The Tandem Experiment

While most altlaw businesses try to dodge and weave around the fact that they’re committing the crime of Unauthorized Practice of Law, one not only admits the obvious, but is proud of it. Via Carolyn Elefant at My Shingle:

Tandem is structured differently from traditional law firms as well.  D.C. Ethics Rule 5.4(b)  allows for non-lawyer partners, provided that they are also firm employees (as opposed to passive investors) and provide services that “assist the organization in providing legal services.” Capitalizing on this rule, one of Tandem’s co-founders, Michael McDevitt is non-lawyer and former CEO of a successful weight-loss company while the other co-founder, Randy Price brings six years experience as a big law associate. The remaining firm members are comprised of a mix of big firm expatriates and management types, including two with deep roots in e-discovery.

As much as my view toward the ownership of law firms by non-lawyers is negative, one of the key ingredients is that it is also unlawful.  Tandem Legal Group is a law firm. It’s half-owned by a non-lawyer, who brings his experience in running a weight-loss company to the firm, and it comports with the District of Columbia’s ethical requirements.

For those who said, let’s give it a try and see what happens, you’re in luck. But before we look to Tandem as the model for the future of law, it has a few other attributes that distinguish it as well.

BIKE stands as an acronym for the Tandem’s tagline, “Be yourself, Innovate, Kindness and Engagement.”  Not surprisingly, Tandem boasts an “anti-law firm culture” — which apparently  shorthands for no suits, funky work space (ala start-up or Ally McBeal , your pick) and a healthy disdain for how “other” lawyers do things.

The anti-law firm culture thing may work or may not. For many lawyers, it’s a very attractive alternative, as it seems that a great many young lawyers have little use for what old-timers refer to as “professionalism.”  After all, a lawyer who took pride in his appearance was just recently subjected to the ridicule of the slackoisie.  It’s likely that there will be a call for the uncola, law version, by some.  It’s also possible that this is just a fashion trend, which will rise or fall like hemlines.

In addition, Tandem is directing its attention to start-up companies in the $5-20 million revenue range, which means that they share the “fun” and “cool” firm culture with that of their clients.  They take equity instead of money, and this seems to “incentivize” them to behave more as partners with their clients than lawyers for their clients.

“Then you meet these dudes from Tandem. They understand how fast we’re growing. They get things back to us at the rate we’re moving. When you have an investor that wants to give you $1 million and he needs 10 additional documents pulled out of left field in two hours, you don’t hear, ‘Well I’m in a board meeting.’ At Tandem, that’s in your inbox in two hours.”

This, of course, bears less on ownership than on client service, and reflects the Biglaw attitude of being too important to give a damn.  Tandem can get stuff to your inbox in two hours? So that makes them pretty much the same as the vast majority of non-Biglaw firms?  Got it.

Is it possible that this experiment will succeed?  Of course, particularly given that its focus is on a niche business that raises few of the issues that give rise to problems for trial lawyers.  The bottom line will eventually be tested, whether they produce quality legal work or whether their papers, the ones showing up in the inbox in two hours, result in bet-the-farm litigation later because they were inadequate.  Time will tell.

The idea of a law firm being more casual and quirky to suit the sensibilities of clientele isn’t a new one, and brought about a seastorm of change right before the dot com crash, when buttoned-up lawyers tried to pretend they worked for internet start-ups where the CEO wore a Pink Floyd tee.  Casual Fridays were huge then, but didn’t have much of anything to do with the quality of legal work.

And when the lawyers have to go to court, they still had to put a suit on. Judges are funny that way.

But none of this seems to have anything to do with the big question of non-lawyer ownership.  Michael McDevitt is there to offer the dimension of business advice to start-ups, which is fine provided he pulls his weight and stays out of legal strategy.  The same could be accomplished if he shared office space with this cool and quirky law firm.

Whether this experiment will prove the point of the future of law-ists isn’t clear.  Tandem doesn’t involve passive investment, meaning that there are shareholders demanding higher profits per share at the expense of, well, something.  The firm has chosen a narrow niche, but if it is forced to expand to litigation as its clients’ needs change, it will be tested as to whether its culture can withstand the pressure to produce.

Most importantly, it will be five to ten years before anyone knows whether the firm even survives.  So does any of this matter? Well, it does, in the sense that other Altlaw firms are seeking to poach clients (albeit businesses, not individuals) while breaking the law, and Tandem is at least honest about what it does and doing so in accordance with the rules.

But even if the firm does survive, it has nothing to do with small or solo firms engaged in litigation, particularly criminal defense.  And it never will.

5 thoughts on “The Tandem Experiment

  1. Tim Knowles

    Even without outside partners pushing profits, I fear that firm’s like this (with non-lawyer business people as partners) will be too focued on the firm’s image and culture. I hope that “Kindness” isn’t such an important part of their firm’s image that they neglect to kick asses when necessary (including their own and their clients’) or do things that look bad for the firm but are good for the client.

    1. SHG Post author

      I remain unclear on what exactly they do aside from send off forms. It doesn’t appear they do litigation, but what about M&A? Will they be nice or killers? Will they leave it up to the non-lawyer boss to decide whether to really rep their clients? Lots to see here, even if it only addresses a tiny slice of the law.

  2. UltravioletAdmin

    Seriously, their stuff is the most common stuff you hear and it sounds desperate. Angels and VCs either like big law or have their own guys. This looks designed to focus on ambitious start ups founded by people with more money than sense.

    1. SHG Post author

      Hey, if they get business, great. That most of the schtick is either pedestrian or the slackoisie vision of Utopia is beside the point. Any lawyer can wear jeans and act “quirky.” Big deal.

  3. John Jenkins

    I am sure the folks at Tandem are nice folks, but if an investor is demanding 10 documents in connection with the investment, and anyone says they can deal with all of the issues in 10 documents of any complexity in less than 2 hours is just completely full of crap. Unless all you are doing is cutting and pasting and giving short shrift to the investor’s (or company’s) rights, that is just impossible. The most basic transaction would involve just a Stock Purchase Agreement, but even that could involve an Amendment to a corporation’s certificate of incorporation, board actions, shareholder actions, etc. Then, even a mildly sophisticated investor will want a Stockholder Agreement and an Investor Rights Agreement. You can’t read that set of documents carefully in two hours. You’re just betting that the last set you did is just right for this deal. You might even be right sometimes. But you won’t be right all the time, and those times you are wrong will bite you in the behind.

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