Natasha Harrison, founding partner of Pallas Partners LLP, spoke with Burford Co-COO Aviva Will in May 2022 about starting her own firm, the value of structuring a firm as an ABS and the importance of diversity & inclusion, pro bono work and the environment.
An edited transcript of their videotaped conversation appears below.
Aviva Will: Earlier this year, you launched your own litigation boutique, which you called a different kind of law firm. Tell me why Pallas Partners is different, and why is that important?
Natasha Harrison: We’re different because we’re starting from scratch, and we’re not shackled by years of bureaucracy or ways of doing things in a certain way. I took a blank piece of paper and wrote, “What should the modern law firm look like if you’re starting from scratch?” and brought it from there. For example, we put diversity and inclusion at the very heart of the firm and pledged to have diversity parity by 2025. We’ve invested heavily in technology to improve client service and client delivery. And we’ve also put the environment at the heart of the firm with pledges to become carbon neutral by 2025.
It’s about creating an environment in which associates, partners and business support staff can thrive and deliver outstanding service to clients, an environment where clients have best-in-class teams who are operating at the very highest level.
AW: That’s very inspiring to me, having started Burford 13 years ago with really a blank sheet of paper also and saying, “What kind of place do I want to work in?” Talk about how you think about training and developing the next generation of lawyers and what kind of change is needed from “old law” to what your new version of litigation looks like.
NH: Training in black letter law is very important and always will be important. But there is an increasing need for lawyers, and litigators in particular, to be educated in the business of law; to understand how a law firm works, the financial cycle and business development; and how to bring in clients and maintain client relationships; and to understand technology. Because whether we like it or not, technology is becoming increasingly important within the legal field. It’s understanding the opportunities that technology can provide to a law firm practice. In addition to black letter law, all those aspects are important.
“[It’s important to make] sure our young lawyers understand the commercial dynamics and the business case involved in any piece of litigation.”
Most important though, is making sure our young lawyers understand the commercial dynamics and the business case involved in any piece of litigation. They’re not just turning through step after step in the ordinary way; rather, they are doing solution-led litigation, which delivers the right results for the client.
AW: That is so important. In my part of the legal landscape, in legal finance, we talk to lawyers all the time. They are so smart and capable as lawyers, but don’t always understand the commercial side of how to address client needs by getting the results that clients want and not just getting a good judgment.
NH: Agreed. Very rarely does a client want to go to the Supreme Court, and I don’t imagine you want to, either. And the first question I always ask my clients is, “What is success to you?” They’ll tell us what success is, and we’ll work back our strategy from there.
AW: That’s such a brilliant question to ask. I hope that the trend is that lawyers ask that as the first question and not the last question. Along the lines of commerciality, tell us why you decided to structure Pallas Partners as an alternative business structure? How does outside ownership help the firm and how does it help clients?
NH: I structured Pallas Partners as an ABS to give us maximum flexibility as we grow. There are several reasons why it’s attractive to me. First, business support or non-lawyers can be partners in an ABS. Non-lawyers play an increasingly important part in the operations of a law firm. To be able to give non-lawyers career development and the route to partnership is really important. Second, it enables me, to the extent I need it, to attract outside investment because there may be times when we are accelerating our growth or there may be times when we want to hedge some of our risk by attracting that investment. Again, by having an ABS structure, we can grant equity to an outside investor. Those are the two business reasons that we looked to structure it that way and to have that ultimate flexibility as we grow as a firm.
AW: It’s an interesting development in the UK. Here in the US, we haven’t moved to that yet, although it’s certainly the direction some states are headed.
Do you see an impact on clients? How do they react to the ABS structure?
NH: They recognize that we are run as a business as well as an excellent law firm, and that’s attractive to them. Clients value the fact that we can be nimble—as they can be nimble in their business activities—in how we’re structured and how we grow. And the combination of those things gives clients real confidence in the firm.
AW: To switch gears to Covid—because you can’t really discuss law firms without talking about before Covid and after Covid—I, for one, think that Covid gave us all an opportunity to rethink the business of law, how law firms run themselves and how we in legal finance run ourselves. What are some lessons you have learned in terms of how Covid has shaped how you formed the firm and how you think about running it?
“[Clients] recognize that we are run as a business as well as an excellent law firm, and that’s attractive to them.”
NH: Covid led us to reassess not just how we practice law but what we expect and want from our lives as well. It was a great pause to have the opportunity to think about what is important. That’s one of the things that drove me to launch Pallas.
Among the things I’ve learned during that time is, one, the importance of in-person collaboration. It was brilliant to go onto Zoom, but there is no substitute for that face time. I appreciate it even more now when I’m in the office with colleagues. The second is the importance of technology. We accelerated a decade at least in technology and development over the course of a couple of months because we had to. The third point is that Covid showed me just how good the English courts are because they moved seamlessly online in contrast to the US courts, which struggled with that transition.
As to how to run a law firm, Covid taught me that you don’t need to have big lavish offices, you don’t need to spend a fortune on the accommodation and you don’t need to have the traditional law firm layout. You can have a much smaller floor plate and you can have points of collaboration, because that’s what people want; and [you can] really look at how you practice law in that respect. Also, [it demonstrated] the fact that people don’t need to be in the office all the time to be working at the very highest level.
