Is HELO what it’s all about?

February 25, 2013 | Author: admin | Category: Uncategorized | Comments (0)

Posts to date on this Blog have focused on some of the structure and operational mechanics of traditional legal service organizations, particularly law firms. While the HELO website contains explanations of how HELO works in providing services, the underlying rationale is not discussed in detail. This post will provide additional insight with the goal of imparting a better understanding of the acronym “HELO.”

HELO is intended to be a simple organization, both for HELO participants and for their clients. HELO lawyers have analyzed the traditional ways by which legal services have been delivered by large law firms and determined to design and implement a services delivery vehicle which addresses two primary concerns of any client – quality and price. Lawyers have traditionally marketed their services on the basis of quality, but not on price. There are valid reasons for the prior failure to market on price, but those are now of little import except to the extent that this previous behavior has resulted in organizational structure which is difficult to change. Law firms are now scrambling to learn how to factor price into their marketing and services delivery, but because of their general structure and organization, it will not be easy.

HELO is organized to deliver high quality services at very competitive costs. How this is done is the product of the analyses of the HELO lawyers. First, unlike traditional law firms, HELO requires a minimum experience level for its lawyer participants. This means that only experienced lawyers, who will not spend as much time on research, document preparation and negotiation, will provide services. The result is increased quality and greater efficiency in the provision of services. Since HELO participants do not have the pyramidal structures of traditional law firms, with highly paid, inexperienced associate lawyers, there are no fees which result from their efforts (and the efforts of more experienced lawyers to manage them). Second, because HELO participants are not located in a single location (resulting in lower space costs), do not employ significant numbers of support staff or associate lawyers (if any), and take advantage of advances in information and communications technology, it is not unusual that the overhead of the average HELO participant does not exceed 20% of the overhead of many large law firms. Since large law firm overhead expenses can be 50% or even 60% of revenues, this factor alone provides HELO participants with a significant pricing advantage.

If there is a weakness in the HELO model as presently constituted, it is in the inability of HELO participants to assign significant numbers of service providers to large engagements. This inability, however, is more perceived than actual. HELO participants, to augment the number of service providers necessary to complete an engagement, access experienced lawyers and legal assistants provided by independent providers of legal personnel at a fraction of the costs of inexperienced associate lawyers. The costs of these service providers are passed along to clients at significant savings. However, the question of whether a lack of a sufficient number of service providers is a real problem should only apply to few extremely large transactions or to a legal field significantly out of the ordinary and for which demand is rare. HELO participants, for example, have completed complex corporate transactions of over $60 million without the need for more lawyers than are available within HELO – and at substantially lower costs than large law firms in those transactions.

So that’s it. Very simple, and if you think about it, it’s just a slightly detailed explanation of “High Experience and Low Overhead” – HELO.

[The author of this post is Wynne James]

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