Chambers & Partners has acquired Top 3 Legal, an online platform that helps businesses to manage their relationships with law firms – Chambers’ first acquisition of another legal directory since the company was founded in the 1980s.
At the heart of Top3Legal is a database with 160,000 lawyers in 150 countries, all of whom have the option to claim a profile, which they then control.
Alongside input from private practice lawyers, in-house lawyers can access live information from colleagues and peers in other companies to help them identify suitable external counsel.
Top3Legal’s flagship feature is what it calls a Team Sheet, an online interface that allows in-house counsel to manage a private network of outside lawyers.
Users can leave comments – anonymously if preferred – and recommend lawyers.
Akin to a “BigLaw” version of Avvo, Top3Legal uses the so-called “freemium” model common to online profile sites, whereby a standard profile is free, but revenue is generated by users who opt to take enhanced profiles.
Top3Legal was founded by three UK-based lawyers: Gareth Stephenson, who was a corporate partner for 20 years at Freshfields Bruckhaus Deringer; Richard Fleetwood, a partner for 20 years at Addleshaw Goddard; and Richard Shoylekov, a former general counsel.
The deal hands Chambers, acquired by private equity investors in 2018, one of the most promising new-generation legal directories, and one that was built from the ground up as a digital business.
Having talked frequently about its “digital strategy” since it came under new ownership, Chambers now has a native technology platform that it can integrate into its business.
What this will look like to outsiders is unclear for now, but it’s a new frontier for Chambers, which has never previously invested in another legal directory/publishing business – preferring until now to do everything in-house and organically.
With Top3Legal having built up a large database of in-house counsel, an obvious benefit for Chambers is that it can layer this on top of its own database, gaining access to more buyers of legal services and strengthening its in-house relationships further.
Chambers’ relationship with clients – its ability to call thousands of them every year and ask them to reveal which law firms they use and like, and why – is pivotal to its success.
It’s the reason that, despite the burdens and unpredictability of the research process, law firms continue to willingly engage with Chambers, and supply the company with extensive written materials and long lists of client references.
Law firms want clients to say positive things about them, and they want Chambers to publish those glowing reviews.
Chambers will now find it easier to shrug off the oft-repeated criticism that it recycles the same old faces from year to year, that its lists reflect how things used to be rather than how they are now.
With a dynamic digital property within its stable, it can respond to market changes faster, connect with more lawyers, spread itself over more practices and industries, develop more nuanced coverage of specialty markets, and identify more junior lawyers.
All that becomes much easier when you’re not constrained by having to ensure that human researchers are responsible for all content.
Branding will be an issue, however.
Chambers has always concentrated on a tiny slice of the upper end of the global legal market, but Top3Legal potentially opens up its business to a much larger chunk of the market – since inclusion in Top3Legal is not determined by a selective assessment like the traditional Chambers review process.
That presents Chambers with an opportunity to go deeper into the market and target – both for content and commercial purposes – numerous law firms and lawyers that do not currently engage with Chambers.
But it also poses a significant positioning challenge.
Chambers has built its entire business around exclusivity and a sought-after cachet.
That means a high barrier to entry, rejecting most applicants, and adhering to strict entrance requirements in an effort to focus only on the most sophisticated lawyers and firms internationally.
Now you have a product with a universal ethos, so Chambers will have to think carefully about the extent to which they integrate two different businesses, or whether they are kept at arm’s length, so as not to dilute its high-end brand.
In some ways this tension harks back to a division that emerged between Chambers and Martindale-Hubbell in the early 2000s.
Martindale – the legal directory gorilla of its day – was keen to buy Chambers, but its offers were rebuffed at the time (although there did follow a short-lived joint venture in which both publications carried limited information about the other on their respective sites).
Deals fall apart for many reasons, but trying to combine a product focused on the top five percent of the legal market with one with over a million lawyer listings was never going to be easy.
That was 15-20 years ago, things may be different now.