Page 85 - Leaders in Legal Business and The 1000 Leaders and Influencers - Draft 1
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4. ABS — Alternative business structures — MDPs are coming!
As of this writing, a few jurisdictions have authorized the creation of ABS (alternative
business structure) firms that allow lawyers and other kinds of experts (whether via financing or
via the creation of a multidisciplinary practice, or MDP) to co-own/share profits in the same
firm. This means that clients may now consider hiring such firms for regularly repeating work or
to do work out of the country if the ABS firm doesn’t operate in the client’s home jurisdiction.
The entrants in this market — unlike some of their vendor counterparts that start small and have
to grow the hard way — are often large and well financed. This draws participation from the
likes of the traditional accounting firms/consulting practices (such as PricewaterhouseCoopers,
KPMG, Deloitte, etc.) and newly-structured law firms with outside investors (such as Riverview
Law) and more, to do their work. How these firms will fit into clients’ portfolios and the larger
legal landscape (whether their entry will change everything or very little) remains to be seen, but
clearly they will create greater competition via more definite and clearly articulated pricing and
service strategies; a re-shifting of top talent as new practices open and steal top-name experts and
practice groups; and probably some firm merger mania, all of which will inevitably affect
clients’ decisions about which firms to hire with the correct value proposition for their work…
5. Outsourcing to vendors:
Clients are being offered an ever-increasing number of options beyond sending work they
can’t staff internally to lawyers in firms or some other structure that contracts lawyers to staff
client matters. They’re making more and more use of them each year, sometimes exponentially
growing the percentage of work they’re sending on an annual basis as they get more comfortable
with the concepts. LPOs (on-shore and off-shore legal process outsourcers), e-discovery vendors,
litigation support companies, firm service centers, and more are creating predictably priced
service options for clients who wish to buy a particular “product” or a talented and highly trained
team to deliver a pre-defined set of results at a fixed cost (as opposed to undefined work often
thrown over the wall to a law firm that was told to get going on it, figure it out, and then
anticipate that the client would argue with the firms over the invoice later). These kinds of
companies first showed up in India, Singapore, and other cheaper-workforce/highly-educated
labor markets, but now are just as likely to be found in West Virginia, Northern Ireland, or even
in a big law firms’ back office operations somewhere in the hinterlands, away from the high-
price real estate and labor market where the big firm opens its offices.
6. Hot technologies in law departments:
There’s a lot of attention (even if relatively little actual action) on knowledge-based
systems that allow the department to automate or process-manage routine functions. These are
extremely popular, even if only fully implemented in relatively few departments in a
sophisticated fashion (something beyond a Word or Excel spreadsheet, for instance). These
include contract management systems that allow departments to encourage business managers to
self-serve their own negotiation and contracting processes, as well as work platforms that drive
the increased use of template work processes or decision-trees for commonly repeating matters.
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As of this writing, a few jurisdictions have authorized the creation of ABS (alternative
business structure) firms that allow lawyers and other kinds of experts (whether via financing or
via the creation of a multidisciplinary practice, or MDP) to co-own/share profits in the same
firm. This means that clients may now consider hiring such firms for regularly repeating work or
to do work out of the country if the ABS firm doesn’t operate in the client’s home jurisdiction.
The entrants in this market — unlike some of their vendor counterparts that start small and have
to grow the hard way — are often large and well financed. This draws participation from the
likes of the traditional accounting firms/consulting practices (such as PricewaterhouseCoopers,
KPMG, Deloitte, etc.) and newly-structured law firms with outside investors (such as Riverview
Law) and more, to do their work. How these firms will fit into clients’ portfolios and the larger
legal landscape (whether their entry will change everything or very little) remains to be seen, but
clearly they will create greater competition via more definite and clearly articulated pricing and
service strategies; a re-shifting of top talent as new practices open and steal top-name experts and
practice groups; and probably some firm merger mania, all of which will inevitably affect
clients’ decisions about which firms to hire with the correct value proposition for their work…
5. Outsourcing to vendors:
Clients are being offered an ever-increasing number of options beyond sending work they
can’t staff internally to lawyers in firms or some other structure that contracts lawyers to staff
client matters. They’re making more and more use of them each year, sometimes exponentially
growing the percentage of work they’re sending on an annual basis as they get more comfortable
with the concepts. LPOs (on-shore and off-shore legal process outsourcers), e-discovery vendors,
litigation support companies, firm service centers, and more are creating predictably priced
service options for clients who wish to buy a particular “product” or a talented and highly trained
team to deliver a pre-defined set of results at a fixed cost (as opposed to undefined work often
thrown over the wall to a law firm that was told to get going on it, figure it out, and then
anticipate that the client would argue with the firms over the invoice later). These kinds of
companies first showed up in India, Singapore, and other cheaper-workforce/highly-educated
labor markets, but now are just as likely to be found in West Virginia, Northern Ireland, or even
in a big law firms’ back office operations somewhere in the hinterlands, away from the high-
price real estate and labor market where the big firm opens its offices.
6. Hot technologies in law departments:
There’s a lot of attention (even if relatively little actual action) on knowledge-based
systems that allow the department to automate or process-manage routine functions. These are
extremely popular, even if only fully implemented in relatively few departments in a
sophisticated fashion (something beyond a Word or Excel spreadsheet, for instance). These
include contract management systems that allow departments to encourage business managers to
self-serve their own negotiation and contracting processes, as well as work platforms that drive
the increased use of template work processes or decision-trees for commonly repeating matters.
71
