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Welcome to our Law.com Barometer newsletter, powered by the ALM Global Newsroom in advance of Legalweek 2021. Each week this newsletter will bring you the trends, disruptions and shifts our reporters and editors are tracking through coverage spanning every beat and region across the ALM Global Newsroom. The micro-topic coverage will help you monitor the changing landscape of the legal industry and prepare you to participate in the events taking place at the year-long #Legalweek21.
The Shift: The Future is Not Just About Innovation
Talk to anybody trying to make waves in the legal field, and it's all about working smarter, faster, more efficiently, and being more data- and tech-savvy—imperatives that sound remarkably similar to the wider business world. But isn't that antithetical to how law firms grow, to the idea that client service and personal relationships are central to the counsel/client relationship? But, as it turns out, today's law firms that are trying to marry law and technology through alternative legal services are finding it's important to not choose one or the other—it's the integration of traditional law and alternative services that is fueling growth.
The Conversation
Ask just about any law firm leader of a tech-centric practice group or captive ALSP, and often the first thing they'll point to as a driver for success is those old-fashioned attorneys. "Embedding such alternative teams within the law firm gives clients the benefits of the institutional knowledge, expertise, and experience with complex legal issues from the firm’s professionals," noted Alison Grounds, leader of Troutman Pepper's eMerge subsidiary. Tess Blair, the leader of Morgan Lewis's eData practice, similarly pointed to her group's structure as an asset, saying they can "go in as lawyers" for investigations, then help remediate and manage long tail risks from data events. "That is a big distinction that shouldn’t be lost. If we were a subsidiary firm, I wouldn’t be a partner of the firm, I wouldn’t be practicing law. We’re able to do everything an ALSP can do, but still practice."
Outside legal services providers might argue that being connected to a firm would hold these groups back from true efficiency, that they are limited by the normal billable hour-centric and partner-oriented model. But Bryon Bratcher, director of practice solutions at Reed Smith and managing director of its Gravity Stack subsidiary, told me in August you can't be efficient without having the knowledge to know what to change: “We didn’t shy away from the fact that we are a subsidiary of Reed Smith. We played up to the strength of the collaboration between the two entities. … Everything that we build is demand-led based on our experience and our collaboration with the subject matter experts across those practice groups. I truly believe that’s a differentiator, and that’s the way we played it up.”
The Significance
As firms are building out new efficiency-enabled practice groups and captive ALSPs, there may be an inclination to completely build something from the ground up, eschewing the standard practice of law to try something revolutionary. But while revolutionary is a nice buzzword, it's also near-impossible and likely wouldn't take advantage of the inherent benefits that working with a firm would have—namely, it's attorneys. The law firm of the future is still going to be based on lawyers' expertise; the ones that succeed will find the best fit between traditional client support and innovation, rather than focusing on one or the other.
Or, as Bratcher put it, “There’s a lot of smart people in the industry, especially at law firms, that have the opportunity to do this kind of thing. I think if they do, they should take advantage of it, because it’s an immediate differentiator, that closeness with the subject matter experts.”
The Information
Want to know more? Here's what we've discovered in the ALM Global Newsroom: Competition Where? ALSPs Are Baked Into Law Firms' New Offerings The Law Firm Subsidiary: Marrying Firm Practice Integration with Flexibility and Agility Neither 'Captive' Nor an 'ALSP': Morgan Lewis' Tess Blair Surveys the Firm's eData Practice What Is New Law? The Definition Can Be Broad, but It’s All About Value Big Law Doing More Than Dabbling in New Law, Report Finds Big Law Goes ‘Alternative’: Can Traditional Firms Disrupt the Disrupters? After Sliding at Pandemic's Start, Law Firm Subsidiaries Are Soaring ALSPs Are Still More Threat Than Partner to Law Firms
For more information on the Legalweek(year) virtual experience, visit legalweekshow.com or follow @Legalweekshow and engage with #Legalweek21 and #Legalweekyear for updates. The Forecast
From her vantage point at Troutman Pepper eMerge, Grounds predicts "the segregation of these services to external providers—which was common over the last five years—may yield to an increasing reliance on law firms who embed these practice teams within the larger firm to provide an integrated approach. As with any service provider, the success and use will depend on the individual teams and their ability to innovate and constantly adapt." While that of course would benefit Grounds' practice, I also think she's spot on. Insourcing in business can be tough to complete, but its reasoning is quite simple: If you can do something as efficiently, if not more efficiently, than outside providers, why not do it yourself?
For years, law firms made the determination that many tech-enabled processes were outside of their purview, that they couldn't do them efficiently. Slowly, as the recognition dawns that a firm's attorneys can be an asset, rather than a hindrance, to efficiency, that calculus could slowly begin to change. It's likely easier said than done, but ultimately, it's all a matter of integrating the firm's traditional practices to new service models in a productive way.
Zach Warren is the editor-in-chief of Legaltech News. Based out of Minneapolis, Minnesota, Zach has been with LTN since 2015. He can be reached at zwarren@alm.com.
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