In what ways has your business been impacted by the Covid-19 pandemic? Has the pandemic led to any innovations in your working practices?
From the moment we opened our Italian branch for business in Rome and Milan, we at Orrick have always pursued the goal of presenting ourselves to the market with a two-fold approach.
On the one hand, we aim to offer the highest-standard assistance, supported by state-of-the-art legal technologies and our international expertise and know-how.
On the other, in order to win engagements and secure long-lasting client relationships in a national market environment, which is still deeply rooted in tradition and proximity, we strive to be close to our customers and business partners, trying to listen to their requests, to anticipate their needs and to enrich our service delivery ensuring human as well as professional support. In other words, we commit to offer today the legal products of the future with a warm and welcoming attitude, which is ever so often associated with the good practices of the past.
As the events surrounding the pandemic unfolded over last spring and summer, and we had to move the majority of our work to remote, we faced the dilemma of how to prevent that same attitude from being turned colder and more distant by the physical distance that we were forced to put not only between us, our clients and collaborators, but also among ourselves as members of a team. As the rest of the world did, we too wondered how to be close to someone without being necessarily near them.
For instance, working remotely over an extensive period of time has been challenging for our M&A team, being us so used to working together and relying heavily on our proximity for efficient service delivery and team’s morale.
Luckily, even if one of the two pillars of our foundation was at risk of crumbling, we were able to thrive on the balanced and reliable features of the other, as the IT resources we had prudently stacked over the years helped us bridge the gaps dug by the virus.
On our inner front, I am proud to state that we have been able to overcome this challenge posed by exceptional circumstances, by scheduling three morning videoconference a week for organizational purposes over the whole lockdown period. The goal of this routine has never been of course overseeing our team members, as mutual trust is an Orrick cornerstone and trademark, but rather keeping them motivated and soothing their eventual disorientation in adjusting to the new smart working modality.
Needless to say, we have not been idle even vis-à-vis our clients either, keen as we have always been to provide them with updated legal solutions to contemporary issues. In fact, not differently from any other period of crisis, also the present one caused by the spread of CoVid-19 can represent a source of opportunity for a cunning and proactive professional.
Treasuring this belief, we have been exceptionally active during the last months in analysing the new regulatory framework (issued by the national authorities in consequence to the pandemic) and in breaking it down for the benefit of our clients, in order to offer legal guidance and the insights needed in a constantly changing environment (i.e. drafting short memos and operative guidelines as well as addressing spot legal issues).
In this regard, one of our proudest achievement here in Italy has been the creation of the firm’s national Covid-19 Resource Center, an online and open-access collection of material from across our practices, specifically designed for guiding our clients and answering commonly asked questions surrounding the pandemic.
Another virtuous example that we would like to recall in this respect is the recent closing of an acquisition operation involving two leading players in the info-commerce market, in which Orrick acted as deal counsel of both parties. As the closing of the operation was scheduled during the lockdown period, we have been able to manage the whole process remotely by using DocuSign, the cutting-edge electronic signature platform that allows the firm’s users to send, sign and manage documents securely in the cloud.
Our clients have indeed expressed their satisfaction for our streamlined and cost-efficient approach, and therefore I believe this is a good example of how tough times help developing solutions and good practices that can be implemented to enhance our professionality on a regular basis.
International law firms have an increasing presence in Italy. What does it mean for the market and do you think in the future we’ll see a prevalence of international firms over Italian ones?
More than a decade ago, when we first brought Orrick legal brand in Italy for the first time, betting on the growth in the international law firms’ presence over the national territory was indeed far from being a wild guess.
Mastering the craft of a successful business lawyer has always relied heavily on our ability to maintain market conditions under close scrutiny, and doing so in Italy means to soon realize that in the latest part of our economic history local companies (and consequently law firms) have developed a follower mind set: they strive to early determine what business models prove to be successful and profitable abroad, and then to replicate it in our country, sometimes, unfortunately, without having particular regard to the need to adapt such models to the specifics of the social and economic context.
When Orrick first landed in Italy, the national economy was in the midst of a paradigm shift (in some ways still underway), as it sought to emancipate itself from the model of the SMEs that had always constituted the cornerstone of the Italian production system and instead to adhere to the model of the large corporate entities that have extensively shaped the global market landscape over the twentieth century.
At that time, both the few large public national companies and the new corporate venture capital struggled to meet the increasingly complex requirements from the regulation bodies and authorities, and therefore harboured growing legal needs. Consequently, in order to serve such these clients effectively, large law firms needed to grow so they could address increased demand for legal services, add specializations, and serve their clients around the clock. In other words, the imperative for legal professional was coming together with the aim of becoming a one-stop shop for corporate clients focused on business law and transactional work. Failing to do so, often resulted in being exposed to the risk of losing prestige and market shares.
