There’s A New World Coming
Today’s release of the 2018 Blickstein Group Law Department Operations Survey Report reveals law departments are taking advantage of #newlaw options,
Since the inception of corporate law departments, in-house counsel have not had a lot of options for getting legal work done. There were only two ways: in-house or at a law firm. It was a duopoly.
That model, however, has changed and corporate law departments now have new ways to accomplish legal work, increase efficiencies, and lower costs. Among the options: alternative legal service providers (ALSPs), offshore legal process outsources (LPOs), use of automation and self-service legal programs, and even artificial intelligence-based predictability tools that reduce risk, obviating the need for some legal work altogether.
Use of all these methods are increasing, according to the 2018 Blickstein Group Law Department Operations Survey, published in collaboration with Consilio, which is out today.
“The legal services delivery model is now perceived as an ecosystem of providers,” said Robin Snasdell, managing director and group lead for law department management consulting at Consilio. “Now, who does the work is optimally the right resource at the right cost with the right credentials. It’s no longer necessarily about which law firm partner went to law school with in-house counsel. It’s a revolution of sorts.”
Most corporations’ legal work is still handled by law firms, and that is a sacred relationship that will continue. Yet, as the survey illustrates, LDO professionals are exploring, and often embracing, new developments and opportunities. In fact, almost 78 percent say they use ALSPs, most frequently for document review, contract review, due diligence, and contract drafting. This is probably the single best piece of evidence that the duopoly is breaking down.
This year’s survey also reflected a sizable jump in the use of offshore legal process outsourcers. Nearly 15 percent are working with offshore LPOs, a 40 percent jump from last year. And many of those who are not using LPOs are intrigued by the concept. Nearly a third of respondents now say they would at least consider offshore LPOs.
AI data mining and analytics represent two of the most significant developments to challenge the duopoly. Many law departments are intrigued by the possibilities of AI as a productivity tool. More than 10 percent are already using it to power self-service legal initiatives and contract assembly and to assist with legal and quasi-legal work such as due diligence, and more than a quarter) plan to in the future. Overall, nearly 53 percent of respondents said they believe most law departments will be using AI for legal-type work in the next three years.
These initiatives, however, are still quite immature. More than half of our respondents ranked their maturity in this area as a 2 or lower, on a 5-point scale. Fewer than 10 percent ranked themselves as mature, with fully automated, reporting system-based, automated distribution, distribution schedules, and stakeholders defined. So, there is a lot of room for growth in the use of advanced technology to get legal work done.
Survey respondents also see value in the use of AI and analytics as predictive tools and expect their use to will rise. Almost 10 percent employ them to make predictions about outcomes or other future events, and 23 percent plan to in the future. Good predictions about future events, of course, allows law departments to better stay in compliance and to extinguish legal issues before they explode. Avoiding legal work altogether is a better — and less expensive — option than doing it in-house or sending it to a law firm or getting it done any other way. And even though few law departments are currently using AI to predict future outcomes, 43 percent believe that most will be in the next three years.
What did the 2018 Law Department Operations Survey reveal? As LDO professionals have become more sophisticated, so have the tools and processes they use. While outside counsel will continue to be key partners for law departments, LDO professionals are exploring new, increasingly effective ways to do their jobs.
What else did the 2018 Law Department Operations Survey reveal? Download the brand new 36-page report here and find out today.
Brad Blickstein is principal of the Blickstein Group, a consultancy helping businesses serve corporate law departments and law firms. He also is publisher of the Annual Law Department Operations Survey, which for 10 years has provided the most comprehensive data and analysis on the Legal Ops function.
