What are law firm subsidiaries?

Bryon Bratcher
Managing Director
San Francisco
Jun 1 • 2 min read

Law firm subsidiaries are companies owned by a traditional law firm that provide complementary services adjacent to the law firm. For example, our company Gravity Stack is a wholly owned subsidiary of global law firm Reed Smith LLP. Gravity Stack is not alone — several other law firms in the Amlaw 100 have launched subsidiaries, some of which are wholly owned and some of which have been completely spun out for the purposes of taking on external funding. According to a recent study by Baretz & Brunelle, 35% of the AmLaw 100 firms have captive ALSPs (alternative legal service providers), although not all are wholly owned subsidiaries.

What kind of services do law firm subsidiaries provide?

Every law firm sub is a little different — some are pure software companies others provide flexible staffing. At Gravity Stack, we take a technology first approach to solving problems, especially around huge volumes of data, but we still recognize that tech alone does not solve problems, teams of diverse experts do. Our team is made up of engineers, business advisors, legal project managers and data scientists, not to mention our direct access to the team of lawyers at our parent company Reed Smith.

We customize existing technology, partner with cutting edge startups and build original solutions to tackle sophisticated pain points that we see over and over again in conversations with our clients. Our team was forged on the front lines of eDiscovery and internal investigations, but these days more and more of our clients engage us for our contract management and insights solutions or for technology consulting.

What kind of companies engage with law firm subsidiaries?

Again, not every law firm sub is the same — some cater to law firms, some cater to big corporations, others even sell downstream to the consumer. At Gravity Stack, corporate legal departments form our core client base, but we also count other global law firms, midsize law firms and service providers as customers and partners. As an example, corporations approach us directly for our contract management solution, while a law firm might license our proprietary software to review contracts for their client.

Why do law firms form subsidiaries in the first place?

Some law firms form subs because they want to take on external funding while others do it for marketing purposes. Our philosophy is that law firms get stronger when they dedicate, not just a practice group, but an entire business unit for the sole purpose of staying ahead of the curve on technology.

On the other hand, having access to first class attorneys who can help us source client pain points and act as trusted advisors allows us to provide a truly integrated service. Many Fortune 500 companies, many of whom are our clients, have dedicated entities to harness innovation, we think that great law firms should do the same.

Want to become better informed on law firm subsidiaries and the services we provide?

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