There has been a rising trend of the use of alternative legal service providers (ALSPs) in the legal industry, as legal departments are now utilizing these third parties to handle routine tasks. ALSPs collaborate well with legal departments as well as law firms due to their expertise in assisting with recurring tasks, handling mass customized work and providing technology enabled services. Utilizing a traditional law firm or in-house personnel for this type of work may not translate to optimized value as it would result in higher costs and often a lawyer is not necessarily needed for the high-volume, low risk task. The ALSP market segment is growing between 12 and 15 percent per year as more and more companies and law firms are investing in ALSPs. When making that investment decision, what factors should be considered?

While the corporate legal departments and outsourced law firms sometimes perceive aspects of the engagement differently, the unifying aspect of their relationship has always been the adherence to the legal strategy and a matter-centric philosophy. Along these lines, re-imagining the corporate counsel and outside firm relationship around optimized skill matching for each matter will bring the most value out of the relationship. Skill matching historically has been something law firms have handled internally and independently. What has been incredibly interesting is how many law firms are establishing “captive” legal process outsourcing arms (LPOs) or alternative legal service providers (ALSPs) that are owned or affiliates of the law firm to extend their skill matching capabilities

Roughly 95% of firms do not internalize the event of not receiving business from a company after an engagement synonymous with being fired from their post. On the flip side, only about half of law departments consider firing an outside firm for a failure to comply with outside counsel guidelines. Ultimately, this distinction causes a few problems for the inside-outside counsel relationship. As matter centricity has become the operating standard for general counsels’ engagements with outside counsel, it’s important that law firms bring their best practices for each and every engagement.

One of Legal Decoder’s biggest strengths is its capability to surface crucial data from legal invoices, which helps organizations establish strategies for keeping their spend on target. But with each piece of data comes a story that illustrated how the business of law can be innovated upon.

For decades, it seems like the personnel in charge of creating budgets for legal functions have been working under the same pretenses as HGTV hosts, but now with a stronger grasp on industry prices and rates, the budgeting process can be streamlined substantially.

Over the past couple of years Legal Decoder has worked on several high-profile bankruptcies and analyzed hundreds of millions of dollars in fees for the U.S. Trustee’s Office. Along the way we have had the opportunity to observe and provide solutions to the challenges that come with the fee examination process during bankruptcy administration.

Jessica L. Bilotta, Esq. & Emma Burnett-Balbier Interview Thomas Bielli about how they use Legal Decoder in their bankruptcy practice.

Law firms have been hearing client outcries for change, innovation and re-imagining the legal services business delivery model even before the current health crisis. Over the past few years, some positive operational changes and innovative measures have been implemented by law firms, borne mostly out of necessity as opposed to self-initiation.

In the COVID-19 era, law firms must think expansively about strategic planning. Certainly, the transition from traditional-to-remote operations has posed practical issues for law firm leaders; however, the issues have required mostly tactical responses. Now, as business life transitions into the “new (ab)normal,” law firm leaders face a massive, unprecedented challenge to architect a strategic blueprint for the future. Obviously, no single blueprint applies to every law firm.

The CEO’s organizational mandate is given “Revenues are down. Expenses must be cut.”  The CFO’s natural reaction is to look for expense reductions in departments that are wide viewed as cost centers, like human resources, IT, accounting and, of course, the legal department. The Chief Legal Officer’s new mission critical initiative is savings. At a time when the risk profile and legal exposure of many organizations approaches extreme levels, the legal department must cut costs and drive savings while mitigating risk. 

Corporate legal departments want to talk about rates.  They want to talk about standard rates and alternative rates.  Then comes the hourly rate discount discussion because a discount means better value. Rates are part of the fee for service equation (Rate x Time = Fee) but the far less important component when it comes to driving value.  rate negotiations are arguably just a red herring - a seemingly plausible, though ultimately irrelevant, diversionary tactic. The conversations should focus on the work itself.  More specifically, who should be doing it, and how long should it take. Time efficiency is the red flag issue.