(Crypto) money is important, but it’s not our core value
Check out the recent interview with Dima Gadomsky, CEO of Axon Partners, published in Yurydychna Gazeta.
Interviewed by Iryna Nikitina, strategy and development adviser http://irynanikitina.com/
We had another interesting meeting of our “Hi, I am a Future Partner” club. We had the most exciting discussion focused on the latest trends in the legal industry. Our previous guests were partners of leading Ukrainian law firms, including Serhii Sviriba, managing partner at Egorov Puginsky Afanasiev & Partners (Ukraine); Alexander Minin, senior partner, attorney-at-law at WTS Consulting Ukraine; Anna Babych, partner at Aequo; Mykola Stetsenko, managing partner at Avellum; Timur Bondaryev, managing partner at Arzinger; Andriy Stelmashchuk, managing partner at Vasil Kisil; Anna Ogrenchuk, managing partner at LCF Law Group; Igor Svechkar, partner at Asters; Oleksandr Martynenko, head of Kyiv office, CMS Cameron McKenna.
Our guest today is Dima Gadomsky, CEO at Axon Partners, a law firm that has taken the risk of being different in a quite conservative market and is committed to the idea that innovation starts with creativity. The interview is published in The Pressure of Success section in Yurydychna Gazeta (Legal Gazette). You are welcome to join our club meetings and get to know a lot of prominent people working in Ukraine’s legal industry.
Welcome to the Club!
How did you come up with the idea of creating a law firm committed to reimagining legal services?
I’ve wanted to create a firm like that since the day I became a lawyer. So, it’s been eleven years. It’s just that I didn’t know that I actually wanted to do it before this big day. Actually, I can’t remember what day it was. Anyway, I was not sure whether I was doing the right thing back then.
I thought, “I need some advice from someone who’s wise.” So, I flipped a coin …
I used to work in big consulting companies with this corporate culture and people thinking I was kind of a little bit weird. I remember one managing partner once said something like, “Gadomsky, the partners say you’ve been crawling through the office at the pace of a crazy snail.” I have always thought that corporate culture is a failed attempt to create some kind of religion. Now I realize I did not actually fit in any company I used to work for because of this whole corporate culture thing.
You see, people think that wearing a suit makes you a good lawyer. Well, that’s until someone proves otherwise. I haven’t been able to admit it before, but now I’m going to be honest. I have never thought of myself as being a brilliant lawyer. So, I used to wear a suit so that no one could find out that I’m not a genius, just like other lawyers did. I was lucky since I never got caught. Besides, I’ve learned lots of useful things that help me to run my own company. You know, I wanted to build a company where people share the same values. It doesn’t really matter which values. What matters is that people do share values and their goals are kind of more ambitious than just making money and leaving the company for a competitor. I mean, I wanted to build a company of smart people who want to work in an innovative, friendly culture.
What makes your partner relationships special?
Well, we did not invent anything new. That’s just how Silicon Valley startups work. We started with four founders holding equal shares of 20% of the company’s equity. Later on, another five people who had been with us from very start got their shares (actually, they had their employee stock options that were exercised the day they had been offered a year before). Later on, we launched our office in Lviv and associates got their stock options as well.
Today, 50% of Axon’s shares have been distributed and we have 11 people listed in our cap table. The remaining 50% have not been distributed: we are going to use them for investors, stock options for new employees, and shares for new partners. Besides, we are going to increase the shares of our current partners.
As we see it, partners are the owners who manage the company and get dividends for their work. To be a partner, you don’t necessarily have to sell products. Our founding partners have the same voting rights as all other partners: one person has one vote.
In Axon, people are free to make their own decisions. It does not mean that anarchy reigns in our company but it does mean that people are more important to us than any processes. Let’s say, if a junior associate feels that breaking some rule at this particular moment or inventing something new is what’s best for the client, he or she can go ahead and do it.
What do partners get from owning shares?
