Page 170 - 2019 - Leaders in Legal Business (n)
P. 170
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
whole is greater than the sum of the parts. Contrary to early concerns that ALSPs would compete
directly with law firms, it has become abundantly clear to those firms embracing strategic
collaboration that the most effective legal services delivery model is a symbiotic one in which law
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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
whole is greater than the sum of the parts. Contrary to early concerns that ALSPs would compete
directly with law firms, it has become abundantly clear to those firms embracing strategic
collaboration that the most effective legal services delivery model is a symbiotic one in which law
155
