Former ASIC lawyer Joanne Rees has set up a new legal advisory firm to assist companies and government agencies make their law firms more accountable.
The company, Sydney-based Ally Group, was established recently to help reduce legal expenditure on litigation and commercial disputes.
Rees, CEO of Ally Group, said managing the One Tel litigation at ASIC prompted her to consider the way large civil cases were run and how costs could be kept down.
She believes some businesses don't know how to get maximum value from their law firms.
When a firm is briefed for large litigation "it is almost like giving them a blank cheque", she said, and part of the problem lies with law firms reacting to internal budget pressures and racking up unnecessary costs instead of asking the clients what they want.
Rees said she positions herself as an "independent broker" who has no vested interest in any matter growing or taking too long to be completed.
Part of the service offered involves seeking advice from senior counsel to see how a problem might be resolved, or if this is not possible, approaching several law firms to provide a quote on how much the matter would cost to run.
While law firms may not like having someone watching over their shoulder, Rees said the response so far has been positive.
"Firms realise something has to change - litigation can't go on where legal matters cost millions and millions of dollars to run. People are going to look to different solutions," she says.
She has also been working with small-to-medium enterprises that may have their own general counsel but find themselves involved in complex litigation.
"[SMEs often] don't really know what the outcome is that they are seeking. If they launch into some sort of action they can end up spending a fortune and be stuck in a court process, which isn't what they need," she said.
In her role at ASIC, she was also aware of the effect a regulator's inquiries could have, but said that an unco-operative and "gung-ho" approach wasn't necessarily best for the client.
"I am not saying you always have to lie down when a regulator starts questioning activities," she said.
"But ... I get really concerned that people might go to a firm who will advise that there are all sorts of legal actions available that they can pursue through the courts but not say 'This is the impact it's going to have on your life over the next five years. Is that what you really want?'"
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