Finding the Right Balance: Navigating Automation, Outsourcing, and In-House Legal Work

15 Jun 2023
Meeting, collaboration

In the ever-changing landscape of legal resourcing, the traditional options of assigning tasks to in-house teams or outsourcing to law firms are being challenged. With the emergence of Legal Process Outsourcing (LPOs) and Alternative Legal Service Providers (ALSPs), as well as the ongoing impact of technology, the legal ecosystem is undergoing a transformation.

The question arises: how do we find the optimal mix of automation, outsourcing, and in-house work?

Here are some steps that may help with attaining that balance:


  • What needs to be outsourced?

To determine the best approach, it is crucial to carefully consider how legal work is sourced.

Understanding which tasks can be outsourced to ALSPs and integrating the right technology will provide clarity on the remaining workload for corporate teams and collaborating law firms.

In-house legal teams face certain friction points, including the lack of resources to support process work and the realization that data alone is not enough without skilled professionals to analyse it. It is essential to extract value from data and leverage it for informed decision-making.

  • How to resource a matter

When deciding how to resource a legal matter, several factors come into play. Considerations such as team capacity, geographic location, risk assessment, budget, strategic importance of the work, and complexity of the tasks must be weighed. Global companies, for example, may need to outsource due to the absence of internal counsel in certain regions. Classifying matters based on risk or strategic importance in a matter management system can provide leaders with better visibility and help them explore available options.

Budget concerns vary depending on the stakes involved in litigation. Focused conversations with service providers at the outset of a matter are crucial to arriving at an accurate budget or estimate. Transparency and ongoing communication regarding spend against the matter budget are vital for both sides.

Long-term strategic resourcing can be informed by capacity and spending reporting. Analysing spend data by matter type can identify areas where internal resourcing might be more effective, leading to a fact-based business case for building a stronger legal team.

  • Managing a panel

Managing a panel of law firms and alternative legal service providers is a significant task for legal teams. Evaluating panel performance requires a combination of objective data points, such as average cost per matter, blended rates, matter duration, and the quality of legal service delivery.

Specific dashboards can provide insights into hourly rates, staffing leverage, budget management, invoice adjustments, alternative fee arrangements (AFAs), and qualitative performance ratings.

Holding panel summits can also foster relationships, set expectations, and facilitate collaboration.

  • Using Alternative Fee Arrangements (AFAs)

Regarding AFAs, they are commonly used by corporate legal teams, providing benefits in terms of accountability and contextualizing work. While data-driven decision-making is on the rise, AFAs are seen as complementary to the hourly billing model rather than a threat.

  • Automate Legal Processes

Automation is a recurring topic in the legal ecosystem. Areas such as e-discovery, communication, and robotic process automation (RPA) have seen successful implementation. Highly repetitive tasks, like non-disclosure agreements (NDAs), are prime candidates for automation.

By removing manual and non-core work, legal teams can improve processes and free up time for lawyers to focus on their core responsibilities. Automation can also enhance spend and matter reporting, allowing for more efficient allocation of resources.

It is very important to find the right balance between automation, ALSPs, and human expertise.

Data-driven decision-making, along with the utilization of technology, will continue to shape the legal landscape. However, considerations based on the scale and industry of legal teams will remain. Ultimately, the focus is on ensuring that the right work is carried out by the right individuals or technology.

Interested in finding out more about how legal teams are using technology to automate legal ops and focus on their resourcing plan? Reach out to get a consultation.

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