An Evolution of People Experience and Client Experience in the Legal Industry
In this episode, host Nicole Giantonio welcomes Nick Humphrey, Managing Partner at Hamilton Locke, to talk about how Nick and his colleagues created a law firm with a structure and culture they call ‘THRIVE’. Nick and his team spent a couple of years on research and planning to develop “THRIVE” to build a firm that is both agile and lean; focuses on client and people experience. They have built a people-centric business by creating a vibrant culture that drives the best client experience. Nick explained how culture & diversity play a great deal to win clients.
Hamilton Locke is “An agile corporate law firm, established as an evolution of the legal industry, focused on aligning the interests of its people with clients.” It is a culture-led fastest-growing law firm in Australia.
Nick Humphrey, has been recognized as one of Australia’s leading private equity and M&A lawyers. He is the chairman of the Australian Growth Company Awards and author of an author of several best-selling books, including “Maverick Executive: Strategies for Driving Clarity, Effectiveness and Focus”; “Penguin Small Business Guide,” and the “Australian Private Equity Handbook.”
Click on the links below to hear what we covered in this episode:
- [01:02] – What is the ‘Thrive Model,’ and how Hamilton Locke utilizes it to evolve the legal industry?
- [05:08] – How client experience and people experience are interrelated?
- [06:30] – Two Examples: Why culture becomes the deciding factor?
- [08:48] – The story behind Hamilton Locke’s success.
- [11:20] – Why is Hamilton Locke trying to put an end to time-based billing?
- [15:16] – Which technology is Hamilton Locke focusing on?
- [16:03] – Over 100 deals in four months by focussing on client and people market.
Note: This transcript has been adjusted to improve readability. Transcripts are generated using speech recognition software and human transcribers. The context and more than 95% of the actual transcript have been preserved. We strongly encourage our listeners to listen to the audio.
Nicole: Hello, this is Nicole Giantonio, the Head of Global Marketing at Elevate. In early April, I had the opportunity to talk with Nick Humphrey, the Managing Partner at Hamilton Locke, a corporate Law Firm with offices in Sydney and Melbourne, Australia. The firm’s messaging – “An agile corporate law firm, established as an evolution of the legal industry, focused on aligning the interests of its people with clients” is fully on display in this episode. As Nick describes the firm’s model for Structure and Culture, they call ‘THRIVE’. Close to three years in, they are attracting and training talent, and the industry they serve has taken notice.
Hi, Nick – Great to have you on our program. I’m excited to share your story in the story of Hamilton Locke. Can you share with our listeners Hamilton Locke’s approach to the business of law and why that approach has been successful?
Nick: We wanted to build a firm, which was both agile and lean and really focused on client experience and people experience, so CX and PX. And to do that, we needed to evolve the platform that the legacy partnerships were using. So, we focused on 6K operating principles or pillars, which I call the THRIVE model.
So, the T in THRIVE is for talent. We wanted to never, ever compromise on our talent. So, we were very ruthlessly focused on getting the best DNA from the top firms, ideally with global experience. But more importantly, probably the traits, the character traits of the people we were hiring were really consistent and deliberate around – Were they hard-working, humble? Where they have a good sense of humor? And so on. So, we were quite deliberate about that, as well. And really, we wanted to only offer practice areas where we knew we could be top-quota.
So, the H in the model is really for High Performance. Every little part of the business, from the structure systems, processes, culture, behaviors, and so on, need to be all aligned about driving high performance. And it wasn’t just financial performance; It was also cultural performance. And part of that package of high performance is about being agile. We found the old, traditional models were a bit bureaucratic and slow. And we wanted to be able to pivot quickly and be nimble.
The third element is Resilience – R for Resilience. We wanted to be laying profitable, and that’s why we off-shored and outsourced and process mapped. And we just wanted to be able to focus on those front parts of the business – so the people and the clients – and outsourced the back office, so we’re nice and lean, as well.
The I in the THRIVE model is for Impact. So, every little thing we did, we want to be able to move the dial and have real Impact. Part of that was just being careful about the clients that we selected and, obviously, they selected. We only wanted to work with people who could see the value we added. So, clients that wanted us to be cheap will have a lot of touch and be a commodity, didn’t really suit us. We wanted to have clients that could really see the value that our hands-on approach could bring.
