Globally, the ALSP market, though small in relation to traditional legal services, is a ten billion dollar industry that is growing every year. I sat down with one of the lawyers who helped pioneer ALSP services, Mark Ross, the Global Head of Contracts, Compliance and Commercial at Integreon, to understand why ALSPs are having such a big impact on the legal industry.
Unlike law firms, ALSPs deliver high volume, low complexity legal work on a tight margin. This, in turn, drives process improvement and technology implementation in the delivery of legal services. This is to reduce costs and afford a measure of commoditisation to legal services.
Ross said several factors drive innovation: the nature of the global delivery platform, technology (licensed/own), the way the provider is funded, and leadership and a desirability to innovate.
He stressed that innovation is not just about tech but about process and people too. The leadership in ALSPs have a real desire to innovate plus they have access to best-in-brand tech across many disciplines, with flexible ownership and funding structures empowered by great global delivery platforms. It’s the singular focus of the ALSP that differentiates its ability to innovate. ALSPs innovate exclusively within the legal sphere and that’s why they can drive innovation.
On implementing legal tech, he had some important insights. Law firms and legal functions face the same conundrum that face many organisations with regards to tech – BUILD OR BUY?
Ross has, thank goodness, had experience in both. His approach is to ensure that the client gets the “best of breed” technology available to them. This facilitates a hybrid approach. He said that working with clients to identify and implement the best technology that can enable them is vital. ALSPs have the advantage of being able to assist clients, because they have had exposure to many of these issues before.
Budget, appetite for change, and capability to implement are all vital factors to consider when considering a technology enablement. To Ross, it is important to consider the functionality required when procuring a tool, and to find a tool that an organisation can use fully. Use experts that are not beholden to a single tech, he advised. This ensures an organisation achieves the results intended by the tech implementation.
When looking at an outsourcing solution, clients must do their own homework. Ross recommended that you should understand your environment, know what your options are and look for specific, actionable recommendations. This could be centralisation of tasks, reallocation of work tasks, eliminating unnecessary tasks and reengineering workflow and tasks. As an example, Integreon has looked at the contracting function in many Fortune 500 companies that, internally, have thought that implementation of a full Contract Management System would be a magic wand to their contract problems. In reality, the reallocation of tasks and process driven improvements were what made the actual improvements.
ALSPs are only 15 years old. There are great opportunities in Africa, not only to use ALSP’s, be they African or global, to reduce legal costs and drive continuous improvement, but also to be a viable off-shore ALSP jurisdiction for global legal requirements. The increased sophistication of new law providers means that they can service clients all across the world. It has always been the intention that Africa could be used as potential outsourcing destinations for low cost legal work. ALSP can afford African lawyers an alternative employment stream for young lawyers as well as further revenue streams for their firms.
But most importantly ALSPs can reduce legal costs and provide an efficient legal environment, which in turn promotes the access of justice to all stakeholders.