data is kept entirely separately. Bonsor has been reassuring clients of exactly this and says that for the majority of Flex’s top clients, the acquisition is not an issue. “I had breakfast today with the head of HR at one of our big law firms, and they made the observation that what we’ve done is very forward thinking,” Bonsor says.
What the acquisition will do is help Flex, which has long championed social mobility, with its trainee scheme. In 2021 it launched a SQE qualification scheme, Flex Trainee, and the 25 trainees starting this Spring will have access to the Mishcon Academy knowledge centre. Bonsor says: “Mishcon has a treasure trove of knowledge and our trainees will have access to that, which is really exciting!”
Bonsor and her team are impossible not to like and popular even among rivals, and customers have a way of working with people they trust. It will be interesting to see whether the ratio of private practice to corporate Flex customers changes over the coming year, or not.