The next part is V for Values. So, the whole business is very values-aligned, very deliberate about the culture we wanted, and then the values and behaviors that cradle that culture. So, we wanted to be vibrant, energetic, collaborative, and ambitious.
And the last part – The E is for being Evolved. And every part of the strategy was an evolution of the traditional partnership model. So, as you said before, we are a company that is partnerships-oriented, so everyone is now an owner. And we believe that the care of one owner is worth ten employees.
All of our systems were redesigned to drive collaboration, for example, remuneration porting meetings. We took that to the next evolution. Structurally, we moved away from the traditional model of practice groups and service lines. And instead, we use K-Camp management, Suite teams, client teams, working groups, all sorts of things to get more connections between the practice areas.
We also have a balance sheet – this allows us to take long-term thinking to invest in technology, invest in training, take a really long-term view on things. And also, the offering that the group has is not just the traditional legal aspects but also company secretarial and more flexible models, so insourcing and outsourcing as well.
Nicole: Interesting direction, You created this model. You, obviously, have thought through the strategy, the approach, the approach to hiring. Did you have a model in mind? Were you copying something you saw in a different industry that you said – Okay, I’ve seen this. Although I haven’t seen this in law, I’ve seen this in some kind of other organization.
Nick: Yeah, definitely. Before we launched the business, we spent a couple of years doing planning, research, interviews. I was really lucky; I got to speak to CEOs, entrepreneurs, even elite soldiers, Olympic athletes, super coaches. I really did hundreds of hours of research, looking at different models out of everything from business to the military to sport and tried to kind of pull together what would work for us to build a high-performing team, reduce churn, get better engagement, and so on.
Nicole: Very interesting. So, you’ve created the model. You’re two years and a few months, I believe, in. What’s been surprising? What has occurred that you didn’t expect to occur?
Nick: That’s an interesting question. We sort of felt that that the CX, or client experience, and the PX, or people experience, were going to be different, and we would run the two of those strategies separately. But what we found is actually that they were very much interrelated. So, in other words, clients really value their culture.
So, if you take a step back, we believe that most lawyers love what they do. They like solving problems for their clients, they like helping their clients, but Big Law kept on getting in the way. So, everything from how you open a file to running a conflict check – All those things were slow and bureaucratic – even simple things like publishing an article would go off to get approved from someone overseas—a very frustrating environment.
So, we felt if we could get rid of those frustrations, the people experience would be better. What we found, or the big surprise was that clients were choosing us over competitors because of our great culture. And what was really interesting is that based on a survey in Australia – I haven’t actually released it yet, but I’ll be releasing it soon – I got to see a picture of the survey results, and I found that something like 34% of clients chose a firm due to the alignment of culture. So, when you have the same expertise and the same personal connection, culture becomes the decider, which is fascinating.
Nicole: It is. It’s interesting because I’d love to hear more about how that appears in the day-to-day work, right? So, how and where you see that I mean, Do you actually see the culture of your customers and the culture of your firm blending? Is that a way that you’re attracting customers? With current customers, Are you seeing a difference in the relationship? Really, how has that manifested itself in the day-to-day business of law at Hamilton Locke?
Nick: Yes, I think clients want to see someone that reflects their own values and their own behaviors. So, this idea that they will come to you because you’re an expert in a technical area doesn’t hold as true – So, to the extent that your culture is nurturing and energetic, and their culture is also nurturing and energetic, they’ll sort of warm to you. So, in every part of the interaction, the culture sort of shines through.
So, a simple example could be the speed at which you return a phone call. So, if a client’s operating real-time, and you’re also operating real-time, they’ll warm to that.
Another example would just be around diversity. At our firm and its culture is very inclusive and has a great deal of diversity – not just in terms of gender balance. But a simple example could be – We have some 25 different nationalities represented in the firm. People have worked and traveled and lived and studied all around the world and have all different backgrounds. That’s the same with our clients. Our clients aren’t just all middle-aged, white men. There’s actually a huge gender diversity and diversity of background and so on.
