March 19, 2024

flexible resources flexible resourcing Flexible legal staffing

In the ever-changing legal landscape, and with law departments’ and law firms’ plight in having to boost efficiency and cost-effectiveness, there comes the question of when to lean on managed service support vs. alternative legal resources providers to ‘get the job done’.

Choosing the right option begins with understanding the difference in services, solutions, and related cost implications of each, in the context of four key considerations:

Flexibility vs. Cost Predictability: the level of control and influence the business needs or wants to reallocate resources and readjust staffing levels at short notice and the predictability of the workload levels and anticipated duration of the support.

Scalability: the likelihood of the business needing to scale the support during the term of the engagement.

Expertise and Quality Control: the extent to which the provider leverages its own processes, people, and technology to efficiently deliver high-quality work versus providing specific legal professionals whom the customer manages and supervises to ensure quality and achieve efficiency.

Risk Management: the degree to which a provider’s risk management framework aligns with the customer’s objectives and regulatory requirements. A key consideration here can also be where (i.e, on- or off-shore) the work is done (which can directly impact cost).

How do Managed Legal Service Providers (MLSPs) and Alternative Legal Resources Providers (ALRPs) offering flexible resourcing stack up as far as those four considerations?

Managed Legal Services Providers

Managed legal services involve outsourcing various legal tasks to a dedicated provider where a sustained requirement has been identified and the MLSP therefore typically operating under longer-term contracts. The chosen provider will supervise the work and assume responsibility for all the outputs and deliverables, with the organisation retaining control over the operations depending on whether they choose to remain insourced or in-house.

MLSPs can provide technology-driven solutions and apply standardised proprietary processes to streamline workflows and enhance efficiency.

For organisations choosing the MLSP option, the output is the priority and the specific identity of the Talent undertaking the work is not critical. The tasks are ‘outsourced’, and so the Customer is not looking to play a direct role in selecting the person/people. The Customer who chooses an MLSP is not looking for involvement as far as who performs the role, recognising that the provider may swap out the Talent at any time while remaining focused on the tasks are undertaken at the levels set out in the SOW.

SLA / KPIs are defined for all work within the SOW so that it is clear what meets the service standards (and typically the Customer would not pay below the service standard and/or the MLSP would need to rework in these instances). This can offer reassurance around quality of service with clear processes for remediation and cost if the work is considered suboptimal (a highly unlikely event!). The tasks within the scope of the Managed Services are pre-agreed and generally require a change-order to change them.

The cost structure of MLSPs typically involves fixed, volume-based or by reference to output pricing models. Organisations can pay a predetermined fee for the services rendered, which can provide cost predictability and scalability. Selecting an MLSP with previous expertise in this area will minimise/eliminate any setup costs that others require. The duration of the contractual commitments that the MLSP requires vs the budget for investment also should be considered.

Using Interim Legal Professionals from Alternative Legal Resources Providers (ALRPs)

Engaging interim legal professionals enables a flexible and on-demand approach to staffing legal projects and other interim requirements. These professionals range from senior attorneys to paralegals and document reviewers available for assignments to address specific needs, such as temporary spikes in workload, special projects, or interim staffing gaps (e.g., to cover medical or parental leave, etc.). A key consideration in selecting an ALRP is the profile of the talent pool it maintains and the extent to which it includes experienced legal professionals deployable as needed.

The Customer can play a greater role and influence over who is undertaking the work in the ALRP scenario, including interviewing and selecting talent. For short-notice requests and time-sensitive projects that require high-volume resources (such as large document reviews), Customers may prefer to receive named individuals (rather than receive specific CVs and undertake interviews). This is particularly effective for short notice requests, where the Customer relies on the knowledge and expertise of their resources supplier in shortlisting only the most suitably qualified and available candidates. With seconded talent from an ALRP, the customer performs supervision and management directly. The tasks talent undertakes can change every day, with no notice, as long as they are within the broad in-scope duties in the SOW. The customer directs all aspects of ‘how’ talent performs work. If there are performance issues, the SOW will include details on remediation, rebate, Talent replacement procedures and notice periods.

The cost structure of engaging interim legal professionals tends to be more variable given it is talent/skill specific and can be affected by supply/demand, market conditions, the project itself and the work to be done. Customers pay for the services of these professionals on an hourly, daily, or project basis, allowing for greater flexibility and cost control.

Returning now to the earlier four considerations, a clearer comparison between solutions emerges:

Flexibility vs. Predictability: MLSPs can offer predictability in terms of costs and align well with a sustained and longer-term prediction of workload.

ALRPs, on the other hand, provide significant flexibility in staffing at very short notice, onsite or offsite, as and when the need arises, particularly where workload can be sporadic. Cost control and transparency for this short-term interim support can also be achieved through agreeing to specific hourly/daily rates and duration for engaged interim legal professionals. Scaling up or down (including at a project’s end) at very short notice will result in more variable costs unless there is a specific budget agreed upfront.

An important consideration is the cost relative to the needs of the business as the services and solutions are very different. ALRP hourly/daily rates may be higher compared to those of an MLSP as a ‘like for like.’ However, ALRPs allow customers to leverage and direct specific interim professionals, or Talent with a specific skill set not available in their existing team on a defined needs basis and switched on or off– particularly effective where workload levels are less predictable and short term in nature.

The MLSPs’ offerings are an alternative cost-effective solution given the overhead and labour savings that comes with an outsourcing model (including cost of hiring teams, training, large scale-device procurement and so on).

Scalability: Managed services can scale resources up or down based on contractual agreements relative to the support required. MLSPs that offer a global solution can support multiple time zones and offer ‘follow the sun,’ round-the-clock support.

ALRPs can quickly adjust the size and breadth of interim legal support, often with the Talent landing in role within hours (on/offsite), using (often pre-agreed) specific Statements of Work (SOW).

Expertise and Quality Control: MLSPs can deliver high-quality and efficient outputs by leveraging fine-tuned processes driven by experts. They enable organisations to access and benefit from leading technology solutions without having to make significant financial sacrifices. Bespoke and regular reporting with a clear audit trail is a modus operandi. Additionally, remote monitoring can be carried out to proactively identify risks and mitigate issues ahead of time.

ALRPs offer the specific expertise of individual legal professionals, reassuringly pre-vetted and background-checked, with direct and relevant experience, and appointed, supervised, and managed directly by the Customer. Law organisations and law firms should weigh their priorities regarding quality and specialisation when choosing between MLSPs and ALRPs.

Risk Management: Both MLSPs and ALRPs can help mitigate risks associated with legal work, such as compliance and data security. Law organisations should evaluate the risk management frameworks of potential individual providers to ensure alignment with the objectives and regulatory requirements in question. Consideration to where the legal work is done can open up wider options for offshoring with direct impact on cost, offering broader, cost-effective strategies.

Managed Service Providers can provide comprehensive security solutions, including robust network monitoring and disaster recovery services. They can also assist in achieving and upholding compliance with data protection regulations. It is important to establish a clear escalation path with your MLSP should the need arise.

As with many questions in the legal field, when it comes to whether to select a managed legal services provider or instead engage interim legal professionals from an alternative legal resources provider, the answer depends on the business needs at issue. The right choice hinges on a customer’s specific priorities, budget, and risk tolerance. By carefully assessing these structural variances and cost implications (which is distinct from cost itself), law departments and law firms alike can optimise their legal support strategies to achieve efficiency, agility, and value in today’s competitive legal marketplace.