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The Innovation of Litigation.

Lessons from legal service companies (Part 1)

If you haven’t heard, law firms are losing clients to legal service companies. Why? Legal service companies are using innovative technologies and pricing schemes. Compare this to the survey in which 81 percent of clients responded that they saw little to no innovation inside their law firm and only 5 percent were satisfied with the service they received. So how do you compete? This three part piece takes a look at some of the qualities that your clients are looking for and the ways you can improve your litigation practice so that you not only keep your client base, but grow it.

We need to talk about Legal Service Companies. Why? Because Legal Service Companies are the traditional law firm’s competition, and if only the fittest survive, law firms will soon become a thing of the past– unless they adapt. This includes law firms in the litigation market.

What are Legal Service Companies?

It’s easier to explain that these companies, also referred to as NewLaw, are NOT law firms. Some Legal Service Companies offer niche services such as eDiscovery or data analytics that law firms (or large companies) outsource to them. Other Legal Service Companies include the Big Four or companies with profiles similar to the Big Four—entities with seemingly unlimited resources, established client relationships, and global presence, with law just being a fraction of their business. 

Big Law Business published an insightful post that called attention to the reemergence of the Big Four in the legal industry. The author stated that if these companies choose to use their resources to develop services utilizing tech and people in a different way than currently offered by Big Law, then they could dramatically change the complexion of legal service delivery. 

The Legal Service Company industry took the challenge and they are disrupting the legal market.

Legal Service Companies Are Already Taking Your Clients

On March 22, 2018, UnitedLex and General Electric announced a5 year exclusive contract in which UnitedLex will provide legal services, including litigation services, to GE. This came just over a year after GE had outsourced its tax services (including tax law matters) to PwC. In December, UnitedLex made a similar deal with DXC Technology, marking one of the largest outsourcing deals in the legal industry. Why these moves?

According to Bill Deckelman of DXC Technology, UnitedLex’s “combination of process improvement, enhanced technologies, insightful data analytics, and transparent financial management” were some of the qualities that attracted DXC Technology. For GE, the standard for service is value, which UnitedLex brings by offering total project cost guarantee. UnitedLex estimates that its services will save companies such as GE and DXC Technology 30 percent in legal expenses, which amounts to $40 to $50 million in savings for GE alone. 

Legal Service Companies Are Out Innovating Law Firms

Clients are seeking more innovation from their legal providers. So far, Legal Service Companies are proving themselves more innovative in the way they use technology, price their services, and train their employees. 

According to UnitedLex, the company is at least FIVE TIMES MORE invested in innovative technology than the AM100 average. Innovative technologies include the utilization of data analytics, artificial intelligence, eDiscovery, and project management software to lower routine costs. 

UnitedLex is also trending away from the billable hour. As mentioned above, it is leveraging its technology to make a total project cost guarantee. This alternative fee agreement provides its clients with certainty previously unknown in the legal industry with few exceptions. 

Innovation also includes the training of attorneys in skills outside of the law—for example, training attorneys to use UnitedLex’s technology suite proficiently.

Clients Are Noticing

And if you think clients aren’t noticing you are wrong. As reported by Artificial Lawyer, according to one survey, 27 percent of clients did not see any innovation in law firms. Of the 75 percent of clients who did see innovation? Two thirds of them didn’t see innovation in their primary firm. In another survey posted by Law.com, 81 percent of clients answered they saw little if any innovation inside their law firms.

Over the next couple of posts, we will discuss some of the ways you can innovate your litigation practice out of the Stone Age.

About Trial by Tech

Trial by Tech is a blog brought to you by Baylor Law’s Executive LL.M. in Litigation Management—the first program in the nation designed exclusively for lawyers who aspire to direct effective litigation strategy, control electronic discovery, leverage technology, manage a team, and lead their company’s or firm’s efforts to manage a high-volume, high-stakes docket.

Here, you will find focused discussions on the #innovation of litigation and the intersection of #legaltech and #litigation. If you like what you are reading, many of the posts are authored by experts from the LL.M. program. To learn more, click here.

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