Allen & Overy's tech space Fuse: “Equity isn’t the price of coming”
Allen & Overy’s (A&O’s) announcement on 28 March that it is to launch a technology innovation space within its City office is one of the most extensive commitments to new and emerging tech that the market has seen from a law firm to date.
Law firms have over the past 18 months announced a series of different startup initiatives, including Addleshaw Goddard’s substantial £500,000 fintech startup mentoring programme.
However, the new venture from A&O will see it create a specifically-designed space in Bishops Square for 60 individuals where tech companies, A&O lawyers, technologists and their clients will collaborate to explore, develop and test legal, regulatory and deal-related solutions. It is early days and the firm plans to open the space – called Fuse – after the summer lull. It will shortly consult designers to create the space and take its time to select participants.
Legal IT Insider caught up with Fuse’s chairman Jonathan Brayne to find out more about venture. Brayne said: “The emphasis we’re putting on the space is legal tech, reg tech and deal tech, deal tech not being a term of art yet. That’s a very deliberate choice because those go to the heart of what we do and create enormous opportunity and represent enormous disruption.
“We’re trying to attract businesses doing the most interesting tech-enabled things in those areas. Those could be things that are relevant to our clients’ businesses, not enabling how we do business but delivering a product into our client that might substitute or extend what we do. Or they may be products targeting law firms that we would be a natural customer for.”
Once in residence, companies will have access to the expertise of A&O lawyers, technologists and clients to co-create practical solutions to some of the challenges faced by companies, financial institutions and law firms today.
While it is a smart move from a firm that is fortunate to have the space to undertake such a venture at a time when many law firms are bursting at the seams and looking towards agile working practices to avoid taking on more real estate, many people are wondering what the business model is behind Fuse.
Brayne said: “We’re not going to charge companies for having a desk, there is no rental charge and investing in equity isn’t the price of coming. Investing in these companies is something we may do but we don’t view this as primarily an investment opportunity for A&O. We may invest if we find a business that has a particularly comfortable fit with what A&O does. But what we hope to do is to identify areas where technology can enable solutions to client challenges. That may come through these early stage companies or more mature ones coming in, but it may also come where clients bring us a challenge and technology can be part of the solution. That could be a revenue generating opportunity, whether a client engagement or some other structure.”
Clients have so far responded well to the news and Brayne says: “Clients have been very receptive and intrigued and want to know more. From a purely selfish point of view, we hope it will help A&O to have deeper and different conversations with our clients and deepen our relationship with them.”
The new venture pushes A&O into the territory of technology developer and collaborator, at a time when law firms are having to define what they are and what they do. Is Fuse consistent with the elite firm’s brand?
“I spend most of my time engaging with that question because technology is throwing up opportunity and the thing about opportunity is that you can pick it up and run with it, or decide it’s not for you,” says Brayne.
“We’ve tried to create, over seven or eight years, an environment where we’re very open to opportunity. We have a well-defined brand for quality and rigour and that’s our natural space but what we don’t accept is the old-fashioned view that some types of work are high end and interesting and others not so high end. We think most types of what people typically call high-end work have a volume requirement and also require high end strategic input and to deliver a good client service you have to do both well.”