However, the main feature of the market landscape is doubtlessly its ever-changing nature, and in our view today it would be inaccurate to say that the thumb rule “grow international or go away” still applies to all cases. As a matter of fact, whereas the organic growth of early elite law firms in the last years has been a direct consequence of increased demand for corporate legal services by large entity clients, it is difficult to foresee if such a demand will keep holding in the near future, or assess if it will always inevitably entail the organic growth of large law firms.
As long as the Italian professional market is concerned, it could be arguably stated that one size does not fit all, especially if the following circumstance is taken into consideration: in addition to the ongoing survival of the traditional small and medium-sized enterprises that have long supported the national economy, we are currently witnessing the soaring growth of the innovative SME and start-up sector, assisted by the important legislative support actions put in place by recent governments.
After all, it would not be too bold to infer that the development and diffusion of these new corporate vehicles may in some ways constitute an obstacle to the rooting of large private companies (on which large law firms depend) on the Italian territory, forcing it to remain to some extent an unfinished experiment.
Therefore, in such a diverse and fragmented market environment, some long-established global law firms like Orrick could still deem effective and profitable to further expand their activities here in Italy, by opening offices and by recruiting local attorneys with the goal of targeting the business of local corporate clients.
On the other hand, many national law firms might consider preferable remaining national actors, offering more localized expertise, with or without the support of a global lawyer network retained via outsourcing and off-shoring only.
In a nutshell, we do believe that the fate of large law firms in Italy lies not on a generic commitment to grow organically, but rather on their attitude to develop and implement smart strategic growth plans which can result attractive to their client base and tailored on its needs.
How does your firm use legal tech and how does this benefit clients?
We deeply appreciate that ever-increasing quality and value is a key performance metric for our clients — both with respect to their outside service providers and their in-house teams. In response, we have made innovating in legal service delivery — through alternative staffing, use of data and technology, effective project management and tailored solutions — one of the tenets of our global strategy. Our legal technology & innovation platform originated seventeen years ago when we opened the first legal in-sourcing center in West Virginia which is now our hub for innovation.
Below is a snapshot of our client-focused innovation strategy and the ways we use technology to increase efficiency and reduce costs:
- Creative Staffing. Our strategic goal consists in developing and integrating novel roles within our client teams. This includes career associates, project lawyers, data scientists, statisticians and technologists, project managers who help streamline legal technology processes and business analysts who automate standard forms and develop client tools to support common legal actions. These team members are embedded within our client teams, helping to create the best mix of lawyers and specialists to ensure efficient and effective service teams that help mitigate risk for clients.
- Legal Technology & Data. Many legal problems today demand a strong data and case management strategy. That’s why we built Orrick Analytics — a sophisticated AI, contract management and data analytics center. Our team of specialists is equipped with cutting-edge technology to make the most efficient and effective use of data embedded in our matters. In 2019, Orrick Analytics provided more than $26 million in cost savings for our clients over the traditional model. We also use Orrick Analytics in a transactional context. In 2019, we used AI-powered due diligence review of 15,000 contracts to save our clients 50+% versus typical associate rates.
In addition to the work of Orrick Analytics, we offer highly-sophisticated and proprietary case management platforms to clients for use in certain matters:
Joinder. We’re in the midst of launching Joinder, a first-of-its-kind legal collaboration platform that will transform the way we work with our clients and the way companies access legal work from their outside firms. On one user-friendly screen, clients are able to connect with their lawyers through a secure workspace that supports collaboration, close matter management and shared access to a comprehensive AI-organized matter file. The tool gives companies unprecedented access to and control over their legal work. Joinder was developed at Orrick and is currently in use by more than 1,000 of our clients.
CaseStream. Additionally, our case management platform, CaseStream, combines 1) the development and smart use of technologies, 2) effective staffing for a superior application of project management and 3) streamlined processes that optimize use of all resources. Each new project has a dedicated project assistant assigned, filings are posted in real time, calendars and dockets are maintained, transactional documents are organized, and deadlines and tasks are tracked.
We also ensure timely, accurate and cost-effective information sharing through the use of various third-party legal technology platforms. Through our cloud-based platforms, we provide seamless document editing and review, custom applications developed to track critical business information and project management reports and billing summaries. For clients considering sensitive transactions such as financings or mergers and acquisitions, our extranets can also include virtual data room capabilities with security and digital rights management, including watermarks and restrictions on printing and downloading files.
