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£255 Million Looking for a Home - How Will it Change the Practice of Law?
By David Curle
April 3, 2008
Important Details: Lyceum announced the closure of the fund in February after exceeding its target of £255 million. It promptly assembled an impressive advisory panel including former Clifford Chance managing partner Tony Williams, Paul Hewitt, who developed new consumer legal services at RAC and Co-operative Group, and legal IT consultant Richard Susskind. The fund will look for opportunities to invest in either minority or controlling positions in UK law firms. Williams told Legal Week that he expects to target firms with around £20 million in revenue. The funds could be used for a wide range of purposes, including financing a merger or a new practice area - but the more transformative investments might leverage the money to fund IT systems that improve the delivery of services to consumers or businesses.
Lyceum has specialized in investing in service business such as healthcare, education, outsourcing, social housing, and technology and industrial services. Law has its peculiarities, but it undoubtedly has much in common with those other industries, and Lyceum should be able to leverage its experience to take a new, fresh look at the law practices it invests in - a perspective that existing law partners might not be equipped to provide.
Implications: Walls and barriers are coming down all over the legal industry. Additonal reforms in the Legal Service Act will allow combinations of lawyers and non-lawyers to deliver certain legal services, and will open up the industry to new players. The world of legal services, in the UK and elsewhere, is a fragmented one and, for many businesses and individuals in need of legal help, bewildering to navigate. These reforms, and the innovations made possible by technology, will transform the way in which legal advice, information, and services are delivered. Service standards, pricing, efficiency, and the profitability of law practices will all be under scrutiny. In the US, many of these same pressures are coming about not because of any reform legislation but because of increased demands for better prices and service by in-house counsel.
The Lyceum Capital fund offers a great opportunity to “follow the money” and see where a fresh look from outside the legal industry, and buckets of cash, can lead. Legal publishers and legal tech providers have already begun the process of transforming the IT environment within law firms, but mostly in terms of automating back office functions and providing practice management tools. A new wave of investment in the industry could bring about entirely new legal services offerings that will make those previous steps seem merely incremental.