Posted on June 7, 2021 by Carla Landry
Some predicted the demise of legal services as we know it. First came the push to delegate portions of traditional lawyer work to paralegals, legal assistants and other law firm professionals. Then came ALSPs, legal tech companies, and online self-service websites. But the beat goes on. Law firms are surviving, and many thriving, even as they instantaneously transitioned to work from home during the pandemic.
Chances are ALSPs aren’t going to knock out law firms. By the same token, law firms aren’t going to outlast ALSPs either. But although the full promises of the digital age have yet to be realized, changes are underway. Should you consider a peaceful, even collaborative, co-existence where every entity finds its rightful place on the value chain? Just because ALSPs didn’t make the traditional law firm model obsolete (yet), doesn’t mean that the news of industry upheaval has been greatly exaggerated. Make no mistake: ALSPs are an important part of the law sector ecosystem and a valuable contributor for the foreseeable future.
As with any collaboration, there are a number of challenges in the move to ALSPs. But it may not be what you imagine. The biggest difficulty is not wrangling the funding, overhauling the business processes, or finding the right partner. Rather, it is the firm’s culture.
It's in the Culture
Culture happens organically. Neither the competition nor the clients will wait for your firm to change organically, however. There are some levers you can pull. Part of what drives culture are the traits and characteristics of the type of people attracted to law firms. In addition, internal incentives and the organizational structure do a lot to create cultural dynamics.
You’ll want to look at all of this over time. But you can make an immediate impact by looking at behaviors that are endemic to law firms. The managing partner can’t change the culture by decree. It will require leadership involvement and intentional actions. At some point when new processes are in place you’ll implement milestones, goals, metrics, incentives -- change is more than a fleeting notion. But to start, you need to build and promote a case for change. By doing so, you will create the environment in which your ALSP initiative can succeed.
From experience, I can tell you that there are three aspects of law firm culture that you will need to address as you move to collaborate with ALSP services. They are:
Keep these in mind as you build consistent messaging in front of your move.
Lawyers are paid to manage risk for others. So it makes sense that they are generally risk averse. You can, however, use risk in your favor. Risk is, after all, relative. You have greater probability, for example, of sustaining a head trauma playing football than from ice skating. For law firms, the risk of doing nothing versus doing something is huge.
In the past, lawyers have been reluctant users of technology, in part, due to risk aversion. This lack of interest propelled competitive forces. Luckily, that’s changing quickly. Digitization is happening. Now Big Law has joined the party creating their own captive alternative legal services. It’s not just about ALSPs, either. There are other movements, as well. Low-code software, increasingly innovative uses of cloud technologies, and rapid advances in artificial intelligence--all of these have the ability to drive even greater efficiencies and really transform the industry.
For several years, technology adoption in law has been accelerating. We are, arguably, on an exponential growth path. And as technology becomes increasingly accessible, even the smallest firms have the capabilities to compete with the largest. Law firms can decrease the risk of competition and dramatically stem the drain of profitability by taking carefully qualified risks.
ALSPs do processes better, cheaper and faster. But it’s not just about cost. Using world-class technology, ALSPs reduce risk, increase compliance, and give practice groups the flexibility they need to pursue new business opportunities.
Rogue Actors and Siloed Behaviors
The billable hour, the partnership structure, and the compensation system all contribute to the highly competitive culture in many law firms. Partners are part of a zero-sum game. The finite pie gets divided and once the allocations are made, there is no more. If someone gets more, the others get less. Small wonder there is little incentive to collaborate in a law firm.
According to Harvard Law Fellow Heidi K. Gartner, PhD, collaboration is not a soft topic. It may be difficult to achieve, but it has quantifiable outcomes in terms of profitability. Further, collaboration allows law teams to tackle matters in a way an individual lawyer couldn’t do alone, involving other types of experts who can give contextualized viewpoints that may not otherwise be considered.
Collaboration is difficult, as mentioned. It requires us to step back and allow someone else to be the smartest person in the room. It requires us to work across lines of differences and outside of our comfort zones. Also, collaboration takes time. The results may not be immediate, but now is the time to keep people focused on the vision and intrigued by the bigger picture.
Threat to the Status Quo
The move to an ALSP enabled service delivery model should not be conflated with the billable hours discussion. ALSPs are about delivering better client value. Period. When the lower-value work is taken away, lawyers can concentrate on what they do best: practice law. Few people went to law school so they could spend the majority of their time on document review.
Consider what the firm has stood for in the past. The vision going forward must reflect these cherished values and more. Start with what you will do now to create client value. How will the firm continue to thrive in the future?
As much as we resist technology, it has improved our lives and not taken away our jobs. Lawyers will still be lawyers. The question is what place will law firms take in the value chain? ALSPs will likely evolve to something even more efficient. No firm needs to be left behind in the digital revolution. All firms have a say in how they choose to participate.
Stop by for Part 3 where we’ll discuss how to find the right ALSP partner.
About the Author: Carla Landry is a Principal with LawVision, where she coaches legal teams on implementing legal project management and legal process improvement techniques into their matters. She leads the LawVision legal process improvement practice. Carla has spent over 25 years working in the legal industry, focused on helping lawyers manage their matters effectively and efficiently to enhance client relationships and improve financial performance. She was an Adjunct Faculty at the George Washington University teaching Economics and Profitability of Law Firms as part of a master’s program in law firm management and is an Advisory Board Member of the Legal Project Management Institute. Also, Carla co-created the first legal project management certification program and launched the first online eLearning courses in legal project management (LPM LaunchPad Certification and LPMAware). She also developed two online e-learning courses for the Practising Law Institute (PLI), including a Telly Award winning one on process improvement and another on law firm profitability. Click here to read more or connect with her on LinkedIn.