Additionally, we track, develop, and invest in custom legal technology solutions for clients to encourage continuous improvement. Orrick Labs is our internal skunkworks-styled operation to build technology solutions we cannot find in the market. Recently publicly launched, The Observatory is an Orrick tool we use to track more than 600 legal technologies and collect feedback on their performance. And our Legal Venture Tech Fund was created so that we can invest in new technology to help bring better tools to the market faster. In 2019, we invested in Reynen Court, a new “app store” for legal tech.
We develop our own tools to enhance the client experience and provide added value. These tools include The Direct Lending Portal, a web-based self-help centre for our corporate direct lending community, including document generators, samples and forms; our GDPR Readiness Assessment Tool, which enables our European clients to evaluate their readiness for adhering to the General Data Protection Regulation; our IPO Ready Tool, a first-of-its-kind tool created in collaboration with Long Term Stock Exchange (LTSE); our Mr O’Whistle Tool, which enables our Italian clients to be compliant with whistleblowing legal framework and Legal2Manage, Easy2Check, IP Safe and Easy2Gov, four collaboration platforms which allows our Italian clients to keep their contracts always up-to-date and to manage compliance matters (231 Decree, IP, listed companies’ regulation) with an innovative approach.
Another unique data offering from Orrick’s Cyber, Privacy & Data Innovation practice, which utilizes our Joinder technology, is Privacy in a Box. Orrick’s Privacy in a Box offering provides clients a framework to strategically manage data and optimize global privacy and security law compliance in today’s collaborative, virtual environment—including best-in-class global privacy policies, procedures and playbooks, a project management dashboard for key data management functions and an incident response program.
- Tailored Client Solutions. Our innovation team understands that our clients are focused on digital and business transformation, including transformation within their legal departments. Our innovation team regularly consult with our clients to help them accelerate change and leverage technology, creative staffing and process improvements to drive greater quality and efficiency from their work internally and with outside counsel.
Italy was the first country in Europe to be hit by the Covid-19 pandemic and to implement a hard lockdown. What was the impact on the market of this early and particularly harsh confrontation with the virus and what were you able to learn?
From our standpoint, the virus has had a multi-layered impact: on the one hand, as mentioned before, it affected our ordinary working practices, while on the other it influenced the kind of assistance requests we started receiving from our existing clients over the last months.
As long as the working modalities are concerned, since the very beginning of the pandemic the firm has adopted a full prevention policy, in order to grant our lawyers and employees the possibility to work remotely with the same tools that are available at our offices, as well as to have physical access to such offices in complete safety, should the urgent need arise.
To this end, beside our top-notch IT standard equipment, an additional range of software resources and ad hoc training sessions on how to use them were made available to Orrick’s population. In particular, we have currently in place a special section of our intranet designed to maximize attendance to such training sessions. The concrete results of such actions have not been slow to appear: each of our professional has been enabled to gain access to online documentary resources and instant communication tools vis-à-vis both colleagues and clients, as well as to take part to Court hearings which have taken place via Microsoft Teams.
With reference to the physical premises of the firm, the latter have been equipped in such a way as to ensure their compliance with emergency regulations, without prejudice to the possibility of accessing them in all cases where this is required by an unforeseeable needs (i.e. activities to be carried out in person), always relying on our complete set of safety measures, ranging from individual protection devices to case-specific social distancing measures.
Furthermore, the spread of the pandemic has led to significant changes in the assistance requests we have been receiving. Such new requests were of course different depending on the specific sector in which each of them operates.
As a matter of fact, in this respect a clear distinction can be drawn between those sectors that have suffered the diffusion of Covid-19, incurring in material turnover losses, and those which, on the contrary, have achieved an increase in their demand for goods and services as a consequence of the pandemic.
The emergence of different business needs has therefore led to the provision of wholly different kinds of assistance by the firm. In any case, the scenarios opened by the pandemic have also resulted in the opening of new matters, with particular reference to the commercial real estate lease sector, in which many asset management funds (which are among our long-standing and most prestigious clients) are very active.
Even if it would be hard for anyone to precisely outline the framework of the post-COVID national contingencies , as of today we can already state that this dramatic experience brought with it at least two important lessons: the first on the importance of planning beforehand the organization of work, the second on the need to foresee the kind of requests we shall stand ready to accommodate in a crisis situations.
With reference to the first aspect, the lockdown experience has accelerated a social and economic phenomenon that had already been taking place all over the world for a long time, but which has had more difficulty in gaining a foothold in Italy than elsewhere: the digital revolution. As the smart-working modality has been progressively replacing the traditional office-based work, our attitude towards the use of new technologies has shifted as well: what was seen before as a mere occasional and palliative measure, has now become the primary tool to exchange information and legal documents. Consequently, our lawyers and collaborators are becoming each day more autonomous in the management of such IT tools.
