Legal Geek’s Uncertain Decade: Can ALSPs provide what clients need?

Topics: Alternative Legal Service Providers, Business Development & Marketing Blog Posts, Client Relations, Data Analytics, Efficiency, Law Firm Profitability, Law Firms, Leadership, Legal Geek, Legal Innovation, Midsize Law Firms Blog Posts, Practice Engineering, Process Management, Small Law Firms, Thomson Reuters

ALSP

General counsel (GCs) across the United States and the United Kingdom have varied approaches to the current market conditions, according to recent surveys. Interestingly, at the center of the debate is how alternative legal service providers (ALSPs) are utilized and perceived compared to traditional law firms.

Not surprisingly, many GCs felt that individual client needs ultimately superseded the ALSP v. law firm rift when looking at the legal landscape beyond the Covid-19 pandemic.

In the second of a four-part global webinar series, The Uncertain Decade, Legal Geek again brought Mark Cohen, CEO of Legal Mosaic, and Prof. Richard Susskind to dissect what clients want and need now and breakdown the hope and hype of ALSPs. (You can read about the first webinar here.)

The survey responses from GCs about how they’re managing their own in-house legal teams caused some eyebrow rising. While the “worry of people, cashflow, and uncertainty persist; the newness of remotely running the team, advising the business, and getting law firms responses, have been quite successful,” said Susskind.


See the new infographic for the Legal Geek “Uncertain Decade” series


In another revelation from the survey, UK GCs noted that ALSPs fell short of expectations during the crisis, which contrasted Cohen’s findings of GCs in the United States where law firms fared poorly and ALSPs flourished. The two panelist grappled to find just rationale for the variance, eventually settling on possible cultural differences. “Maybe the US is more pragmatical about the relationships,” Cohen suggested, adding that ALSPs in the UK can be subcontractors of law firms where in the US they are often more organic, outside of the Big Four.

Finally, the survey results left the GCs on both continents in ominous accord — a majority on both sides of the Atlantic described the level of change from this current crisis as “significant or massive.”

More for less

The idea of getting more quality legal service for less spend is a central theme repeated by Susskind and Cohen, underscoring their overarching thesis for the webinar: Legal operations are paramount. Cost cutting has become table stakes; and now it falls upon the chief operating officers (COOs), to devise new business models, direct and enable innovation, and reluctantly, ruminate about the next calamity. “Legal expertise used to be the primary focus,” Cohen explained. “Now business acumen and technological tools used by operations can help clients.”

Indeed, legal organizations have to reimagine the art of the possible and transform, he added. While the end goal is an elated client, there are far more fluid paths combining “less expensive people using better technology” to achieve that, said Cohen.

A polling of webinar attendees on desired topics of discussion, pivoted Susskind to deliberate on the impact of start-ups on the legal landscape. A few years ago, a few hundred emerged, now there are a few thousand legal technology businesses. Bluntly, he stated that most of these companies will not last as each try to be the next Amazon.

What did surprise him, was the primary focus for these embryonic upstarts, as the majority of these companies endeavor to solve law firm back office functions, Susskind said, adding that the amount of effort focused on helping the client is actually pretty low.

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Cohen agreed, saying much can be done in this space to focus on helping those in need of legal services. “There is far too much law for those who can afford it, and far too little for those who can’t.”

Both panelists spent a significant amount of time on the question of whether most ALSPs were more hype or hope. For example, Cohen sees the outgrowth of ALSPs as a byproduct of unmet market need. Since the 2008 crisis, ALSPs have led with a different DNA. More business than law firm, they breathe process design, project management, and technology to help their clients. This corporate model, which has “come of age” in the last few years, is providing legal services which are better, faster, cheaper, and more customer-centric, explained Cohen.

Project managers utilize data-centric analysis, to oversee risk management; and what was once thought of as a junior varsity, ALSPs should no longer be seen this way. In fact, based on Net Promoter Scores, these organizations can often prove their value empirically in serving their customer. UnitedLex and Axiom, for example, are poster children for this data-centric service model. Highly competitive, Axiom only engages with one out of every 20 lawyer applicants it receives, and practices law in more than 90 countries, though not in the US. Both companies leverage their corporate structures, allowing flexibility and reinvestment while dismissing the partnership model of law firms, said Susskind.

As they concluded their discussions, both Cohen and Susskind surmised that the focus will always be on the client of course, but how those clients are serviced has changed. Cohen reminisced that once “lawyers had to practice or leave,” but now they need to meld many different components together, such as technology, operations, and analytics.

Susskind ended with his impassioned beliefs on mindset shifts, suggesting that lawyers have to be open to new things, be entrepreneurs, musicians, and artisans. They should not assume that everything will look like it looks today.

Tomorrow’s lawyers must try to avoid their traditional mindset trap — that “the best is the enemy of the good,” said Susskind, adding that perfection at the cost of agility and creativity is no longer sustainable.