Why ‘new law’ alternative legal services providers are so attractive (Part 1)

Transitioning from a legal to a commercial role was startling.

Experiencing firsthand how unbelievably frustrating dealing with external lawyers can be has been my biggest epiphany so far. I don’t think there’s anything fundamentally wrong with ‘old law’. But every engagement with external lawyers comes across as a calculated attempt to squeeze fees from an already tapped-out client. It happens everywhere. And surprisingly lawyers just don’t seem to notice. I didn’t at the time.

In this part we argue that growing dissatisfaction with the resourcing of matters, leverage and how total legal costs are estimated is driving clients towards ‘new law’. In Part 2, we suggest that misconceived notions of good client service are also significant push-factors towards alternative legal services providers.

It’s the little things

While there are many issues ‘old law’ firms seem to struggle with, most of the hassles revolve around leverage and the way matters are being resourced:

1.  Improper, or unnecessary, senior lawyer involvement

Despite your irrational self-confidence and superiority complexes, it’s obvious when senior lawyers are unprepared. They’re not across any documents, struggle with the basic factual background and usually get names or dates incorrect – sometimes even the client’s name. And meetings or calls like this nearly always end with the client having to reconfirm the written instructions they’ve already given.

Getting billed for useless phonecalls and meetings like that hurt. But the worst thing is being billed for graduate or junior lawyer there with you, or hiding on the call unannounced. I can guarantee the junior was thoroughly prepared for the meeting. And as it’s the most exciting thing they’ve done all week, they’ve usually started researching an answer too. Just skip the call. Frankly, I’d prefer the junior to be running the matter. Besides, firms will soon need to start finding different ways of training their junior lawyers. This might be a good place to start.

2.  Reinventing the wheel

I don’t mean failing to use a precedent which is, itself, unforgivable. It’s related to the first issue. Stop wasting time rewriting a junior lawyer’s work product for stylistic reasons. Being billed for writing the same advice differently is a terrible waste. Besides, if it’s completely wrong, insert a not and move on – or get the junior to rewrite it themselves. Junior lawyers can’t write these days? There’s an app for that.

3.  Hiding the junior

Many partners seem to forget they send itemised bills broken down by timekeeper. Junior lawyers do have something to contribute. Either actively involve them or don’t involve them at all. And don’t try to pass their work off as your own. Any document’s metadata will reveal who really wrote that advice. Do you know what your metadata can reveal?

4.  Terrible fee estimates

Cost overruns typically get explained away as being caused by the unpredictable nature of legal services. Clients, charged by the hour, bear the risk of this unforeseen additional work. Better technology, greater risk appetite and lower overall costs means new law start-ups are able to offer a superior value proposition. Does your firm still rely upon the crystal ball approach for estimating alternative fee arrangements?

‘New law’ promises to fix what’s broken

This behaviour, and the perverse conflicts time-based billing enables, is creating dissatisfaction with the status quo. New law start-ups are offering a solution to the problems many lawyers don’t think exist or think can’t be fixed. And you can’t fix a problem that you don’t know you have.

Flexible legal resourcing solutions can provide contract lawyers at fractions above cost price – not multiples. Low-cost outsourced document review erodes much of the work junior lawyers once completed at outrageous hourly rates. Even simple innovations are even beginning to automate formerly labour intensive matters, saving thousands. 

These solutions don’t rely upon billable hours, leverage or recoverability metrics. They represent an entirely new model of law. That’s why alternative legal services providers are so attractive.

It’s only a matter of time before the most conservative clients begin to flirt with alternative legal services providers. That same dissatisfaction with the status quo is driving many towards (surprisingly successful) alternative political causes – our legal renaissance has just begun.

Further Reading

Look out for Part 2, where we discuss new law's advantages over old law's perennial over-promising and under-delivering. In the interim, there’s a range of other excellent sources relevant to how 'old law' can adapt to the changed legal paradigm:

Understanding the 'new law' threat

Marketing like 'new law'