Recently, there has been a sea change in how law firms and in-house legal departments work with alternative legal service providers. Gone are the days when ALSPs were only seen as resources for contract help when high-volume, lower-profile work needed to be done quickly and cheaply, or in a pinch when a lawyer was on medical leave. In 2019, evolving expectations of law firms and in-house legal departments are driving the desire to partner with ALSPs for a wider range of staffing needs—from helping with highly specialized projects to senior level staff augmentation and overflow work—and business solutions.
Here’s a quick look into the current trends that are changing the way the legal industry thinks about staffing in 2019:
Law firms and in-house legal departments are more focused on the bottom line than ever before. After the recession of the late 2000s, shareholders wanted to see more value, causing corporations and law firms to focus intently on their bottom lines and seek more efficient ways of doing business. This new emphasis sparked a growing interest in the capabilities and cost advantages of contract lawyers, whose roles had often been limited to litigation discovery and document review.
A decade later, ALSPs have become integral to the legal landscape, supporting law firms and legal departments in varied capacities. In addition to standard discovery and document review, experienced contract attorneys are being tapped to assist with licensing agreements, pre- and post-deal due diligence and integration, data protection and cybersecurity, regulatory compliance, lease review, ISDA agreements, employment matters, reorganization, etc. The key is finding an ALSP who can align the right skill set with the task and culture at hand in addition to providing these services at reasonable cost.
Clients are pushing law firms into price wars with their peers. In Q1 we have also seen our law firm clients under increasing pressure to contain costs as they bid against their peers to win business. Many have found they can save thousands—even hundreds of thousands—of dollars by partnering with an ALSP to temporarily bring on staff with a broad range of skill sets.
These arrangements can fulfill a variety of needs: staffing up when the existing team doesn’t have the capacity to handle the work, taking on necessary tasks that the client doesn’t want to pay for, providing expertise in practice areas not covered by existing staff, etc. For example, in Q4 2018, right before the Thanksgiving holiday, one of our clients asked us to staff 120 attorneys to complete an urgent document review by the end of the weekend. Because we can draw from such a deep candidate pool in multiple offices, we were able have 20 attorneys at the client’s offices by morning, and another 100 working in our state-of-the-art review facilities later that day. Our quick response enabled our client to make their production deadline and, ultimately, impress their client.
Simply put, the agility ALSPs bring to the equation can help law firms not only win clients but retain them in today’s increasingly competitive marketplace.
In-house legal departments are seeking efficiency, control and transparency. Over the past five years, a change has taken place in the way many in-house legal departments operate. Increased workloads, and cost sensitivities have caused corporations to find better ways to manage expenses and create greater efficiencies. As a result, they have formed legal operations teams to look closely at how they work internally, as well as, with outside counsel. Now, legal operations directors, managers and associates are tasked with driving progress on increased productivity and effectiveness and calling into question not only inefficiencies but also the level of control they have over legal activities and the related transparency.
In many cases, this is causing friction. Law firms are negotiating rates that make it hard to be profitable, particularly on lower-level work, and legal department administrators aren’t getting the level of transparency and control they desire. Where’s the relief? Often it can be found in ALSP partnerships, as law firms can continue doing the high-profit work while contractors fall under the direction of the administrator, who assumes control and pays a lower price.
Big Law attorneys are going the contract route. Going back a couple of decades, a stigma surrounded contract lawyers: People assumed they were the lawyers who couldn’t cut it in private practice. In 2019, highly talented, top tier lawyers are choosing to work as contract lawyers because they want better work-life balance. Millennial lawyers in particular are choosing to share their distinguished education and Big Law experience with ALSPs, where they can practice law on a more manageable schedule (70-hour workweeks aren’t for everyone).
These lawyers bring great diversity of talent to the table, with capabilities to take on even the most complex projects. They are on top of the issues arising from emerging technologies and the dynamic regulatory environment, and often versed in tightly niched practice areas that not every law firm or in-house counsel can oversee.
For example, we were recently approached by the general counsel of a large entertainment company that didn’t have lawyers on staff with the required background to review some important licensing agreements. We placed a lawyer who had seven years of experience with a top-tier law firm. Not only was she able to complete the licensing review in the allotted month, but we were able to arrange a fee that was one-fourth of what it would have been had the company hired her directly from the law firm.
In 2019, law firms and in-house legal departments are approaching their staffing models more creatively than ever before. As they continue to strive toward working smarter—improving efficiencies and reducing costs while maintaining the highest standards—ALSPs and the talent they provide are proving to be welcome partners.
Leslie A. Firtell is an attorney and CEO of Tower Legal Solutions, which she founded in 2007. Tower Legal Solutions is a WBENC-certified woman-owned company, providing services in legal staffing, managed review, consulting, attorney engagements, contract management and compliance.