Right now, I can’t make a full list of all the things our partners get from owning our company’s shares. We are still writing roles’ accountabilities and building the circles (for now, we have nine circles: people, marketing, legal tech, processes, etc.). To put it simply, owning a share means owning a company. Our partners do the same things that partners in classic law firms do. But in Axon, nearly every member of our team is going be a partner. Voting rights do not depend on the size of a partner’s share. However, dividends are paid out according to the size of a partner’s share in the company.
Here’s the problem. Law firms do not own any assets. Therefore, it’s hard to tell how a partner is going to sell his or her share. Or rather, how anyone can buy a share from a partner. We haven’t yet worked this issue out. I have a feeling that the solution lies in our investments in legal tech. We should add value to a share. And well, the fact that we take part in legal tech projects produces this added value.
Do you have any strategic planning, KPI, goals?
We don’t do any strategic planning since we haven’t finished building our business model yet. We’ve been testing various approaches and as soon as we find the one that works best for us, we are going to build our scaling-up strategy.
It’s not that simple with KPIs as well. Most people in Axon, including myself, don’t think it’s actually efficient.
We’ve been assessing our junior and senior associates’ performance from the very beginning. Still, we haven’t done any performance assessment for our partners. But since we’re planning on giving bigger shares to our current partners, we do need to develop some performance assessment criteria. We’ve been putting off issues like that since we had more important tasks to deal with.
What is your key role as a partner?
I asked myself the same question a couple of months ago. When we started our company, we did not want to built it around any key figure. It turns out, the company is able to work and develop without me. You see, for the last five years, I’ve been trying to focus on business development and spend less time doing lawyer work. I’ve been doing it on purpose. Over time, I quit doing some other things, like dealing with finance, hiring new people, etc., which I did not even notice. I guess this happened because other partners did things like that better than me. At first it freaked me out. Since our company is very open, even our junior associates are perfectly able to figure out that I am becoming less and less useful. But now it’s fine by me since I guess I have realized one important thing: you should do only things that give you butterflies in your stomach (plus things no one else can do). So, I am focusing on three things (and I am part of three circles): business development, marketing, and legal tech. In addition, I create content, I do some sort of a literary editor’s job, I test new channels and forms of communication with our prospective clients, including text blogs and video blogs, messenger channels, etc. In legal tech, I’m in charge of scouting for new projects and product development.
Besides, I’m still doing my lawyer work. I’m running a number of projects and from time to time I work as a senior lawyer, i.e. as a document reviewer, in some projects managed by other partners.
What does Axon invest in and how?
We don’t invest money. To make investments like that, we have to have a strategy, someone with expert knowledge in this area, and money. We reinvest our profits back into our core business and right now, it’s not a good idea to take any money out of this core business.
But we have extensive experience in venture agreements and providing legal advice to startups. People in the venture investments market know us well. That’s what we offer to legal tech projects. We are trying to pull in some people with some ideas. Although we don’t invest in ideas, we help find the money for these ideas or talk a client out of an investment round.
We want to build an ecosystem for legal tech, so that legal tech products could hit the global market and compete with American and European products. The thing is, Ukrainian lawyers can’t compete with lawyers from the US or EU.
I doubt that anyone in Ukraine is able to develop a legal tech product that will conquer the world. To make it happen, a lot of people have to get together and build an ecosystem and a competitive environment. That’s how we are going to get money and expertise and make Ukraine part of the global legal industry.
Where do you find your clients?
Actually, we haven’t got any scheme. In Axon, people do what they enjoy doing: some of them create content, some communicate with clients, some give speeches at conferences, some are in charge of communicating with other law firms, etc. We don’t have any sales system and never use the word ‘sales” inside the company. It’s kind of old-school and it seems like it’s completely out of character with the way we see the whole law thing. You know, we don’t think of law as if it were the art of all good and fair. But that’s how we work. We do only passive marketing.
