Make no mistake: the emergence of alternative legal service providers (ALSPs) over the last decade – and in particular, their surge in popularity in recent years – has shaken up the legal landscape.
Businesses and corporate legal departments are turning to ALSPs for many routine legal services – like document review, contract review, and other tasks involving high-volume, repeatable legal work – that ALSPs can perform at less cost than law firms, often by contract attorneys and through finely–tuned, technology-assisted processes.
Is this a case of a new, disruptive type of organization seeking to knock an older, more established type of organization off of its pedestal and take its place?
Well, no. It might be more accurate to view the legal landscape as an ecosystem of sorts, where each individual entity has a specific role to play – and law firms and ALSPs are simply redefining the roles that everyone should play to deliver the best results for the end client.
Law firms are the subject matter experts. Their main selling point has been and always will be their carefully cultivated expertise, collective experience, and strategic legal advice in critical situations.
At the same time, ALSPs have highlighted to law firms the fact that having in-depth, highly specific knowledge is not the only factor involved in delivering a successful project for a client. Law firms appreciate that they cannot always deliver every project for the client within the budgetary outlines the client has set if they do not use ALSPs – or unless they themselves adopt some of the technologies and processes that have made ALSPs so cost-effective.
Some law firms simply don’t have the manpower available to dedicate to large, repetitive contract review projects – not at a billable rate that the client would be willing to pay, anyway. As a result, many law firms are more than happy to have ALSPs provide these services, and they see the value that these organizations provide.
There is no better demonstration of this recognition of value than the fact that many law firms themselves are setting up their own legal services practices, either as an arm of the firm or as a full-fledged subsidiary. These savvy law firms have come to the realization that if they don’t do this type of work, then it is going to be done by the ALSPs.
A Focus on Efficiency
Tackling large-scale contract review projects in a cost-efficient manner is a concept that forward–thinking organizations have been employing for quite some time. However, the market is changing, and corporations are more often now demanding that law firms and any other providers that they’re working with perform that work in the most efficient way possible. In many cases, corporations are even making this point explicit in their RFIs. They specifically ask: How do you create efficiencies in your review processes? What technology do you have in place to assist with this project?
All of this is to say, AI technology has a big role to play here, regardless of who’s using it. It takes the repetitive work associated with contract review and allows it to quickly and efficiently be processed and reviewed, at lower cost. AI tools can rapidly scan through a large corpus of contracts looking for key clauses or provisions that will cull down the data set that needs to be worked on, so that only a small subset needs to be handed off for the in-depth, downstream analysis. Needless to say, this is a much better triaging approach than trying to have humans lay eyes on every single document and the entirety of each of those documents.
Pie, Anyone?
For large, repetitive, process driven projects, ALSPs will continue to be significant drivers of value turning that unstructured data into structured data that can more readily reviewed and analyzed. Those types of projects are right in their sweet spot. The complex, strategic decisions and negotiations of a transaction, however, will continue to be the territory of law firms and an area where they will continue to provide value. Put another way, there are pieces of the pie to be had for both ALSPs and law firms, and they’re qualitatively different pieces of the pie.
So, who is the winner in this landscape where the pie is being shared? ALSPs and law firms certainly benefit, because they’re each getting something complementary from the other that they themselves don’t offer. But, ultimately, the biggest winner might be the end client. They get the valuable expertise from the law firms, and the process improvements, efficiencies, and lower costs from the ALSPs.
It’s the best of both worlds.
