And it Starts with Choosing the Right Partner…
We have written about Alternative Legal Service Providers a number of times now. You can read these articles here, here, and here.
But that’s only because we are so excited at the immense potential that this field of law demonstrates.
ALSPs are advisory firms with – generally speaking – a younger workforce, smaller client base, and a big emphasis on long-lasting relationships. Anyone engaging with an ALSP can expect them to really invest in your business. Put together with the notion of cutting costs and diversifying the advice they receive – business leaders have become increasingly more interested in the ALSP model. And who can blame them? It is appealing.
But in-house legal departments are not just looking for cheap legal services. They are looking for legal service providers that are a blend of lawyer and those that possess effective project management, technology, and process optimisation expertise. A hybrid if you will. And ALSPs are perfectly poised to assist clients leverage technology to automate their legal workflow, whilst keeping costs low. What’s more, because ALSPs can integrate new and up and coming technologies seamlessly into their product offerings and delivery models – being (as we have said before) “early adopters,” they are able to rapidly scale up and down to meet the changing needs of a client’s business.
We believe that traditional law firms and ALSPs could be the new master blend in the making, the status quo is still somewhat in place. That is – traditional law firms handle the high-stakes, complex legal matters, while the ALSPs – with the help of process automation tools – manage the repetitive and labour-intensive tasks more efficiently, with fewer errors, and at a reduced cost – thereby fitting into a cost-conscious legal department’s overall engagement strategy like a glove.
ALSPs also offer the kind of unparalleled scalability that law firms are just not able to offer. In-house legal teams can engage with ALSPs for specific, short-term projects where case load is set to skyrocket for a brief period of time, or they can enter a long-standing relationship to manage ongoing repetitive or labour-intensive legal tasks.
This adaptability allows in-house teams to scale their capacity when workloads surge without adding headcount that may not be required at a later stage.
And with the ability to offer a flat fee billing structure for projects (so that legal teams can benefit from a more predictable cost structure), engaging with ALSPs more regularly no longer seems to be an “if” question rather a “when” logistics scenario.
So, if that’s the case and harnessing the power of ALSPs is something of a fait accompli, the big-ticket item here is – how do you go about choosing the correct ALSP for your particular needs? After all, no two snowflakes are alike.
In an article we did a while back titled How to Select the Right Service Provider, we set out an 11-point checklist to be used when selecting an appropriate service-provider. Much of the same can be applied here when choosing the right ALSP for your project and/or team –
1. Price –price and bang for your buck is on the top of most business’s lists, especially with the current high cost of living expenses. But the lowest price shouldn’t be the only deciding factor. The goal should be to get the highest value or worth for the agreed price. It’s important to add that while the cheapest price may seem enticing, this can often reflect poor quality of work, insufficient experience or perhaps hidden terms and conditions (even lawyers make mistakes sometimes) that result in you paying more than what was originally quoted. This can land you in hot water if you aren’t careful. Ask questions – remember the pricing models of ALSPs are quite different from traditional law firms. Some operate fixed-fee pricing structures, others offer subscription services, sometimes both. Adapting to a different pricing model other than billable hours can be hard to get your head around. Have a clear idea of what you want an ALSP to achieve when you engage them. Make sure this is written down and that there are measurable deliverables.
2. Quality of product or service – at the end of the day, the buck stops with you. If the ALSP you engage with delivers poor quality work or fails to deliver on the agreed upon day, your neck will be on the chopping block. Not the ALSP. So, ensure that the quality of the services they provide is of a high standard. Again, ask questions – enquire about turn-around times, ask for referrals from other satisfied clients. Do your due diligence.
3. Verify reliability – it’s important that you verify whether the ALSP has met deadlines, completed projects, in what time frame and whether or not their other clients were satisfied with the work. You need to be able to rely on the ALSP to perform as agreed. If there’s any indication that they may not be able to, perhaps you need to relook at who you’re getting into bed with.
4. Delivery timings – carrying on from whether the potential partnering ALSP is flexible enough to be able to meet your requirements, comes the need to ascertain what their ordinary delivery times entail – are their turnaround times a few days or a few weeks after receiving instruction? This is important to not only manage your own expectations but those of your team members, higher-ups and possible clients as well.
