Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m M A Y 2 0 1 5 33 w w w . C A N C A N A D I A N L a w y e r m a g . c o m M A Y 2 0 1 5 33 Creating a third option COGNITION TURNED 10 YEARS OLD IN MARCH, and while we are a strong proponent of alternative busi- ness structures, it is worth reflecting on what we have achieved and plan to accomplish in its absence. Our goal from inception was to create a "third option" for businesses and corporate counsel beyond hir- ing in-house counsel or using a traditional business law firm to effect legal needs. Particularly as insourcing has flourished, as has the resulting scope of in-house work, there had to be a better and more cost-effective, next-best way to bringing as much as possible inside. Thus the creation and evolution of Cognition — the first law firm comprised of senior in-house counsel who also brought the peace of mind of previous Bay Street experience and success. Best of breed as we like to call it. And by inserting those people into a structure built from the ground up where we scrutinize every expenditure and utilize software-as-a-service-based technology for optimum efficiency, our hundreds of clients have received the services of better-suited people at less than half the cost of comparable traditional firm resources. Tough to object to that. When we started our model, we decided to structure as a law firm and have stayed that way. ABS was not on the radar and a corporate structure seemed too foreign for our purposes, not to mention the comfort of even our early adopter clients. However, we refused to allow our business structure to determine our method of operations. Rather than merely emulating the traditional law firm structure and operating mode, we start- ed with a blank slate to create the ideal legal services organization from both client and lawyer perspectives. More specifically, here are some of the unique ways we painted our picture: • separate owner from personnel; line from staff — Not all lawyers have to be owners, nor should they feel that they have to be one in order to be successful and enriched in their careers. We believe in specialization; our lawyers should focus on delivering legal services, our owners should navigate the vision and strategy for the business, and our business personnel should perform roles such as sales, client happiness, lawyer happiness, financial planning, and the like. We currently have three owners, approxi- mately 50 lawyers, and a business head office of about 10 staff. • cut overhead and at the same time get closer to clients — Maintaining a minimalist business head office creates an open environment that is great for culture and collaboration, while placing our lawyers closer to and even embedded with clients. That makes us a more client-centric, operationally knowledgeable law firm — exactly what corporate counsel say they want. • only charge for experienced lawyers — When I ran a legal department, I could never get over see- ing training on my bill. That's why we only deploy experienced counsel for charge, making the multiplier on cost efficiency and savings even greater for the client than just our comparable pricing differential. • only bill once — If using time as a billing metric, no more than one person can bill for a given task. Otherwise, there's learning being charged to the client. • never charge for internal expenses, including travel time — Should be obvious by now. But it isn't. If clients want us to visit them or be with them in their operations, that means they want us closer to them. Why would we charge them for that? • charge by the work not by person — We attach fees to the type of work being done, which are the same regardless of who does the work. Whoever does it will meet our best-of-breed standards, so why charge more based on age? And here's what's new to the fold: • value-based billing — We have just launched the first objective, scorecard-based billing system where clients can automatically alter the amount of their invoice by assessing our work according to six value- based criteria. • "Productizing" business law — We believe the future lies in transforming ad hoc services into permanent solutions and in using technology, experience, and ingenuity to do so. We have already launched related business lines around law department consulting (given our unparalleled general coun- sel experience within a firm environment), technology advisory and concierge, contract and document management systems, and project organization. Products like this also have the benefit of being run out of separate business entities even in the absence of ABS. Let's be clear, ABS is a worthy initiative. However as demonstrated by our record to date, while the absence of non-lawyer ownership will be an obstacle, it will not deter our success. w w w . C A N A D I A N L a w y e r m a g . c o m M A Y 2 0 1 5 33 ment sys f separate busin Let's be clear, ABS lawyer owners y o own non be c e bu ear, Joe Milstone is co-founder of Cognition LLP. Giving its clients the best of both worlds, Cognition's model provides senior, business-minded legal advice at affordable rates, under flexible structures, and with counsel possessing a unique blend of private practice and in-house experience. He began his working career at Oslers and later was VP, legal, at both Call-Net Enterprises Inc. (Sprint Canada) and Magna Entertainment Corp.

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