Clients Need Legal Services But Not Necessarily Lawyers (Part 3 of 4)

OK.

Review of Part 1 and Part 2 of this four-part post:

1. In your company, many “legal” problems are more accurately viewed as business challenges that raise legal issues (as Mark Cohen put it).

2. Delivery of many of the legal services that respond to such business-challenges-that-raise-legal-issues now requires process management and technology skills that attorneys mostly lack (again, Mark Cohen).

3. “Legal services & providers of those [legal] services are ever more important — lawyers, however, are not.” (Jeffrey Carr’s tweet last Monday)

For most of the past four or five decades, the phrase “legal services & providers” has meant one of two things:

1. Law firms, and

2. In-house counsel employed by companies as full-time employees.

Until — that is — a few years ago: With the advent of “alternative legal service providers” — or “ALSPs”.

“Alternative” to what? Alternative to law firms and in-house counsel.

Beyond that, the definition is pretty wide-ranging — except that all ALSPs embody the aphorism set forth in this post’s title: “Clients Need Legal Services But Not Necessarily Lawyers”.

As Georgetown Law Center’s* “Alternative Legal Service Providers 2019” put it:

“Two years ago, the alternative legal service provider (ALSP) sector was still nascent and poorly defined.

“Today, as corporations and law firms increasingly engage ALSPs, the modern legal industry recognizes this market as better defined, quickly growing, and broadly adopted.

“ALSPs perform many of the tasks traditionally done by law firms, with the top five tasks identified in our survey as:

• Litigation and Investigation Support;

• Legal Research;

• Document Review;

• eDiscovery; and

• Regulatory Risk and Compliance …

“… ALSPs … are leveraging different business models, and they come in different shapes and sizes. They range† from small startups to massive disrupters, such as the Big Four accounting firms.

“Where law firms lead with specialized expertise and highly trained legal judgment, ALSPs may employ contract lawyers for specific time-bound needs, implement rigorous process and project management across massive volumes of work, or deeply integrate technology to gain efficiency.

“While many ALSPs are not law firms, some law firms recognize the potential of new business models to transform the industry and have established their own in-house ALSPs. Technology adoption marks another important attribute of ALSPs, and it is often emphasized more strongly in ALSPs than at traditional law firms.

“Technology-enabled services allow ALSPs to provide higher value and take on different and more complex tasks. Some ALSPs may rely on third-party technology, but others are developing proprietary systems in search of sustainable competitive advantage.

“Further, the technology being adopted is often state-of-the-art; about a quarter of ALSPs interviewed say their systems use artificial intelligence ….”

Part 4 of this four-part post will describe highlights of the Georgetown Law Center’s “Alternative Legal Service Providers 2019” findings relating to ALSPs.

Data about their growth in the last several years.

And unknowns about what that data might mean for the legal services alternatives to law firms and in-house counsel in the future.

 

* Along with Oxford University’s Saïd School of Business, Legal Executive Institute, Acritas, and Thomson Reuters®.

† According to the Georgetown Law Center’s “Alternative Legal Service Providers 2019“, ALSPs comprise a $10.7 billion industry, which, “can be roughly divided into five segments:

“Big Four [Deloitte, EY, KPMG, PwC];

“Captive LPOs — law firms’ wholly-owned captive legal services units, often located in lower-cost regions [legal process outsourcers, including UK-headquartered law firms Allen & Overy, Clifford Chance, Eversheds, and U.S.-headquartered law firms Orrick, Reed Smith, and WilmerHale];

“Independent LPOs — perform legal work on behalf of corporate legal departments and law firms, often via matter- or project-based engagements [legal process outsources not captive within any law firm, including Consilio, Epiq, Integreon, KLDiscovery, Mindcrest, and Quislex];

“Managed Services — contract for all or part of the function of an in-house legal team, typically ongoing work [Elevate, Thomson Reuters Legal Managed Services, and UnitedLex]; and

“Contract and Staffing Services — provide lawyers on a temporary basis to companies and law firms, ranging from entry-level document review to highly skilled specialists [Axiom, Halebury — recently acquired by managed services provider Elevate, LOD (formerly “Lawyers on Demand”), Special Counsel, and Update Legal).”

 

Part 1

Part 2

Part 4