And also, I think another sort of nuance to the diversity angle is it’s not just about being lawyers – We need to have a diversity of thought and skillset. So, we very deliberately built out the business to have other skillsets at all levels. So, the management structure, the board, and so on have people not just from legal backgrounds. But of the Big Law firms, the management teams are all ex-lawyers. And what we tried to do was get a board and a management team that had had different experiences. So, from technology, from finance with talent from leadership, and so on. So, we’ve taken a very broad perspective to make sure that we can learn from other industries and other experiences. And, again, clients like that.
Nicole: Now, I can see that, obviously, you’ve had a great experience. You’ve been able to take that white piece of paper, and do research, create a firm that takes a different approach. What is that success story that, for you, tells you you’ve gone down the right road?
Nick: Some of it’s going back to basics around just our approach in a more granular way. So, I think part of it is looking at clients’ problems holistically, not just through the lens of your narrow, technical expertise – that’s one part of it. Another part of it is having the courage to not sit on the fence. So, I think a lot of, particularly Black-level Lawyers, tend to say that the problem is this, the legislation won’t let you do this. So, they’re kind of a traffic light based up you. Whereas our approach is to find a solution, be commercial. Don’t sit on the fence. Call out if you think the client shouldn’t do the deal even.
Another thing for us is really building community, so we’ll spend a lot of our time – not just having one-on-one coffees – but actually building a rich, deep community that brings together key stakeholders in a niche. An example of that would be the Growth Awards, which is – We’ve been doing that for nine years now. It’s got 4,000 growth companies and a best turnover of $300 – $400 – $500 million. It’s a really big, deep, active community. So, with all those things in the background, we can then connect the dots.
So, our approach is really don’t just be the lawyer – Use your networks and your Business Nest to make deals happen. So, there’s a whole series of deals where we wouldn’t have gotten the work, the legal work unless we were a bit more active. So, we would be doing weekly calls with key private equity funds, family offices, several law firms, alternative credit funds, and gathering the market intelligence and then connecting the dots. So, some of the really big private equity funds would do fortnightly calls with us.
And I think the reality is there are so many lawyers that are doing private equity or M&A or corporate finance to stand out in the pack, particularly as a challenger brand. We had to do something really differently. Whether or not the deal goes ahead that we’ve helped originate is slightly less relevant. What we’re actually doing is having complex conversations with those big clients about what their needs are, what their challenges are. And the problems they’re facing are not always just one, narrow area of law. It’s a broad, complex, multi-faceted problem.
But by having a say at the table to work with them to connect the dots, we might find them a director or a chairperson or a CEO or actually a source of capital or a company to buy. So, we would have dozens of files where our role was to be just a bit more than the lawyer – to be commercial, to connect the dots – And that’s worked really well for us.
Nicole: No, I can see that partnership, especially in M&A transactions and private equity opportunities – There’s a lot of trust that goes into that. In every new adventure, there are lessons learned. Was there something that has occurred, either from your initial vision or the vision of the team, that has been less than successful or something that has been harder in practice or harder to execute in practice than you had imagined?
Nick: There are lots of things that have been less than successful and lots of things that have been harder than we imagined. Because at the end of the day, what you’re doing is breaking habits of a lifetime. So, for us, we were so used to having a big office and so used to having a big secretary pool and so on. We had all these luxuries. So, we had to break every part of the business to go from to open plan to paperless to less support and so on in the back office.
But the biggest problem was probably time-based billing. Part of the strategy was really to move away from time-based billing. Lawyers hate it. Clients hate it. If you’re a lawyer, it’s so boring. It’s such an added administrative hassle to keep entering timesheets. Worse still, it gets really stressful when management are chasing you – Where’s your timesheet? Where’s your timesheet? And the clients hate because there’s no real correlation between the matter of the time that was input and the result. So that, you could have an inexperienced lawyer spend 50 hours researching something that a more experienced person could do in five hours. But the time input has no link to the value you created to a client. A really experienced, talented lawyer or partner could walk into a meeting that’s had lots of frustration and politics and no movement. And just through their experience and their style and approach, get things moving again, solve the problem in a win-win style. That could save a $100 million deal from falling over. Well, what’s the real value to the client?