5. Sustainability and financial stability – being able to rely on an ALSP includes the assumption that they’re able to settle their financial responsibilities and operate as normal. Should the ALSP go out of business while conducting services, it can result in your own business being in an upheaval as you try to pick up the slack. As set out by Volopay – “See if they had any instances where they couldn’t pay financial liabilities on time, or had to get financial assistance. Check if they can continuously cater to your supply requirements and scale up if needed.”
6. Flexibility and scalability – this is all about how quickly ALSP can respond not only to changes in business requirements but also to changes in your needs and demands. This is, after all, their role. To scale up or down as is required by a project or time of the year. If the ALSP isn’t able to adapt to these changes on the fly, then perhaps you’re barking up the wrong tree. It’s your job – at this point – to ensure that the ALSP is able to meet changes and improvements with gusto. As Business Gateway sets out – “Flexible suppliers help you respond quickly to changing customer demands and sudden emergencies”. And that should be top on the list of crucial things – especially when keeping in mind the speed with which business moves nowadays.
7. Business presence – this may not reflect – initially – too favourably on start-ups or newly formed businesses, but…. It may be worthwhile checking how long ALSP has been in operation for and how many customer reviews they have. Because their business presence reflects their reputation and standing within their industry. Obviously, this doesn’t mean you shouldn’t consider start-ups or fledgling businesses, it just means that you must go into the partnership with your eyes wide open. Engaging with a start-up or fledgling business will also depend on your needs and what you expect from the ALSP. Perhaps the ALSP is so niche that their “newness” is not a factor. This will all depend on the circumstances. The best thing to do here is to look up reviews, especially the negative ones, to understand exactly what you’re getting yourself into. Online presence will also be important – do they have a website? Are they on LinkedIn or Instagram? Or are they fly-by-nights relying on their (perhaps) cheaper price to gain clients? Always do your research!
8. Clear communication – Nat Turner said that “Good communication is the bridge between confusion and clarity” and that’s apt for this section. Regular communication with the ALSP will be necessary for an ongoing and successful relationship. Especially when stress is high, and workload is heavy. Without clear communication, there can be disagreements about what needs to get done, how it should get done, timing expectations and other important crucial aspects of your transaction. Clearly articulating what you want to achieve by using an ALSP will put you in a better position to evaluate options and find the match that best fits your needs.
9. Training – this is a really “nice to have” but worthwhile considering when weighing up ALSPs. Training programs, helpdesks offering unwavering support whilst at the same time ensuring upgrade regularity and project planning are decisive weapons in your arsenal of top shelf ALSPs. Be sure to seriously consider these when conducting your due diligence.
10. Customer Service – an often overlooked but crucial item is customer service. Here it’s important that you check whether the ALSP has a team to support you after you have decided to utilise their service offering. Is there a dedicated team to implement the project and more so than that, is the team able to follow a properly managed – and documented – procedure? If the implementation process sounds too random then it’s probably not the right choice. Linked to this is a service or help desk facility. How is the after sales service and support managed? Is there a proper tracking system with the ability to prioritise and provide feedback in place?
11. Data protection – this is vitally important if your requirement involves cloud-based products and hosting services. You need to find out where your valuable data will be stored. Which data centre is the ALSP using? Does it conform to international standards? You also need to find out if the ALSP has proper security and backup procedures as well as crucial disaster recovery sites in place. Anything less than the absolute best in this regard is simply not good enough. The risks are too great! Especially in the legal profession where the protection of private information and data is regulated.
Whether you need to expand your team’s capacity, fill a temporary gap, or access niche expertise, ALSPs are here to stay and are even gaining traction and momentum. They help in-house departments reduce costs, work more efficiently, and keep stakeholders happy. And those are all great things!
When choosing which ALSP to engage with – knowledge is power. Not only do you need a strong sense of your business’s key information, but you also need to know as much as possible about the ALSP. A successful ALSP relationship requires visualisation of how future legal operations will happen. Understanding how your ALSP partner functions is a critical part of those legal operations and will reduce the risk of surprises later on.
So do your homework!
In the meantime, if you are ready to incorporate a new tool into your existing accounting and practice management suite, or if you need to start from scratch, take a look at what AJS has to offer – we have the right combination of systems, resources and business partnerships to assist you with incorporating supportive legal technology into your practice. Effortlessly.
AJS is always here to help you, wherever and whenever possible!
(Sources used and to whom we owe thanks: One Legal; Bright Flag; Morae; Paragon and Inview).