The Future of Collaborative Legal Services
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1 The Future of Collaborative Legal Services
2 TABLE OF CONTENTS The Future of Collaborative Legal Services... 3 Cost is not the only driver... 3 Law firms continue to play a key role... 3 Corporate legal departments must be active and equal participants... 3 The pace of change must accelerate... 3 Procurement must have legal services domain knowledge... 4 Champions for change will need to evangelize... 4 Keep the momentum going... 4 The Future of Collaborative Legal Services 2
3 The Future of Collaborative Legal Services Integreon and Legal Week hosted a roundtable discussion in July attended by GCs from leading global corporations and senior executives from top global law firms. The participants discussed how in-house counsel, law firms, and LPO providers can collaborate to deliver innovative and cost-effective legal services. This report synthesizes the key issues that were discussed and the conclusions drawn from the dialogue. The general consensus was that the model for delivering legal services is changing. Ultimately, there is a vision of a highly collaborative approach that will result in a significantly more streamlined and cost-effective model. Changes, to date, however, have been mainly tactical and reactive and made on a smaller scale. Corporate legal departments are demanding that law firms reduce fees for routine work. Law firms and corporate legal departments are passing work over the fence to LPO providers in an effort to reduce costs, thereby enabling reduced fees. While these steps addressed immediate needs, a more strategic and collaborative ecosystem is now evolving. In-house counsel, law firms, and LPO providers are beginning to forge strategic relationships to design the right solutions and shape a new model for legal services delivery. Cost is not the only driver While cost pressures remain one initial driver for change, there is consensus among all parties that the way legal services are delivered needs to be substantially redesigned. In addition to gaining significant cost efficiencies, a new legal services delivery model will also improve effectiveness of the services delivered and enable better risk management. Under a new collaborative model, corporate legal departments can better manage the flow of global contracts to reduce risk and realize revenue, ensure compliance with burgeoning regulation, more effectively control litigation risk, and close M&A deals more quickly. Law firms continue to play a key role Contrary to early concerns that LPOs would compete directly with law firms, it s becoming increasingly clear that the new model is a true ecosystem with each member corporations, law firms, and LPO providers playing key roles LPO providers do not practice law and are not true alternatives to law firms. Within this global legal ecosystem, in addition to practicing law, law firms provide critical oversight, supervision and custom, premium legal advice. In fact, neither LPO providers nor law firms can individually deliver the holistic, end-to-end services corporate clients require within this new legal services delivery model. Law firms are still, and will remain, the first port of call for legal advice. While one could argue that law firms, particularly those with captive LPO units, can provide the full spectrum of services, it is difficult for all of them to do so as cost-effectively as required by their clients. It is difficult to envisage law firms maintaining the ongoing investment in process improvement and cutting-edge technologies required to sustain the new legal services delivery model. In the past, corporate legal departments had to assemble end-to-end services. Under a new collaborative model, however, law firms can work with LPO providers to expand their offerings and deliver complete, end-to-end solutions to their clients. There are a growing number of law firms who are taking new solutions to clients in partnership with LPO providers. Furthermore, corporate legal departments look to law firms to share in and sometimes even own outright the responsibility of managing the LPO relationship or provide the requisite degree of supervision and quality control. Corporate legal departments must be active and equal participants Corporate legal departments must be willing to roll up their sleeves and work together with law firms and LPO providers to hammer out the legal services delivery model that most effectively meets their needs. In order to ensure that the new model addresses the requirements and challenges of corporate legal departments, law firms and LPO providers need visibility into the organizational metrics and processes of those departments. In fact, there are a few trailblazing GCs who are doing just that and they are already seeing positive results in higher quality, more complete solutions which are being delivered more cost-effectively. The law firms involved have seen an increase in revenue from the corporations they are working with and hence both sides have benefited. The pace of change must accelerate Corporations are giving their legal departments mandates for change within timeframes measured in months, not years. Law firms, on the other hand, are traditionally slow to change and their very structure typically being governed by a collective makes it more difficult to support business model agility. All members of the ecosystem must find a way to evolve at a pace that will address the pressures the drivers for the change in a timely manner. Law firms who implement a culture of change and increase their agility quickly will, in fact, find themselves in a position of significant competitive advantage. The Future of Collaborative Legal Services 3
4 Procurement must have legal services domain knowledge Procurement professionals are playing an increasingly significant role in the legal services delivery model. Procuring legal services effectively requires domain knowledge of key criteria for evaluating those services. Historically procurement of legal services remained the remit of the General Counsel s office. Given their new role as a strategic participant in the process, it is incumbent on procurement to familiarize themselves with the existing legal services delivery models, the benchmarks for evaluating effective legal services delivery, and the art of the possible for future collaboration. Champions for change will need to evangelize The roundtable participants agreed on the inevitability of a new model for legal services delivery and their very presence at the event signaled an enthusiasm for this evolution. The lively discussion at the roundtable demonstrated optimism about reshaping the way legal services are delivered. This vision is not, however, universal throughout the industry at least not yet. With a clear grasp of the pressures and challenges, all the parties involved corporate legal departments, law firms, and LPO providers can work together to develop a viable and mutually profitable new model. The champions for change will need to evangelize within their respective organizations and communities to provide the communication, education, and motivation needed to transform the discussion into real-world change delivering true business value for all parties. Keep the momentum going While the roundtable resulted in a great discussion, we need to take action in order to ensure that real change happens. We need to proactively further the dialogue. We propose the following: If you are a law firm, select one of your key clients and an LPO provider. If you are a corporate legal department, work with one of your strategic law firm partners and an LPO provider. Sit down as a group and start to develop a new collaborative legal services delivery model that will work for you. The Future of Collaborative Legal Services 4
5 For more information contact: Copyright 2013 by Integreon No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the permission of Integreon.
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