As regards the second aspect, we now know for a fact that, in similar situations, we will likely witness a rise in the demand for legal assistance concerning the supply of essential goods and services. In this context, we have also noted that our clients require assistance not only with reference to the traditional kinds of agreement, but are displaying a growing interest for those new business combinations (i.e. the network agreements) which are now seen by the market as the path to follow in order to overcome the current crisis and lay a solid foundation for future collaboration strategies, to be implemented when the latter will at last end.
As the healthcare and life sciences sector in Italy continues to grow, do you believe that there are any other sectors that will provide opportunities for investors in the future?
Our whole lives changed during the global pandemic, and it seems inevitable that certain changes will not vanish nor be forgotten once the emergency will be overcome. Such changes impacted not only on our individual experiences and behaviours, but also on social and collective actions, interests and values.
This had an impact also on what investors look for in their opportunities and reshaped their strategy and vision.
Indeed, life sciences – in their broader meaning, including pharma, health management, medical devices, etc – attracted huge investments, to an extent that we had never witnessed before, whose entity is still growing. Yet, other sectors became attractive as well, as a consequence of the pandemic.
Some are directly linked to the latter, for example tech. The impossibility to freely travel and move, go to the office or meet with our friends and family, forced us to increase our use of technological devices and tools. Remote working (or work from home) has been for many months and for sure will continue to be – to a certain extent – a key component of our work environment. This trend boosted the interest of investors for companies developing and selling products helping said work method.
In saying so, we don’t refer only to smartphones/devices, apps and programs designed to allow us to hold remote meetings and exchange documents more efficiently. Any (smart) home appliances which may help us in implementing a more comfortable environment, where we can both work and live, will be of sure interest for investors.
On a different note, traditional retail banking, finance and insurance activities and services will need to evolve and carry out a reshaping of their core structures, as the pandemic dramatically enhanced the use of non-traditional instruments and platforms. Retail banks and other intermediaries should make investments for a quick transition to tech-based services and operations, otherwise they risk being replaced by disruptive fintech entrants. I expect traditional intermediaries ready for such transition to attract investments.
Of course, also fintech, digital platforms for banking and financial services (such as payments and trading) and other tech intermediaries will attract great amounts of investment. However, we might expect traditional players to still be able to captivate a significant amount of the overall investments made in the sector, as they are well-known and more structured and tend to be less risky than fintech start-ups (which might indeed outperform incumbents, yet only in limited cases).
In this filed, we are seeing an active market and quite a number of transactions.
The above is strictly linked to e-commerce. Platforms for e-commerce have been growing at fast pace even before the pandemic, and I expect them to continue doing so in the coming years. There will be margin for investments, especially in sectoral platforms, focusing on specific high-quality products.
As mentioned, our lives changed, and we have been forced to adjust our whole way of working and living. Needless to say, offices will not be the same; but also residential buildings and houses have been deeply impacted. Real estate will need to undergo a structural rethinking, requiring substantial investments.
Public areas and infrastructure will need structural adjustments as well, thus capturing investments, as municipalities and local governments might not have the resources necessary to carry out said interventions.
Italy has always been an active market for real estate, I expect it to be even more active in the future.
Environmental, social, and corporate governance (ESG) factors are becoming increasingly of interest for companies and investors. Companies cannot expect to attract investments if they disregard ESG matters.
The so-called ESG investments will also be fundamental in the coming years. Europe is the leader in ESG investment, and Italy may provide interesting opportunities for companies and investors active in this field.
In a broader view, most investments will have something in common: their medium or long-term perspective and attention to sustainability. This trend, emerged in the past years, has been strengthened by the experience of the global pandemic. All of the above sectors providing opportunities for investors in the future will be only as attractive as they assume a medium or long-term perspective and factor into their strategies sustainability.
What the pandemic taught us, among others, is that we cannot have a narrow or short-term vision, nor can we neglect the sustainability of our actions. From a cross-sectoral perspective, companies are called not to act with a self-centred outlook, as investors will have greater attention to how collective sustainability of actions is taken into account.
How do you believe law firms can aid Italy’s recovery in the aftermath of the pandemic?
That is the exact same question we asked ourselves right in the wake of the pandemic outbreak, since paying close attention to the social impact of our work is part of our firm’s DNA. We are persuaded that our engagement policy should not be driven only by the profitability criterion, but shall also consider how the activities of our professionals can positively affect the environment we are in. In fact, we have always spared no effort in order to raise our profile vis-à-vis market players and institutions in an ethical way, making available to them our cultural and social capital, our skills, expertise and connections.