The other thing with the billable time is that things that sort of track and reward one thing only, and that is how much time you put on the clock. If you want to try and reward other things like is someone living our values? Is someone supporting our culture? Are they active on the non-financial things like training or building community and so on? How do you stop thinking just about time and start thinking about how would you measure and track those things? That was the strategy. And we certainly tried all sorts of things like retainers and fixed price and all-you-can-eat models. So, a large number of our files on an alternative fee arrangement. But the reality or the thing that’s been less successful than I’d like is that time still is infused in the fabric of the law firm. So, everyone still thinks about how many billable hours they’re doing. Clients still want to see breakdowns of time that’s been input and hourly rates. And we’re still trying to measure people on their contribution on the non-financial stuff through the hours that they’ve put in. So, we found that that habit of thinking about everything from a time perspective had to be broken.
“Hamilton Locke found that habit of thinking about everything from a time perspective had to be broken.”
– Nick Humphrey
So, what we tried to do – and it’s a work in progress – is just stop thinking about time. Don’t have a time-based target. Don’t pay bonuses based on time. Don’t track non-financials based on time. Focus on trying to measure and collect a whole range of other data. So, 360o feedback loops from staff – What was the real impact of the project that they ran? So, if it was a non-financial project and our leading and working group, the fact that they joined a working group is awesome. But they could have spent 100 hours and got no result.
If you go back to one of – I call – pillars of that THRIVE model, it was, Did you get an impact? Did you get a result? So, those working groups are little 100-day sprints, for example. Give 100 days to a project. Automate a document, Use AI on a deal. Whatever the project is, you’ve got 100 days, and you’ve gotta get impact. So, it’s trying to get away from focusing on time and input of time. Actually, we’re saying – Well, how do we focus on the value we’re really adding and the impact that people are really having, both on client projects and also within the firm? So, it’s too early to tell whether the changes we have made will destroy time-based billing, but I think it’s a big project that’s worth focusing on.
Nicole: Let me ask – Are you using a legal project management system or matter management systems or both to help monitor that and to get to the outcome that you’ve discussed with your client? Are those kinds of tools being used, is the question.
Nick: So, when people talk about technology, they always think about automation or AI or something. But the best technologies are really the process mapping and project management tools and also the connectivity tools and PX, so 15Five, for example, an action step – all have with them project management components. So, at the end of the year, you can get all this different data about what was people’s plans, both from a client’s point of view and then in terms of the contribution to the firm. We can track it on a weekly basis throughout the year. So, again, that’s something we’re experimenting with, and that’s pretty exciting.
Nicole: Is there a specific market driver that you think is at your front door or something that your firm needs to be addressing at this point?
Nick: I think the market pressures are such that talent is trapped in these big, global firms and the Big Four accounting firms in an environment where they’re not happy. They’re not engaged. They’re not flourishing. And so, I think there are two parts of the market – There’s the client market, and there’s the people market.
And I think the people market – If we can solve that problem and provide that environment where you can get the best talent out of the top two firms and the global firms and get them into an environment where it is really collaborative, and there is an energetic and ambitious culture. Talent attracts talent attracts talent. So, every day, we’re now getting CVs from people out of those firms that are coming direct, they’re not even going through recruiters. So, we’re getting these fantastic CVs out of the best, best firms. And so, I think the talent market has responded to this authentic approach around collaboration, in particular.
But then the client market is responding, as well. Because at the end of the day, while brand is important, I think this personal connection, going somewhere that’s got really smart people doing great work, is also resonating. So, I think the two aspects to it – the talent market and the client market – It’s been really interesting to see the very high quality of clients that come following the talent, as it were. And in the last month – Yeah, we’ve done over 100 deals in four months, which is certainly punching above our weight.
Nicole: Yeah, that’s really interesting. And I have to say, I did some work myself in the private equity space, and it’s not known for its friendly culture. So, to have created a firm that’s attracting those firms that are looking at culture and looking at the change in culture is – That’s a pretty significant statement.
Nick: Yeah, definitely.
Nicole: Nick, thank you. It’s been great to hear your perspective and your firm and the change that’s occurred there. I really appreciate you being a guest on our program.
Nick: Right. Thanks very much for having me.