Leave the business-as-usual legal work to ALSPs

As competition across the legal sector continues apace, ALSPs have become an increasingly integral part of the global legal landscape over the past 15 years. Despite this, there still often remains a curious air of mystique surrounding exactly what ALSPs can do.

Often equated with legal process outsourcing (LPOs) models, which typically handle high-volume, low-value, process-driven work, some ALSPs in fact offer a wholly different approach to resourcing and technology that can significantly relieve internal pressures on in-house teams.

Many recurring tasks – from drafting and delivering standard contracts, templates and agreements, such as statements of work and non-disclosure agreements; through to compliance and property asset management and other high-volume transactional mandates – can add up to significant time commitments for in-house legal departments. This business-as-usual (BAU) work often takes away much-needed time and resources from in-house teams, preventing them from focusing on higher level tasks that add value to the business, as well as other aspects, such as strategic litigation, that are often more complex, time sensitive and critical to the business.

ALSPs, especially managed legal services, offer day-to-day legal support underpinned by decades of subject matter expertise. This gives them the necessary wealth of experience and independent oversight required to bring a more streamlined and efficient approach to BAU work.

Businesses regularly face significant contract backlogs or volatile volumes. ALSPs can add value by reviewing clients’ contractual relationships with key suppliers and undertaking a comprehensive review of existing templates and contracts.

Not every contract will require the same risk approach. Streamlining contract templates to make them more tailored and relevant to the value and complexity of a transaction or engagement is essential. ALSPs can help assess and manage that risk and consider ways to drive efficiencies, as well as identifying areas that in-house teams can triage to ensure risk is adequately and consistently managed further down the line.

By wearing a ‘consulting hat’ and focusing on optimising repetitive tasks for a business, ALSPs can often share rare insights into an in-house legal department’s inner workings. They can observe unnecessary duplications and inconsistent processes, as well as contracts, templates and even negotiations that are misaligned with the overall direction and expectations of the organisation. In this way, ALSPs can readily identify pinch points, reduce backlogs and scale up solutions to save in-house teams’ time, as well as reducing project costs and their overall legal spend.

For instance, we have seen that leveraging a data-driven approach to contract review can help clients develop the tools and know-how to categorise contracts by risk level at the outset and create simplified versions of contracts for lower-risk mandates. This creates fewer escalations due to clearer risk thresholds, reduces time to signature and ultimately lowers legal spend and creates faster contract turnaround times for busy in-house commercial teams.

Importantly, ALSPs can also bring rigour and organisation that helps to reduce process-related risks and improve ease and effectiveness of compliance activities.

This type of legal support is particularly helpful at times of change. For in-house teams facing a restructure or a sudden resource gap, an ALSP can quickly identify bottlenecks, implement standard and streamlined processes and workflows, and provide hands-on BAU legal support to free up clients to focus on more strategic priorities. Introducing a managed service provides an opportunity to enlist your partners’ expertise to improve, not just relocate, a service.

Often small changes, like removing non-essential clauses and simplifying language to enhance clarity in contracts, or moving to a more widely accepted market norm, can be all that’s needed to relieve pressure on an in-house team’s ability to manage BAU commercial contracting work. This can make all the difference to give the business a scalable and more resilient legal model to handle future contracting and mitigate risk.

Historically, highly regulated and highly specialised sectors such as financial services have lent on the expertise of ALSPs for BAU work. Now there is growing demand from all sectors for these types of tasks, particularly contractual review. ALSPs are also ideally placed to identify gaps or risks in procurement and supplier portfolios.

Although AI is often seen as the legal sector’s answer to efficiency, all organisations need to have the right processes, the right ways of working and the right triage criteria in place to know what BAU work should stay in-house and what work can be outsourced. If a task is deemed business critical or carries potentially high levels of reputational exposure, you may choose to retain it in-house. However, ALSPs can help businesses assess the risk profile and determine the right provider for each type of legal matter.

Technology, whether AI or other legal tech, also has its place, and can be leveraged to automate processes, reduce timelines and legal spend considerably, but it is not a silver bullet. ALSPs can help with the optimisation of existing technologies as well as advise on options for bringing in new technologies. As with traditional law firms, so much of clients’ relationships rely on personal relationships with specific individuals or a specific team. The value of an ALSP lies in its role in acting as a trusted adviser and partner to clients that can work collaboratively to clear tasks, optimise performance and ultimately support the business.