In this regard, COVID-19 has been forcing both public entities and companies to grapple with disruption while trying to protect employees, business continuity for customers and the long-term health of their businesses, and has been therefore a good practical example of how we believe a large law firm like Orrick can deploy its extensive array of legal and intellectual assets in providing support to the various sectors of society hit by a crisis. In particular, in this context our strategy has been articulated through short, medium and long term objectives.
As mentioned before, in first instance we have focused on providing emergency guidelines to the economic operators which were facing a situation unprecedented in recent history, by the means of the free, open-access selection of materials collected in our Covid-19 Resource Center. Our Center features best practices for employers managing business travel, facility closures, self-quarantine procedures, and business continuity, but also global privacy considerations related to medical disclosures and recordkeeping, as well as commercial tenant support.
This initiative has indeed been very appreciated by our clients, who have been able to obtain in a quick, cost-saving way down-to-earth advice to answer frequently asked questions such as whether the pandemic constitute a force majeure event that may excuse contractual performance, or what disclosure obligations should public companies comply with. All the foregoing was of course finalized at soothing the economic damage sustained by the companies during the lockdown period and hence at facilitating economic recovery once the most critical times are behind us.
Later on, we have managed to take an active role in the contact tracing management strategy put in place by the Government: as a matter of fact Bending Spoons, the company that developed “Immuni”, the app chosen by Emergency Commissioner Domenico Arcuri to track the movements of people affected by COVID-19 during Phase 2, is among our clients.
Lastly, we have put our legal know-how and market insights to good use working along VC Hub (an association of the country’s leading tech-focused funds), the Ministry of Innovation and the Finance Commission on defining the contents of the so-called “Decreto Rilancio”, the legislative instrument providing for, inter alia, the modalities of those public interventions in support of the innovative companies in the challenging days to come.
However, we did not limit ourselves to providing programmatic indications as experts to direct these public interventions, but also granted throughout assistance to the same Cassa Depositi e Prestiti (CDP), the listed company controlled by the Ministry of Economy and Finance that promotes the growth of the country, in the creation of the term sheet and the participatory contractual tools needed to make those investments in the corporate capital of Italian start-ups and innovative SMEs as envisaged by the Decreto Rilancio.
We were of course very grateful to be involved in such multiple and prestigious initiatives, which gave us the chance to provide a material contribution to the path of structural readjustment which the country will necessarily undergo in the upcoming months. This has been also the occasion to further strengthen the synergy among the different departments of our firm (for example, M&A, labour, tech, finance and E&I) in order to provide integrated assistance where needed, and to develop and expand the firm’s precedent/template library of best-in-class agreements and documents.
This has been both a memento of Orrick’s core values and a strong message we would like to share with other legal professionals on this occasion: ascribing value to the social impact of what we do every day will bring benefits not only to the subjects we assist, but also to ourselves as professionals and to the entire country system. If Italy will succeed in overcoming the challenges posed by this massive turning point, and in efficiently managing the aftermath of the pandemic, we as lawyers will be the first to enjoy the fruits of the freedom and prosperity that we will have helped to restore.
What would you single out as the key distinguishments of your firm?
Orrick’s commitment to innovation is well reflected in our focus on Technology & Innovation in Europe as well as internationally. Orrick retained the #1 ranking for #VC deal activity in Europe for over 4 years and 19 quarters in a row, according to PitchBook Data. Orrick also works alongside key players of the European tech ecosystem, in order to actively realize its potential as an engine of economic growth.
Orrick has been named by the Financial Times as the Most Digital Law Firm in North America of 2020. Our best innovations are a product of listening to our clients and our people. They also reflect the vision of our team selected as one of the top 5 Most Innovative Law Firm Business Leaders.
Over the past five years, FT has named Orrick the Most Innovative Law Firm in North America three times and runner-up twice, including in 2020. This year’s Innovative Lawyers report highlights our focus on regulatory solutions, infrastructure modernization, building a more diverse and inclusive profession and developing the workplace of the future.
- The launch of Privacy in a Box — a platform that enables companies to strategically manage data and optimize global privacy and security law compliance.
- A better solution for financing affordable housing – through our collaboration with the California Housing Finance Agency on permanent supportive housing for the homeless in San Francisco.
- Standing up for racial justice and equity both in our communities and at our firm – including our launch of the Orrick Racial Justice Fellowship program and our use of bias interrupters, as a founding member of the Move the Needle Fund.
- Our 2020 summer program – a laboratory for new approaches to remote working.
To learn more about innovation in legal service delivery, please visit Orrick’s new platform: The Observatory.