Ringing the changes in corporate legal services
The rise of the alternative providers
To paraphrase numerous people – if organizations are to transform results, they must first change the way they do things. As Graham Richardson, Partner at Eversheds Sutherland and Head of Konexo, sees it, a shake-up of corporate legal services provision paves the way for exactly that.
The legal market may be slower to change than other industries but, make no mistake, it is undergoing change. Disruption has been building since market deregulation, which over the last ten years has seen a shift in the ownership of law firms and a steady trickle of innovation in the way legal services are provided and priced. These adjustments have culminated in the current raft of ‘alternative legal services providers’ (ALSPs) that are emerging on the market. These organizations, entering the scene from a range of diverse backgrounds, are challenging the options open to businesses sourcing legal knowledge and skills.
Alternative legal services: supply and demand
So what are alternative legal services? The term encompasses an increasingly diverse range of new and innovative models for delivering legal advice, knowledge and skills. These range from self-service legal tools, contract lawyer services (like our own interim resourcing offering in Konexo), niche/specialist firms built on different operating models and technology-based legal process improvement and automation, to fully managed legal services. The common denominator is that these options can offer greater flexibility and cost efficiency compared to engaging a traditional law firm or employing legal people internally.
Increasingly, as business decision-makers review their organizations’ strategic and financial priorities, they are scrutinizing the value they derive from existing legal resources in-house and externally. Given that these skills and services typically come at relatively high cost, companies are questioning whether it is an effective use of their time to allocate these teams to routine tasks such as constructing standard procurement contracts.
Ideally, businesses should be concentrating these resources on more strategically important, complex and higher-risk activities. The option to source lawyers ‘on demand’ for other requirements, or outsource non-critical legal requirements to an external alternative services provider, is becoming increasingly appealing, and – as clients who make the leap are finding – it can be more cost-effective. Some are even investing in technology to create self-serve platforms that need no lawyer input.
Alternative legal services: savings
Our own managed service, Konexo, will very often lead to cost savings when compared to traditional corporate legal models. This is thanks to our diverse legal experience for all sorts of businesses, combined with very efficient processes as well as access to the latest technology for automating processes such as document assembly and matter management. Indeed, the rise in smart technology-based services (for example, contract automation, and more sophisticated and dynamic matter reporting) is another significant contributor to the case for using alternative legal services.
A number of our clients have realized the advantages of thinking differently about the way they source legal services. Their own calculations confirm that there is no sense in expensive senior lawyers busying themselves with basic commercial contract work, when an external provider could take on these tasks directly for the business. If the right service provider can deliver results better, faster, cheaper, it focuses the mind – demanding a review of existing practice.
Something our clients particularly appreciate about the way we work is that we offer the full spectrum of options, guiding the organization throughout the transition. We can take on routine work or special projects for clients, provide legal resources on tap, and/or help internal legal teams implement technology to make their own practices more productive and cost-efficient. Whatever the scenario, our experienced consultants and legal practitioners are on hand to advise on, set up and see through the changes. Crucially, we are also a division of a respected global law practice – Eversheds Sutherland. So, even though embracing ‘alternative services’ may feel bold to organizations initially, our clients have the reassurance of an established legal brand.
All businesses can benefit from alternative legal services
The potential to benefit from new legal service options isn’t dictated by the size of the organization. Whether the business is vast or small, existing legal resources are likely to be stretched while costing a premium, so there is a robust case for making budgets go further and extracting greater value from experts’ time.
Using an ALSP like Konexo will also inherently involve a review of existing practices and the extent to which these are standardized and streamlined. Whichever service option the organization decides on, then, they will start from a better place because they can now understand exactly where their current inefficiencies are concentrated. For some businesses it will be a sub-optimal use of skilled resources; for others it might be poor support for remote collaboration or a lack of visibility of performance inhibitors – challenges that could be readily overcome through the strategic application of technology and improved reporting.
The rise of ALSPs is exciting and welcome. Just as customers in numerous other industries have benefited from disrupters entering and transforming the market with innovative new business models, those needing corporate legal support can expect good things to sweep in on the current tide of change. Whether their response is to rethink every aspect of corporate legal procurement on the back of this, or to restructure only certain aspects of service provision, the key to truly profiting from the changes is to be alert and open to them.