My Shingle

Is Starting a New Kind of Law Firm As Easy As Riding A Bike?

by Carolyn Elefant on February 26, 2014 · 9 comments

in Client Relations, Future of Law, New Ideas

Print Friendly

There’s a new law firm on the block here in Washington D.C., reports the Washington Post — easily recognized by its sunny yellow bike. The cycle analogy is a bit of a play on words, since here, the 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.

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.

But is Tandem a law firm?  Well, sure – it provides legal services to clients even though it also includes business and strategic advice. Tandem’s approach makes sense. Law doesn’t operate in a vacuum and at times (as is often the case with cease and desist letters ), lawyers need to ensure that they fully protect their clients’ legal rights without destroying the company’s image. In short, taking both an analytical and holistic approach to a case is part of being a good lawyer.

On the other hand, Tandem sends mixed messages. Tandem’s LinkedIn profile  categorizes the firm as providing “management consulting,” not legal service. Tandem’s webite describes that the firm “combines legal services, business consulting and growth capital.”  Finally, Tandem accepts compensation in equity which can be a smart strategy, as evidenced by some of the Silicon Valley firms that rode the dotcom boom. But it’s also a place where there’s a need necessary to tread cautiously to avoid a conflict of interest.

The question of whether Tandem is a law firm or not isn’t merely one of semantics. One of the requirements for compliance with D.C. ethics rules is that ancillary services (like lobbying or strategic advice) must support “provision of legal services” and not the other way around. In other words, if legal services become ancillary to business services, then the combination of lawyers and non-lawyers sharing fees isn’t “working in tandem” at all, but instead, unlawful fee-splitting. In addition, if legal services are ancillary to other dealings, that may also raise questions about whether attorney-client privilege attaches to lawyer communications.  Finally, when lawyers become too intertwined with client business, they can lose their independence. Indeed, that’s what happened with Enron (which we often forget that back in the day, was its own shiny, shiny business model du jour).

Tandem is irresistibly cool and smart and there’s much lawyers can learn from it. Above all, this firm knows its niche (companies between $5 and $20 million in revenues and growing) and sings to it, promising client-focused, responsive and business savvy lawyers.  What a breath of fresh air from stodgy, disconnected and oblivious big law.  Still, the question that remains is will Tandem – and more importantly, the less scrupulous or not-as-clever copycats that are destined to follow in its footsteps – be lawyer enough to say no when that’s what their clients need to hear.

  • Paul Spitz

    I doubt that any other state has an ethics rule comparable to DC’s 5.4(b), which seems designed to permit law/lobbying firms to function and thrive. That’s a unique DC phenomenon, I would imagine. So the quick answer to your question is no, it’s not as easy as riding a bike. The hidebound ethics structures that inhibit the development of the legal profession make it difficult to do this in California, or Ohio, or any other state. It’s a cool idea, though, and I wish them good fortune.

  • Bill

    Tandem sounds like deja vu all over again. If you practiced in the DC market in the mid to late ’90s, you remember most large firms opening offices in Tysons or Reston because they were afraid that all of the tech companies in the area though DC lawyers “just didn’t get it.” And, it seemed like a good idea to mirror the S.F./Palo Alto split. (And for partners living in McLean or Great Falls, it was wonderful.) (Full disclosure: I was one of those people.) But most of the offices were, objectively, failures. The few that remain in N.Va are here due to inertia, not any great need to avoid D.C.
    All the firms took equity in clients–after all, it made Wilson Sonsini rich. Well, didn’t work so well out here. (All sorts of reasons: capital market crashing; dot com bust; not nearly as many liquidity events after the A and B rounds.
    Tandem’s target client has $5-20 million in revenue? At that level, most companies have counsel already. If they don’t like their counsel, plenty of new ones around, all of whom are discounting commodity corporate and licensing work left and right. And lots of former big law attorneys doing regulatory work as solos or small firms (like our host, and yours truly).
    Maybe I am missing something, but at least for legal work, I just don’t see the value add in Tandem.

  • Ricardo Barrera

    Ditto. The real problem is the backdrop to the above discussion – the ethics rules most of which have nothing to do with ethics.

  • myshingle

    Ah, nothing new under the sun. I remember when those offices were opening and every tech meetup (or whatever they were called pre-social media) was populated with lawyers from those firms. I knew that they had closed, but assumed that they were dotcom casualties. I did however wonder about whether these companies had in-house counsel because at some point, it is easier and cheaper to staff up internally than rely on outside firms. It does seem like the value add is not really just legal but strategy and branding which I have to admit, Tandem is very good at.

  • Anna Gray

    Try appearing before a judge without a suit. You’ll get sent home to get changed – or to jail for contempt. Professionals should look professionally.

    At our firm, we provide wealth management services together with legal services, as well as business advice. I don’t think it’s something terribly new. If you got both business and law degree, you got to use both.

    Is it easy to ride a bike? It is, once you learn how to do it.

  • Paul Spitz

    As a transactional/business attorney, I never have to appear before a judge. Litigation simply isn’t part of my practice, so the first policy I set when I opened was no neckties. I operate in the startup space, and my “office” is a floating desk in a tech startup cowork space. So my dress code is casual, although I won’t wear jeans. I want to seem approachable to my target clients, and wearing a suit and tie every day just won’t do it.

  • Bill

    I also was struck by Tandem offering General Counsel services on the one hand, and talking about how they didn’t use cookie-cutter documents. Every firm trying to provide outsourced GC services (most of which are offered on a flat monthly fee basis) learns that the only way to make any money was to use template documents, and keep the defined service level crystal clear. The big firms I was with (before seeing the solo light) all hoped that loss leader or maybe break even GC services for those types of early stage (and start up) clients would lead to real money at the liquidity events. Only works if 1) there is a liquidity event (beyond A and B rounds, which are still commodity work) and 2) the underwriters or bankers didn’t insist on a brand-name firm. (They usually did insist.) The two closest examples are, I think, VLG (acquired by Heller Ehrman, now defunct) and Gundeson Dettmer, now over 150 lawyers and looking more like a traditional firm (albeit with a narrower focus).

  • Anna Gray

    I agree – if you don’t go to court, there is no need to suffer in the uniform. In our firm we rarely wear full suits, most of the times we just wear shirts and proper pants.

    We have a co-working space in the building where we have our offices. The biggest issue I saw with that was client privacy and information confidentiality. As we deal with tax matters, for example, that would not be possible. In your case, isn’t there an issue with things such as commercial secret?

  • Paul Spitz

    So far I really haven’t had a problem. If I’m meeting with a client, I reserve a conference room. If I need to make a phone call, I can always take my phone into one of the “phone booth” rooms or huddle rooms. I have yet to find anyone trying to look over my shoulder at my computer screen, and I’m trying to do a paperless office, so I really don’t have documents and files lying around.

Previous post:

Next post: