Page 153 - Leaders in Legal Business - PDF - Final 2018
P. 153
water any longer: the zero-sum game (the more the client loses, the more the law firm wins) and
that every penny of revenue generated by an ALSP is a penny of revenue lost by the law firm.
In any event, these first couple of years can be characterized, perhaps somewhat harshly,
as the phase where law firms were dragged “kicking and screaming” into the arms of ALSPs.
On a case-by-case basis, in-house counsel started to advise their outside counsel that in order to
retain their business, the firms must begin to use ALSPs. In fairness to BigLaw, this phase has
largely passed and did so fairly quickly. Whether the Great Recession forced them to adapt
quickly or merely coincided with a change in attitude is a debate for another day.
Checking the Box
Law firms have many constituencies, but their clients always come first. Large firm
clients are, by and large, cost-sensitive in-house counsel. Firms can gain both a perception and
actual advantage with clients by making clear they understand and are responding to the cost
pressures facing their clients.
In-house counsel muscle-flexing manifested itself not only in ad hoc requests that their
outside counsel use an ALSP, but also in the increasing prevalence of requests for proposals
(RFPs) asking outside counsel whether they had relationships in place with ALSPs.
Law firms responded in turn by undertaking selection processes of their own to choose
one or more preferred ALSPs. The end result was that when asked the question in an RFP, law
firms could respond in the affirmative. This is the “checking the box” phase. Many of the firms
during this phase were simply looking to place a check in the box, and once a master services
agreement was put in place between the firm and the ALSP, it was considered a job well done
with no further action required. Many firms today are struggling with how to navigate the
transition from the “checking the box” phase into the phase that follows: “strategic
collaboration.”
Strategic Collaboration
In 2011, our employer Integreon commissioned research tracking the adoption of ALSPs
among law firms and in-house counsel. While a minority of firms seemed to worry that using an
ALSP might send clients the wrong signal, the results of the research showed such fear to be
unfounded. A significant majority, about 75 percent, of both in-house and law firm lawyers
believed using an ALSP did not “diminish the brand.” Rather, those that embraced ALSPs were
perceived as cognizant of the cost, efficiency, and quality demands of their clients, and
consequently appeared to gain a competitive advantage. Today, a significant number of
innovative law firms now publicly acknowledge their relationships with ALSPs. These firms are
at various stages of the journey that can be termed as “strategic collaboration.”
The end of this journey, one that arguably no firm has yet reached, is when ALSP
solutions are so closely integrated into the firm’s overall value proposition that they are simply
viewed as part of a suite of solutions that the firm provides to its clients across all of its practice
groups. This requires firms to embrace ALSPs at a strategic level, welcoming them into the firm,
lifting open the hood, and working with the provider, as Professor Richard Susskind would say,
to “decompose” legal functions, map out “as is” workflows, and then reengineer the processes to
incorporate ALSP best practices, lower-cost labor, and technology.
The theory behind strategic collaboration is not rocket science. The premise is that the
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that every penny of revenue generated by an ALSP is a penny of revenue lost by the law firm.
In any event, these first couple of years can be characterized, perhaps somewhat harshly,
as the phase where law firms were dragged “kicking and screaming” into the arms of ALSPs.
On a case-by-case basis, in-house counsel started to advise their outside counsel that in order to
retain their business, the firms must begin to use ALSPs. In fairness to BigLaw, this phase has
largely passed and did so fairly quickly. Whether the Great Recession forced them to adapt
quickly or merely coincided with a change in attitude is a debate for another day.
Checking the Box
Law firms have many constituencies, but their clients always come first. Large firm
clients are, by and large, cost-sensitive in-house counsel. Firms can gain both a perception and
actual advantage with clients by making clear they understand and are responding to the cost
pressures facing their clients.
In-house counsel muscle-flexing manifested itself not only in ad hoc requests that their
outside counsel use an ALSP, but also in the increasing prevalence of requests for proposals
(RFPs) asking outside counsel whether they had relationships in place with ALSPs.
Law firms responded in turn by undertaking selection processes of their own to choose
one or more preferred ALSPs. The end result was that when asked the question in an RFP, law
firms could respond in the affirmative. This is the “checking the box” phase. Many of the firms
during this phase were simply looking to place a check in the box, and once a master services
agreement was put in place between the firm and the ALSP, it was considered a job well done
with no further action required. Many firms today are struggling with how to navigate the
transition from the “checking the box” phase into the phase that follows: “strategic
collaboration.”
Strategic Collaboration
In 2011, our employer Integreon commissioned research tracking the adoption of ALSPs
among law firms and in-house counsel. While a minority of firms seemed to worry that using an
ALSP might send clients the wrong signal, the results of the research showed such fear to be
unfounded. A significant majority, about 75 percent, of both in-house and law firm lawyers
believed using an ALSP did not “diminish the brand.” Rather, those that embraced ALSPs were
perceived as cognizant of the cost, efficiency, and quality demands of their clients, and
consequently appeared to gain a competitive advantage. Today, a significant number of
innovative law firms now publicly acknowledge their relationships with ALSPs. These firms are
at various stages of the journey that can be termed as “strategic collaboration.”
The end of this journey, one that arguably no firm has yet reached, is when ALSP
solutions are so closely integrated into the firm’s overall value proposition that they are simply
viewed as part of a suite of solutions that the firm provides to its clients across all of its practice
groups. This requires firms to embrace ALSPs at a strategic level, welcoming them into the firm,
lifting open the hood, and working with the provider, as Professor Richard Susskind would say,
to “decompose” legal functions, map out “as is” workflows, and then reengineer the processes to
incorporate ALSP best practices, lower-cost labor, and technology.
The theory behind strategic collaboration is not rocket science. The premise is that the
139