Here are a couple of curious things I’ve noticed. A lot of our clients find us thanks to Facebook after posting something like, “We need a lawyer who can do an ICO. Any ideas?” A lot of big clients get attracted by our website, although most people in the legal industry think that websites are a poor marketing tool.
Who is your perfect client? Who do you work with?
We always know who is not our client. We work only with the IT industry and tech people (for example, agricultural and pharmaceutical companies engaged in IT-related projects). We don’t engage in family dispute resolution, we don’t register companies or trademarks — that’s what we hand over to other lawyers.
So, what do you do? Corporate law?
Well, we don’t do anything else. And that’s fine by me if that’s what people in other law firms think.
Where do you see your company in a few years’ time?
I freak out every time I think that one day I will come to our office and see 300 people whose names I don’t even know. On the other hand, we’ve been testing things since we want to know how and when we should scale up. It’s going to be easier once we come to realize it.
That’s why during our strategy meetings, people say things like, “It is not that important for now, but how will it work when we have 200 people?” We are working on margin expansion by making processes simpler. By the way, bots are very useful if you want to simplify processes, both internal and external.
We want to become a product company and create products, not processes. Litigation as a product or international corporate structuring as a product. And it’s not only about legal tech products. Using this product approach in a service business makes you think of whether it is useful for your client, how soon it can hit the market, you think of product design and similar products produced by competitors.
I am sure that the legal industry will be going through hard times, so we need to build our own small ark. British and American law firms are not experiencing any crisis, they are doing just fine and behave like Kodak, a company that produced only film cameras and refused to produce the digital cameras they had actually invented. We are trying to find this ‘digital camera’ in the legal industry.
What is it that makes Axon a team?
It is trust. Besides, we share the same values and have more or less the same vision of how we should develop.
Company values are the values of people who have founded it and who work in it. It’s not like someone invents some new values and says, “Okay guys, from now on, our main values are (a) family, (b) one for all and all for one, and © a friend in need is a friend indeed.”
To understand what a company’s values are, you have to look at how this company works. I think it’s kind of weird when some company’s values are listed on its corporate website. It is way weirder when a company claims that honesty is one of its core values, while it’s no secret what exactly this company does to win cases in court. So look at Axon Partners and figure out for yourself what our values are. If you ‘read’ them as we do, then we did a good job defining them.
For some companies, money is the most important thing. We do think that money (in particular, crypto money) is important, but it’s not our core value. If we wanted to make money right here, right now, we would establish a sales department, we would not be that committed to providing high-quality services, we would tell more scary stories to our clients, and we would sell them services they didn’t actually need.
It’s important that we do what we really enjoy doing while being engaged in law. Meticulous nerds draw up contracts, sociable ones take part in conferences and meetups, those who are creative create new and interesting content, and those who have this entrepreneurial spirit create new products.
You know, money is a sort of applause. If you work only to get another round of applause, you risk becoming a lame pop performer. If you do what you enjoy doing, you become a magnet for people who share your values.
As we started our company, our goal for the first year was to survive. We were not sure that what we did was actually building a blue ocean, rather than committing suicide. But, we did survive. Now, since we want to make our blue ocean bigger and not to drown in it, we should set new goals.
You claim you are not like other law firms and you use this ‘we and they’ thing. Why?
It’s quite possible that some people see us like that, but we never said we were different and we never used ‘we and they’.
Some time ago, when I was leafing through Blue Ocean Strategy I realized that this is exactly what we’ve been doing — we are building this blue ocean in the market. We do not want to be aggressive punks and we think that most lawyers in Ukraine are sane people. We just want to show that doing business and making money in the law industry can be fun. And yes, we do wear casual outfits, but they don’t ban us from law conferences; we do use swear words, but other lawyers read articles we’ve written. We are part of the legal services market, whether people like it or not.
I mentioned this movie during the interview. I guess, it is more or less about what we do. I am not going to give you any torrent or online links. Here you can watch the trailer:
