Page 177 - 2019 - Leaders in Legal Business (n)
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response to this clear demand, for a type of lawyer and service not previously easily available and
to allow the internal teams to manage head count costs at the same time.
Curbing the frustration:
As the table above shows, in-house legal teams are still frustrated by the lack of cost
transparency and overall costs, as well as the billable hour system. By effectively managing their
own resourcing, traditional law firms have the ability to manage the costs they transfer onto in-
house legal teams. Using ALSPs as well as Legal Process Outsourcing (LPO) models has been
invaluable for a number of law firms, as ALSPs and LPOs have the ability to offer alternative fee
arrangements (AFAs). This enables traditional law firms to scale up and down and manage their
bills to in-house legal teams.
Are AFAs possible?
In that same Thompson Reuters study, 2018 State of Corporate Law Departments, it states
that 76 percent of their customers state that controlling outside counsel costs are at the top of their
priorities. It also states that implementing alternative fee arrangements are considered most
effective to control external counsel costs.
In-house legal teams have taken charge of this concern. A number of in-house legal teams
have a program of legal invoice review to ensure that not only are invoices submitted by law firms
in scope and budget, but also to provide visibility on spend. Many in-house legal teams have also
implemented e-billing systems to help with spend management. Despite the cottage industry that
has developed because of the complexities of billing, the hourly rate remains the predominant way
of charging in the legal services industry.
Providing cost transparency and certainty is core to many ALSPs’ operation model, and
for most work is undertaken on fixed fees or day rates to ensure customers have control and
transparency over budget.
Although new ways of pricing legal services are important, better integration and
collaboration between traditional law firms, ALSPs, and in-house legal teams in general is
essential to provide better customer solutions. Increasing collaboration throughout the external
legal supply chain is fundamental to providing customers with efficiencies in how they buy their
legal services. So how do we all play nicely together?
ALSPs and Traditional Law Firms
Flexible legal resourcing has provided a solution to a gap in the market, and traditional
firms are creating their own bespoke versions whilst others are partnering with ALSPs to offer this
service to clients. In addition, the ability to offer alumni an alternative pathway to working with
the traditional firm has arisen. It is becoming increasingly common for ALSPs to work with
traditional law firms’ own alumni to manage the firms’ resourcing challenges and assist in
managing costs and profitability.
162
to allow the internal teams to manage head count costs at the same time.
Curbing the frustration:
As the table above shows, in-house legal teams are still frustrated by the lack of cost
transparency and overall costs, as well as the billable hour system. By effectively managing their
own resourcing, traditional law firms have the ability to manage the costs they transfer onto in-
house legal teams. Using ALSPs as well as Legal Process Outsourcing (LPO) models has been
invaluable for a number of law firms, as ALSPs and LPOs have the ability to offer alternative fee
arrangements (AFAs). This enables traditional law firms to scale up and down and manage their
bills to in-house legal teams.
Are AFAs possible?
In that same Thompson Reuters study, 2018 State of Corporate Law Departments, it states
that 76 percent of their customers state that controlling outside counsel costs are at the top of their
priorities. It also states that implementing alternative fee arrangements are considered most
effective to control external counsel costs.
In-house legal teams have taken charge of this concern. A number of in-house legal teams
have a program of legal invoice review to ensure that not only are invoices submitted by law firms
in scope and budget, but also to provide visibility on spend. Many in-house legal teams have also
implemented e-billing systems to help with spend management. Despite the cottage industry that
has developed because of the complexities of billing, the hourly rate remains the predominant way
of charging in the legal services industry.
Providing cost transparency and certainty is core to many ALSPs’ operation model, and
for most work is undertaken on fixed fees or day rates to ensure customers have control and
transparency over budget.
Although new ways of pricing legal services are important, better integration and
collaboration between traditional law firms, ALSPs, and in-house legal teams in general is
essential to provide better customer solutions. Increasing collaboration throughout the external
legal supply chain is fundamental to providing customers with efficiencies in how they buy their
legal services. So how do we all play nicely together?
ALSPs and Traditional Law Firms
Flexible legal resourcing has provided a solution to a gap in the market, and traditional
firms are creating their own bespoke versions whilst others are partnering with ALSPs to offer this
service to clients. In addition, the ability to offer alumni an alternative pathway to working with
the traditional firm has arisen. It is becoming increasingly common for ALSPs to work with
traditional law firms’ own alumni to manage the firms’ resourcing challenges and assist in
managing costs and profitability.
162
