By Shundra Crumpton • February 28, 2018•Writers in Residence
If you read my last blog post, "If It ISn’t Broke, Don't Fix It," then you know that the legal field is changing. Rates are going up, but demand is going down, corporate clients are demanding efficiency through fixed rates, and collection realization has decreased. These bleak statistics are only the tip of the iceberg.
Imagine a situation where a teacher uses Word to create a chart for her class. The teacher is so proud of the chart that she saves it as a template. The teacher then uses the template over and over again for many years. At some point, the teacher tires from having to retype information, the lack of graphics, and limited font options. Fed up with the mundanity, the teacher deletes the template, but saves it in the recycling bin just in case she needs it in the future. After abandoning the old template, the teacher discovers many new online chart creation programs and eventually forgets all about the template in the recycle bin. The template expires and is not missed.
Lawyers are like the template that the teacher deleted. Lawyers and law firms all around the country are in the recycle bin, anxiously awaiting to be needed again. The problem is that the bin is filling up and the proliferation of alternative legal service providers (ALSPs) is causing clients to trade in office visits for a simple Google search to find the right provider.
So, what are alternative legal service providers?
Alternative legal service providers are organizations that do not fit within the mold of your typical law firm. Collectively these organizations provide several different types of legal services, but may not necessarily engage in the practice of law. For example, there are ALSPs that focus on document review, contract management, intellectual property management, electronic discovery, legal research, investigation support, regulatory risk and compliance services, and there are even organizations that provide contract lawyers.
ALSPs pride themselves on reasonable costs and efficiency. ALSPs have become so efficient that law firms and corporations are now exporting their work to these providers. According to a study by Thomson Reuters, one of the leading legal service providers, Georgetown Law School’s Center for the Study of the Legal Profession and Oxford University’s Saïd Business School, a little more than half of all law firms and corporations are using at least one category of ALSPs. There are a few factors that attribute to this statistic. First, many ALSPs are located abroad, so firms like to utilize the cheap labor associated with this option. Next, a large percentage of ALSPs focus on one subject matter, so this allows them to become specialists in this area. Moreover, there are studies that show firms are putting less weight on the cost factor and are instead using ALSPs for their expertise.
How are they taking work from lawyers?
For this section, let’s look at online legal service providers. I’m sure that that you have heard of companies like LegalZoom and Rocket Lawyer, which allow non-lawyers to easily draft Articles of Incorporation, make lease contracts, wills, and draft divorce paperwork. There are even phone apps that allow people to fight a traffic ticket in two minutes. These services allow people to receive legal services on a pay-per-document or flat monthly fee basis. With the ease associated with gaining access to the creation of common legal documents, it is no wonder that the proliferation of online legal service providers keeps some lawyers up at night.
What’s my prediction for the future?
The demand for alternative legal service providers will likely not decrease any time soon. What should lawyers do about this advent of technological disruption? Perhaps it is time to heed the following motto – “if you can’t beat them, then join them.” In the ALSP sphere, law firms are already realizing that providers are more beneficial than harmful. Some firms are even creating their own online platforms so that clients will go to them for form documents rather than a standalone online service provider. In order to avoid becoming obsolete, firms will have to transform into alternative legal service providers.