HSBC is seeing a trend towards law firms seeking seven figure sums to invest in technology and process improvement, according to the bank’s head of professional services, corporate banking UK, Simon Adcock.
Adcock (pictured), who took over the role in June as part of a wider move by HSBC to create industry sector heads for the first time, says that several global firms are looking seriously at funding $10-100m projects, where debt is structured on a highly bespoke basis, often with input from the firm’s tax advisors.
Law firms are seeking investment for areas such as new global billing or client relationship management systems, often combined with nearshoring ventures or the establishment of legal services centres.
According to Adcock, law firms are being driven by the increase in client demands on both cost and service levels, meaning transformational IT is now critical.
“Law firms can cut costs and make gains only up to a point – technology has a massive part to play going forward in creating efficiencies and driving profitability,” he told Legal IT Insider.
Not only are client demands a factor but Adcock says that the number of recent and ongoing domestic and cross-border mergers mean that many law firms have platforms that require significant investment.
HSBC has recently been working on structuring lending so that in the case of vereins, lending can be spread pro rata across the member firms so each are paying a fair sum – overcoming a familiar obstacle of identifying where the cost should lie.
The increased focus on investment in technology comes as many major firms are adopting a more corporate structure and Adcock adds: “Over the next decade, I think it is likely we will see the top 30 law firms with management teams that are empowered to run the business, so that the lawyers can focus on doing the lawyering.”