CC Absorbs Loss-Making Applied Solutions’ Product Development

Global law firm Clifford Chance (CC) has launched a new Research & Development (R&D) Hub and absorbed the product making aspects of the firm’s loss-making tech subsidiary, Clifford Chance Applied Solutions (CCAS). From 2018 to 2020 the group lost £2.4m, (see more below).

The move follows the recent departure of Jeroen Plink, the CEO of the subsidiary, which had built a range of tech products, including several expert systems, designed to be sold to the wider legal market.

A spokesperson for CC told Artificial Lawyer: ‘The new R&D Hub will work closely with our Best Delivery, Knowledge, Experience and Thought Leadership (KETL), legal technology and Client and Market Development Teams. These are all already key stakeholders in our product lifecycle and we will be harnessing those relationships to take our development to the next level.

‘[Also] the product-making aspect of Clifford Chance Applied Solutions has moved into the LLP (i.e. the main firm).’ However, what is left of CCAS will keep going as a subsidiary, the firm added, which appears to include some form of software sales function.

Clifford Chance Applied Solutions is a UK limited company registered in England and Wales and is still operating. Plink is listed as previously a director of the company, who resigned in February this year. Bas Boris Visser, Global Head of Innovation and Business Change at CC, is listed as a director of the company.

Joanne Anderson, the Chief Product Officer of Clifford Chance Applied Solutions, also remains currently listed as a director of the company. Managing Partner of CC, Matthew Layton, is also listed as a director.

Data from the UK’s Companies House, shows that from ‘1 Nov 2018 to 30 April 2020’ CCAS made a £2.39m ($3.37m) loss, (see table below).

Tech companies tend to burn through a lot of money as they develop software, so this loss should be seen in that context. But, no doubt, having a loss-making subsidiary, especially during the pandemic, has presumably been a tricky situation for CC.

Data: Companies House

Data also shows that the company did however make revenue from software sales as well: £610,934 for the same specific period. Sales figures for post-April 2020 are not available, and may have been greater. We will have to wait until CCAS publishes its next accounts.

Data: Companies House.

Having a separate entity for tech development and software sales is not that unusual in the legal sector. For example, Kennedys has its Kennedys IQ subsidiary also, which builds software solutions for the insurance market.

One theory behind doing this, aside from some risk aspects, is that software development works better outside of the strictures of a traditional law firm culture. Although, in CC’s case they are now moving CCAS’s product development back inside the firm.

Leading the new hub will be April Brousseau, who previously was at Simmons & Simmons until Spring last year and had the title of ‘Global Lead – Clifford Chance Create and Innovation’ when she joined.

She will now be ‘Director of Research & Development’, and have responsibility for the ‘selection, design and development of all new digital products through the Hub’, as well as for the sales of all client solutions ‘via the dedicated sales team in Clifford Chance Applied Solutions‘.

Boris Visser, commented via a statement: ‘The business of law is changing faster than ever, and pandemic disruption in the wider business world has set the stage for accelerating demand for digital legal products. By bringing together the research and development capabilities that we have developed both within the firm and in our successful subsidiary Clifford Chance Applied Solutions, we can boost the speed and scale to our digital product capabilities.

‘Together they are greater than the sum of their parts, and I am excited to work with April and the whole team to build the digital legal products of tomorrow.”

Brousseau concluded, also via a statement: ‘It’s an exciting time to be working in legal technology and innovation, and I can’t wait to start collaborating within our new R&D Hub, across our firm, and with clients to invent the legal products and services of the future.

‘We have learned a lot from the start-up culture of Clifford Chance Applied Solutions in recent years, and it is great to be able to bring the exceptional product development expertise we have established there right into the heart of the business. We believe we can do more by doing it together in one, single, collaborative team.’