June 16, 2021

contracts business strategy partnering

In this Corporate Counsel article, some participants in a recent webinar commented on two reasons it can be easier to work with your current law firm rather than bring on an ALSP or law company: first, relationships already exist between the people at your organisation and the firm, and, second, getting an ALSP or law company up to speed requires a lot of time and effort. Further, there is a belief amongst many law departments that a law company is suitable only for short-term “overflow support” need rather than being an entity with whom to develop a long term relationship and use on an ongoing basis.

I have a different take on these points. It seems to me a few issues bear emphasis:

• As far as deciding to continue to work with a particular law firm simply because the people there who work with you are “known quantities,” remember that being dependent on a specific individual means there is no resiliency. After all, these people are human beings – they get ill, go on vacation, and transition to other opportunities. Contrast this with a managed services relationship with a law company: if set up the right way, working with a law company can minimise these risks. Specifically, if you and the law company document the work process, that ensures others can quickly get up to speed and fill in should the person “on point” for handling a matter become unavailable. Depending on how your relationship with the law company develops, it’s entirely possible this person is already known to you, but the risks outlined above are minimised.
• Getting a law company up to speed is not as time- and labour-intensive as you might imagine. A core activity of law companies is gathering existing artefacts, learning from experience executing transactions, gathering data and using it to extrapolate process design and process improvements, and leveraging technology to capture things like deviations (from templates) in contracts provisions during the negotiation process. Simply put, law companies are built to “cycle up” quickly on new projects.
• If you use a law company simply for “overflow support” without a de minimus accompanying investment in establishing a process, then any knowledge attained by the law company dissipates after the acute need is addressed and you stand down the law company resources. This may be fine, as long as you are ok with the status quo involving a mad scramble for staff every time there is a spike in work. If a law company manages routine contracting on an ongoing basis, then it assumes responsibility for handling any peaks and valleys in demand, which allows your law department to focus on strategic work. In this scenario, law companies become a strategic asset, not merely overflow support.