As you make your way through law school, you gain valuable knowledge of historical case law, rules and procedures, and the finer points of research. However, when it comes to understanding the legal industry and business of law, many young attorneys start their legal career not fully understanding the legal landscape in which they will be working. After the 2008 financial crisis in the United States, firms were forced to take a fresh look at their internal tools and resources and make necessary changes to reduce costs and become more efficient. Many of these adjustments have reshaped client expectations and the way in which work is done. In this post, we will examine some of the new and innovative practices that the legal industry is adopting in order to improve and accelerate the output of work product for clients.
Legal Process Outsourcing
Cost is one of the biggest drivers of change, and, as with any business, law firms are striving to keep internal costs down while maintaining high-quality work product and quick turnaround. A practice called “Legal Process Outsourcing” (LPO) has been adopted by some firms, and they are now outsourcing work that is generally done by junior attorneys or paralegals. Basic research and document review are two examples of the types of work that might be sent to an LPO rather than being completed in-house. The biggest advantages of LPO service providers are their ability to provide cost savings, the scale of access they have to qualified talent with niche expertise and reduced turnaround time. All of this adds up to producing a quality work product at a lower cost for the firm while giving junior attorneys the ability to focus on novel legal research and work.
Alternative Billing Models
A staple of the legal industry is the billable hour. Whether time is billed in six-, 10- or 15-minute increments, the billable hour is imperative to how a law firm makes its money. As legal fees increase, clients become more cost-conscious and routinely utilize software that examines legal bills to keep their spending in check. The alternative billing process has gained ground as a way of charging clients based on flat, blended or capped fees, as well as contingency or percentage fees. Oftentimes, it is the corporate clients that have the leverage to negotiate fees and costs, as well as dictate their own billing guidelines. Although billable hours may never really go away, the manner in which those hours translate to client bills will alternate from client to client and from matter to matter.
Alternative Legal Service Providers
It is important to learn about internal firm functions and processes that can assist you in getting your work done quickly and efficiently. Alternative Legal Service Providers (ALSP) are a resource that may not be part of the law firm, but nevertheless are integral to its success. These providers include e-Discovery counsel, litigation support professionals, trial consultants and jury consultants. The main driver to partnering with ALSPs is their ability to provide expertise on a subject matter or service. This also presents an opportunity for law firms to disengage from certain non-law-related functions within the business and, in some cases, even eliminate certain costly internal departments (IT, marketing, accounting, etc.) by outsourcing. Further growth of ALSPs will continue to impact attorneys’ routine work, forever changing the legal landscape, remember, a Chatbot that contests parking tickets already exists!
Change is inevitable; even if it progresses slowly, it will still come. The aforementioned changes are only a few examples that are reshaping the legal industry and how legal services are provided. Just as important as knowing the case law, knowing that changes to the legal landscape are coming will help keep you nimble, knowledgeable and prepared as you enter the legal industry.