Cost-Saving Strategies for In-House Legal Departments: ALSPs, Legal Marketplaces and Process Tools - Priori

Cost-Saving Strategies for In-House Legal Departments: ALSPs, Legal Marketplaces and Process Tools


 23-03-13 Cost Savings Blog Post 3

Learn more about best practices for ALSPs, marketplaces and legal technology in Part 3 of this three-part series on cost savings

If you’re looking for ways to get a handle on your legal spend, you’re in the right place. With this three-part article series, we’re covering key cost-saving strategies that legal departments should be looking at to protect the bottom line. During our recent webinar, Basha Rubin, Co-Founder and CEO at Priori, Stephanie Wilkins, Editor-in-Chief at Legaltech News, and Carol Hopperton, Legal Chief of Staff at Vonage, discussed these strategies and provided insight into their potential impact for members of in-house legal departments, including in-house lawyers and legal operations professionals. In this final article you’ll learn about best practices for using alternative legal services providers (ALSPs), legal marketplaces and process, automation and workflow tools. (You can also read Part 1 on staffing and work assessment and Part 2 on panel management.)

ALSPs and Marketplaces

This strategy for cost savings is likely familiar to most in-house legal teams. The term ALSP (also “new law company”) is a catch-all for a “business that provides legal-related services as an alternative to a traditional law firm.” It can include everything from staffing companies to offshoring large scale projects to e-discovery providers. Some of the most common services offered by ALSPs include: 

  • Staffing, leave and headcount coverage

  • Due diligence

  • Document review

  • Compliance

  • Legal research

  • Contract management

ALSPs are commonplace in corporate legal departments, with one report showing that more than 70% of departments use them. However, a 2022 Bloomberg report also found that most departments are only outsourcing between 1-19% of their work to ALSPs. So while they are widely used, their full potential is not being tapped into by legal departments. It may be time to reframe the idea of ALSPs as being “alternatives” because of how fundamental the benefits, like cost savings and increased efficiency, are to the legal departments that use them.

The best way to take advantage of ALSPs is to include them in work assessments, as described in Part 1 of this series, which discussed Staffing and Work Assessment. ALSPs often offer a perfect fit for work that is lower to medium risk and/or lower to medium complexity, temporary or project-based and high volume and/or repeatable. These types of tasks that you’re spending in-house hours on or sending out to Big Law firms can be moved to ALSPs for cost savings while maintaining work. 

Another option that many legal departments are turning to is the Priori Marketplace. Our Marketplace includes ALSPs in its platform, providing access to these “alternative” providers directly alongside more traditional providers. Priori Marketplace’s technology uses data to connect legal departments with legal providers (and, as mentioned, this can include solo practitioners, small or boutique firms, larger firms and ALSPs). 

Using a technology platform to make these connections allows legal teams to find, hire and work with legal providers faster and more efficiently. Cost saving is one of the most common reasons legal departments look to legal marketplaces to achieve outside counsel goals. Some of the other common use cases include: finding local counsel for matters in specific jurisdictions, meeting diversity targets, receiving niche expertise on less common topics, overflow support to relieve pressure on in-house counsel and traditional staffing engagements such as parental, disability or vacation leave. 

Process, Automation and Workflow Tools

Every legal department is using technology to get work done faster, even if it’s something as basic as word processing. And while most, if not all, legal departments are far beyond that low bar, there still remains a technology gap in the legal industry. 

For example, according to Association of Corporate Counsel’s 2021 Legal Technology Report, less than half (47.2%) of legal departments are using e-billing technology and only just over half (50.6%) are using contract management technology, which Rubin explains are “the basics of legal technology—they have been around for a while and they help with straightforward, important, daily processes.” If your legal department isn’t taking advantage of either of these, that is a good opportunity to increase efficiency. Some other legal technology options legal departments should be aware of include: 

  • Contract lifecycle management (CLM)

  • Legal research

  • Matter management

  • E-billing

  • Document repository

  • Legal holds and litigation support

  • eDiscovery and records management

  • Process/workflow management

  • Data collection/processing

  • eSignature

  • Intellectual property management

For many of these technologies, the adoption rate runs the gamut, and that is probably for good reason: Not every solution is going to have an impact on every company. “When I talk to legal teams who have had bad experiences implementing technology products, it’s often for two reasons,” says Rubin. “First, they weren’t thinking about a narrowly tailored solution to a problem that they actually need to fix and can measure the results of. Second, they wanted something that they could ‘set and forget,’ and that is simply not the way any legal technology currently functions.” 

So if you’re looking to promote legal technology in your organization, what can you do to make sure you have a good experience and it produces results? Here are some specific actions you can take: 

  • Identify the problem and find a tailored solution. Don’t just implement the newest and shiniest tool because it’s exciting; the technology needs to solve a concrete problem that impacts your department. 

  • Use data to guide your decisions. Understand where your attorneys are spending time and where you’re spending money. What are the pain points and what are potential solutions? Data can give you useful insight into these questions. 

  • Create accountability. Legal technology like e-billing or RFP tools help you improve reporting and better track key performance indicators (KPIs), which not only have cost saving benefits but also can enhance your data measurement efforts. 

Whether you’re looking internally to improve your use of legal technology or externally for resourcing cost savings through ALSPs or legal marketplaces, the opportunities available to legal departments are myriad. However, while making these decisions, it’s important to remember that change management is its own challenge. When implementing these strategies, the most successful departments take careful stock of their data and prioritize and measure the impact of all initiatives. When you do this, you not only increase your likelihood of success, but you also make it easier to make the business case for your decisions and, most importantly, show cost savings. 

Interested in how Priori Marketplace or our outside counsel decision-making platform, Scout, can play a role in your cost-saving strategies? Start a free RFP on Marketplace today and receive a curated list of providers with no obligations, or schedule a demo of Scout.

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