Lundgrens' chairman of the board, Vagn Thorup, and new partner in M&A, Peter Bruun Nikolajsen, gives their views on digitalisation and M&A transactions in todays two articles in the Danish newspaper Børsen.
The two articles can be read below.
Article 1, 19th of April
Law firm preparing for digital future
Lundgrens has seen it coming. Digitalisation and intelligent robots may take over a big part of a lawyer’s work in a brave new world.
Denmark’s tenth largest law firm, Lundgrens, is preparing to let robots take over a number of routine tasks.
Initially, digitalisation and robot work will affect M&A deals and the real estate & construction department, both practice areas which are giving very high priority in the firm, explains Lundgrens chairman of the board, Vagn Thorup, who previously worked in IT law and for 35 years served as partner of Kromann Reumert.
Robots in the data room
“We’re very excited about artificial intelligence and the way it can take over a number of a lawyer’s tasks. Due diligence in the M&A process, for example, is a tedious process that can easily be taken over by a robot. It doesn’t get tired at midnight, and there are a number of processes related to real estate that can be digitised,” says Mr. Thorup.
Caption: Lundgrens has a headcount of 122 and expects to generate revenue of DKK 184 million this year.
He is meeting the reporter of the Danish newspaper, Børsen, immediately before going to a conference in Amsterdam where he hopes to meet leading industry players in terms of digitalisation and artificial intelligence.
“Certain software houses specialise in developing programs for the law industry. That’s who I hope to meet in Amsterdam. We’re determined to launch a pilot project at Lundgrens very soon,” he says.
He explains that British law firms are first movers, and some are already employing parallel teams, a human team and a robot to solve similar tasks, but with the team of flesh and blood often falling short of the robot’s solution proposals.
Career highlights – Vagn Thorup
68 years old. Partner and chairman of th board in Lundgrens. In charge of all international relations.
Educational background: Master of Laws, University of Copenhagen. Business courses at Harvard University. Has served on a number of boards for many years and several times rated in the top-five of most influential board chairmen in Denmark.
Chairman of the British Chamber of Commerce in Denmark. Lives in Birkerød, north of Copenhagen.
Considering partnerships
“We haven’t yet begun to cooperate with other law firms on new technology, but we’re considering whether to go alone or team up with others. First of all, we need to get a firm footing. We have the size to do it by ourselves, but we wouldn’t mind taking in like-minded partners. That is a way to eliminate defensive barriers.”
Initially, the main objective for Lundgrens is to eliminate all tedious, repetitive work in the two core areas, but Mr. Thorup is convinced that work involving court cases will follow.
“The question is how all this will end, but there will be a number of ethical issues that will have to be integrated into new industry solutions. I imagine one of them could be a legal council on ethics in line with what they have in the healthcare sector where philosophers and others also have a say.”
Obviously, humans will be coding the robots and they will have to make a number of choices, he explains. How should we react, for example, when we have seen a self-driving Uber car kill a human being? What should be the code of ethics, and how can we integrate the due process of law mindset?
Caption: Vagn Thorup (left), senior partner and chairman of Lundgrens, recently appointed Peter Bruun Nikolajsen, formerly of Delacour, a new partner of the firm and in charge of preparing Lundgrens for a new digital future with specific focus on M&A.
Can robots become judges?
There are also decisions to be made as to when robots are better, more skillful and more just than the judiciary. This is another issue on Mr. Thorup’s mind.
He refers to Israeli-American behavioural psychologist and Nobel prize winner Daniel Kahneman, who in his book “Thinking Fast and Slow” demonstrated a big difference in the severity of judgments depending on whether they were made before or after lunch. After lunch, the cognitive part of the brain can be tired and the reptile brain gains influence. That means punishment becomes more severe.
Robots don’t eat lunch
“The next step is to question whether a judge is in fact better than the robot, which is able to skip lunch. That would mean identical treatment all day long, but where do you draw the line?”
At Lundgrens, they have spent the past couple of months aligning the organisation and the business model to accommodate the coming of new technology and robots in the firm.
“By specialising in selected fields, we’re moving up the value chain. We’re the tenth-largest law firm in Denmark, and while our ambition is not to be among the very largest, we would like to challenge the major players within our two core fields. Also, we do intend to strengthen our position in additional areas.”
Since January, Lundgrens has doubled the number of employees specialising in real estate and construction to almost 30, bringing them in line with the biggest players in the Danish industry, Bech-Bruun and Kromann Reumert. The goal is to participate in more and larger property transactions, but also to grow within lease contract drafting and legal disputes.
Lundgrens is taking the same approach in M&A, a market that according to Mr. Thorup continues to boom.
“The 2018 pipeline is quite big. Despite Trump and all other threats, we see no red flags in the market, so we’ve added a new partner and taken in two new employees.”
At the same time, the firm is sharpening its strategy and taking a more aggressive line. Instead of waiting for the clients to call and ask to have the lawyers tie up the legal ends of an M&A transaction, Lundgrens aims to be part of the process from the start, for example by acting like a dating portal and bringing two parties together.
This strategy proved highly successful late last year when the firm of architects Schmidt Hammer Lassen was successfully sold to a US buyer.
Article 2, 19th of April
New partner brought in to boost M&A business
Thanks to its new aggressive M&A strategy, Lundgrens law firm has managed to attract Peter Bruun Nikolajsen, formerly a successful partner with Delacour, along with one experienced and one junior lawyer to its organisation.
“We’re a small, strong team that will now be integrated into a bigger one, but leaving Delacour was a big decision. I had a good position and served on the board. However, the more I delved into Lundgrens’ approach to M&A, the more tempted I became. This was something I really wanted to be a part of,” explains Mr. Bruun Nikolajsen.
He joined Lundgrens on 15th of March, bringing his 15 years of experience in mid-sized M&A transactions.
New role as a matchmaker
Lundgrens’ strategy is to become a part of M&A transactions at an early stage, helping to match up the right buyers and sellers like an old-fashioned matchmaker.
“This is a strategy that appeals to me, because being close to the client is part of my DNA. Delacour is not a brand that simply drew in cases by its name alone, so I constantly look ahead to the next assignment. That means I’ve been close to my clients. I would rather reach out to them one time too many than one too few,” he says.
M&A is an attractive market with high fees, so it is also very competitive, he explains. That makes it important to be proactive, so you can move up the food chain by being part of making the deals happen.
“On the other hand, we’re not poaching on the investment bankers turf. We don’t charge their fees, because we’re not spreadsheet specialists, nor do we do other parts of their work. But we can do more than just answer the phone when it rings,” he explains.
A lot of contacts in the venture environment
Over the past ten to twelve years, he has also assisted venture funds investing in startups, and that has given him a strong network and many touchpoints to changes of ownership in that market.
“Sometimes, I’m off the case as soon as the contract work is done and the venture fund has made its investment, but often I’m in close contact with the company and end up advising them. Many of them are tech businesses developing software, and that gives me a specific contact to the M&A market, because they are often involved in change of ownership deals,” explains Mr. Bruun Nikolajsen.
Through his knowledge of and contacts in the venture capital market he hopes to contribute to growth at Lundgrens.
He is looking forward to working on a larger team with a firm that has been working to establish an international profile in the recent years by cooperating with law firms outside Denmark, acknowledging the fact that more and more M&A transactions are cross-border deals.
