Joe Tiano covers five key topics to cover with your Outside Counsel in 2022. If you are interested in seeing how Legal Decoder can make these conversations easier, request a demo at legaldecoder.com!

There is no question that Alternative Legal Service Providers (ALSPs) are a formidable presence in today’s legal market. The increase in ALSP engagement is largely due to a change in client expectations. Clients now demand high-quality, technically proficient legal services with transparent, predicable pricing. To meet these demands, both law firms and corporate legal departments have turned to ALSPs to help increase their efficiency and proficiency, while decreasing their overall costs. But is an ALSP always the most economical option? Many law firms say no. Over the past several years, legal technology has evolved to include solutions that allow law firm attorneys to provide the highly specialized services that ALSPs cannot - without sacrificing value or efficiency

Originally seen as competition, law firms are now reaping the many benefits that Alternative Legal Service Providers (ALSPs) offer. Used for similar operations as with legal departments, ALSPs assist law firms with repetitive tasks to allow them to provide better service to their clients, put a stronger focus on their core work, and increase overall profitability According to a survey conducted by the American Bar Association79 percent of law firms reported engaging ALSPs in 2020.

In preparation for our upcoming webinar, a conversation has been taking place regarding investment in legal department innovation. The premise is simple: the department’s budget has increased, and the general counsel must decide how to best use the extra cash to foster long-lasting innovation, with the two final options being 1. Invest in AI enabled services; or 2. Invest in an ALSP engagement.

In order to start the buying process to achieve the most meaningful results, it is important for general counsel and legal department operations personnel to first address their workflow bottlenecks and process pain points from the perspective of the business units they work most closely with. Once the department identifies the key workflow deficiencies as stated by their clients, it can start building solutions for those problems.

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.