AW: At Burford, we have seen increased productivity for some because people don’t have their commutes anymore. While we’re on the same page about the value of being together, it feels like most of the world (and most of the legal industry) won’t go back to five days a week in the office. Do you think there will be permanent changes in the courts? You mentioned how the UK courts were seamless online. Do you think that’s going to continue?
NH: They’re already pulling back from it in England. All appointments and hearings are in person now. But the commercial court is now completely online in terms of documentation. There are no hard copy bundles, which is a really good thing. The place that will be interesting is international arbitration because of the level of travel involved. I wonder whether we’ll be able to flex a little bit more on bigger arbitral hearings, rather than have every aspect in person with lawyers flying everywhere which is bad for the footprint and not always necessary.
AW: I couldn’t agree more. Although there is nothing like questioning a witness in person.
NH: I agree with that. We had an arbitration in lockdown where one of the witnesses (not one of mine, I hasten to add) just sat there very happily with a glass of wine and a cigarette and smoked the entire way through his cross-examination.
AW: You touched on ESG earlier. Pallas Partners has committed to very ambitious targets. Why those targets? Why are they important to you, and how are they, if at all, important to clients?
NH: They’re pledges and they’re goals. Without having a tangible goal, you’re not going to push yourself out of your comfort zone to drive forward. The pledges are in relation to diversity and inclusion, pro bono and volunteering, and the environment. On pro bono the pledge is to dedicate 5% of our resources to pro bono and volunteering.
We think it is important to give back to the community in a way that perhaps has been lost in Big Law over the last decade or so. Certainly as a young lawyer, I spent every Thursday afternoon down at my local court giving free legal advice. That just doesn’t happen anymore. It’s a matter of great importance to give back to society. The environment is very important for the reasons everyone is aware of. And I am a passionate believer in diversity because not only is it morally correct, but diverse teams get much better results.
Clients are increasingly focused on this. They are looking at law firms as suppliers they partner with, and they want to work with diverse teams and firms that have a strong ESG policy. And I hope that we’re going to be leading the way on that.
“I am a passionate believer in diversity because not only is it morally correct, but diverse teams get much better results.”
AW: I couldn’t agree with you more. You are familiar with The Equity Project, which came out of this notion that you do better when you have diverse teams. We were not seeing that in the cases that we were funding, so we launched The Equity Project in 2018. At this point, we’ve now committed roughly $100 million to promote women and racially diverse lawyers.
What I’ve noticed most about it is not just that we’re able to fund more cases, which is terrific, but the conversations that happen at law firms when they talk about The Equity Project are for me as important, if not more so, than funding an individual case. Because I see the shift in conversation from diversity as something that needs a box checked to something that has commercial value to it. It’s of course not only the right thing but it’s also commercially smart.
You’ve set a terrific example for other female litigators and other law firm founders. You’ve gone out in the middle of Covid and created this new kind of law firm. How do you want clients and law firms to promote diversity, equity and inclusion? How do you want to see those changes come about?
NH: To touch on something you just said, they have got to stop just ticking the box. So many law firms approach diversity as something that needs to be done, without a true understanding of its importance or a belief in the power of diversity. It’s understanding all the points we’ve discussed, that it’s not just morally correct but drives better results for clients—that has to be embedded in firms. Things will follow from that. I am thrilled that The Equity Project is triggering those types of conversations because they have to be had or we will not change. Clients need to be smarter and more demanding of us as law firms. It happens with some clients. But clients must hold law firms far more accountable for the diversity of the teams and making sure that they are always diverse. To the extent that their law firms are not doing so, they shouldn’t use that firm.
AW: It fills me with optimism to hear that there is a real change of pace. We both have been working in the legal industry for an awfully long time, and change is awfully slow. I feel a kinship there. You’ve dived in and started your own thing. I started Burford with its founders 13 years ago, and it’s been a joy to build something new and different. What excites you most about this stage in your career?
NH: I’ve been practicing for 25 years now. It’s about being able to create something from scratch, go back to where we started, be the architect of my own firm and challenge the status quo. The worst thing anyone can say to me if I say, “Why are we doing something that way?” is “Because we’ve always done it that way.” Pallas Partners is about looking at things afresh and, at the same time, embedding into the foundation those three pillars: Diversity, pro bono and the environment. When they’re embedded, you can really grow them up and, hopefully, we’ll reach more of our targets as well.
AW: We are talking through video but the energy is palpable, and I’m excited to see where Pallas Partners goes and excited to be part of a conversation about change.
Widely regarded as a legal powerhouse and market leader, Natasha Harrison is the founder and managing partner of Pallas Partners, where she specializes in complex commercial litigation and arbitration disputes for hedge funds, private equity funds, investment banks, corporations and governments. Top ranked by Chambers, among many other accolades she has been named the HERoes Woman Role Model for pioneering gender diversity in the workplace for three years. Prior to founding Pallas Partners, she was the co-managing partner of Boies Schiller Flexner.
Aviva Will is Co-Chief Operating Officer of Burford Capital with overall responsibility for its global marketing, origination and underwriting activities. Top ranked by Chambers, she is responsible for building the teams and investment function that have fueled Burford’s growth. Before joining Burford in 2010, she was a senior litigation manager and Assistant General Counsel at Time Warner Inc., where she managed a portfolio of significant antitrust, intellectual property and complex commercial litigation, and a litigator at Cravath, Swaine & Moore.