Matthew Hudson, formerly of O’Melveny’s European operations and founder of Proskauer’s UK office, announced yesterday that he was leaving BigLaw and starting his own London-based firm, MJ Hudson, LLP.
“So what?” you say. ”Partners these days are shearing off from large firms like ice sheets from Antarctic glaciers.” What’s so different about this one?”
Well, since you asked, two things, really:
The first is that when the United Kingdom’s Legal Service Act takes effect in January, 2011, Hudson plans to have his private equity clients buy ownership stakes in the firm and share in its profits. Legal Week notes also the possibility that Hudson might also invest in his clients’ businesses, an idea that Hudson says he gleaned from Skadden’s practice of taking equity as compensation for the work it does for start-ups. Interestingly, he spends almost as much space on his website detailing the sectors he has invested in as he does listing the clients he has worked for.
The second point of difference is that Hudson’s new firm plans to pursue aggressively a range of non-hourly billing models. In an AmLaw blog interview, Hudson admits on this second point that “billing by the hour means that you may end up rewarding inefficiency.” Now, this is a bit like saying that eating nothing but jellybeans may promote tooth decay. Fundamentally, even if an hourly billing firm is extremely ethical, the less efficient it is, the longer it takes to complete a task, and the longer it takes, the more that firm charges for that task. To clients, that pretty much sounds like the dictionary definition of “rewarding inefficiency.” No matter. We’ll forgive the understatement.
Speaking broadly about the raison d’etre for the new firm, Hudson says:
“This structure brings out the benefits of traditional advisory partnership while adding superior 21st century service and pricing. It is an idea whose time has come. The last two years have emphasised the need to re-think many of the ways people in the financial and legal world do business. From now on, clients will want to know that law firms genuinely understand their needs and want to develop a long term alignment of interests.”
“Alignment of interests” is something you hear frequently from law firms. In this case, it sounds like Hudson means it.
Cool stuff.