Can you explain exactly what your company does and what problem it solves?
Axiom exists to help transform the legal industry for the better. At approximately one half-trillion dollars it is the world’s second largest and arguably most important service economy, but in practice, it hasn’t experienced meaningful change in a century. A built-for-purpose 1,000 person specialty firm, Axiom is driving innovation into the operating model for managing risk and helping clients manage legal work more effectively by employing a radically streamlined cost-structure, technology and accumulated expertise in the business of law.
How did Axiom get started?
When I was an associate at a large white-shoe firm, I was asked to prepare a bill and couldn’t ignore the discrepancy between my income and billable rate. This realization led me to think about all of the things inside a firm that were unnecessary; fine art, mahogany, enormous law libraries long since replaced by internet research. These things felt anachronistic for an industry that is largely information-based. I was particularly stuck by the fact that both parties to the service exchange were unhappy: clients were universally frustrated about their legal expenses and attorneys felt overworked and underpaid. For both sides of the exchange to be unhappy, this wasn’t simply a bad bargain, it was a bad exchange.
Our challenge was to figure out how to pull the exchange apart – accounting for advances in technology – and then put it back together in a way that made more sense and left everyone better off.
Constantly pulling the legal service exchange apart and putting it back together in ways that advantage and serve the industry is Axiom’s long term journey. Fifteen years since we began, the firm is passing $200 million in sales and is changing the industry’s operating model for managing risk. Axiom serves nearly half of the Fortune 100 across 10 offices and four delivery centers globally.
What are some of the specific challenges you’ve faced as the company has grown and how have you successfully addressed them?
We’ve had to reinvent ourselves two or three times. In 2008 when the financial markets imploded roughly two-thirds of our clients were large banks. We had to reposition ourselves in the minds of our banking clients. Prior to this moment, Axiom was seen as an enabler to the banks: access to lawyers who would help them keep up with the growing demand for their products and the legal services necessary to bring them to market. Suddenly, we had to pivot and become a company that could help them solve the giant problems they were facing and drive meaningful change. When one of our biggest clients gave us three business days to drop our rates by 20%, we showed them a pie chart highlighting Axiom’s 8% slice of their total legal spend. We agreed to the reduction on the condition that they would let us take a hard look at how we could save them 50-70% on the 92% of legal spend we hadn’t previously had the chance to address. Ultimately we had that same conversation with a handful of other banking clients, all with positive results. We tripled Axiom’s business over the next three years.
Tell us about your decision to bring in an equity partner.
One of Carrick’s founders was on our board prior to the formation of Carrick Capital Partners. Around the time Carrick closed their first fund, we were thinking about raising a little money, but what we needed and wanted more than capital was to continue the partnership that had delivered so much value. I think many people imagine that when entrepreneurs receive private equity, they accept the advice because that’s the price they have to pay to get the money. But in our case it was almost the opposite, we didn’t mind the money, of course, but what we really wanted was to keep people on our board who had a real passion for the Axiom mission and could share their unique experience building transformational businesses.
What are the benefits of working with a group like Carrick Capital Partners?
We are used to having financial partners but what differentiates Carrick is the depth of their involvement and the magnitude of effort they invest in our company. The energy, attention, and networks they bring to the table are extremely valuable. It is as though their sleeves are rolled up, and we are building the business elbow-to-elbow. One area where Carrick was instrumental was in building our board of directors, including playing an important role in the recent addition of former Chairman of the U.S. Securities and Exchange Commission, Mary Schapiro.
What’s your advice for other growing businesses considering private equity?
Pick your partners primarily on the character of the people doing the investing… after that, what matters most is their commitment to your space and their experience working with other companies with related businesses.
What are you most excited about at Axiom and what’s next?
I believe that we are changing the game in legal and compliance. We have an enormous opportunity to make a real difference by building a great company that could become the world’s largest, most innovative provider of legal services.