Managed legal services are becoming an increasingly attractive model for in-house legal teams. Getting a managed legal services project off the ground requires an initial investment in designing and establishing the right type of legal infrastructure. Setting a managed legal service up for success is about considering:

  1. what technology is required;
  2. how legal expertise will be applied; and
  3. why new processes are needed.

1. Focus on the Value-Add of Technology

The managed legal services model recognises – and capitalises upon – technology as a value-adding tool. However, a tech-driven approach to delivering legal services has to be about more than just the label. It’s not enough to throw technology at a legal problem if it doesn’t actually streamline the process. Rather, we have to apply technology in a way that:

  • effectively addresses a legal need; and
  • increases efficiencies throughout a legal project.

What Role Does Document Automation Play?

There’s a temptation to wave the ‘document automation’ flag at the first sign of a task involving repetition. This is even more pronounced when there’s a large volume of documents in play. When setting up a managed legal service, it helps to take a moment to consider questions like:

  • How is automation going to fit into the overall workflow?
  • Will it assist, or detract from, your end-goal?
  • Will it make the project easier for your legal and business teams?

The answers to these questions are useful, because they allow us to properly allocate resources. Setting up technology for legal tasks requires an initial investment, both from:

  • developers (building the technology); and
  • lawyers (deconstructing the legal task into the specifications for a tech build).

For example, say you need to prepare a high volume of contracts. These contracts typically require significant negotiation. Therefore, consider whether the best approach is to:

  • automate the contracts on their own (with standard terms); or
  • develop a clause library.

A clause library captures pre-approved amendments to clauses in a single repository. You can then insert these pre-approved clauses into documents as needed. In making this assessment, consider whether you will seek assistance with legal negotiations or keep this in-house.

A clause library will require investment from the company. Further, the company needs to provide direction around what amendments are commercially acceptable. If this investment is forthcoming, the tech resources you need to make it happen will pay off.

If the key pain points relate to the negotiation process, the managed legal service provider’s solution should focus on managing amendments, not just populating standard templates.

Desirable vs Essential

When it comes to technology and delivering a project on time, you may have to make a trade-off between what’s desirable and what’s essential.

Let’s say a transaction involving the generation of a large volume of contracts is particularly time-sensitive and the tech options are:

  1. building a document automation platform that, with the click of a button, will produce a contract directly for you; or
  2. having the managed legal services provider automate the documents as part of their internal workflow (rather than a client-facing platform) and providing the final documents to the other side.

Option A has all the bells and whistles but would blow out deadlines. Option B offers the same efficiencies in document production. However, it also allows the managed legal services provider to maintain oversight of the process, from drafting through to issuing the documents.

If your end-goal is about guaranteeing the documents are issued to the other parties on time, rather than how these documents are produced, Option B makes the most sense. Option A is certainly desirable, but may be better for a longer-term project.

2. Leverage the Strengths of Lawyers

To be effective, a managed legal service needs to incorporate legal expertise. The best managed legal services involve experienced lawyers at specific touch points throughout the process. This way, both you and the service provider can be sure that the work is legally accurate.

This is not to say that you need lawyers at every point of a managed legal service. Doing so is unlikely to be efficient or cost-effective. Instead, involving lawyers unnecessarily at every stage would edge closer to traditional models of lawyering, where large-scale transactions are labour intensive and often driven by many late nights for the lawyers on the team.

Identify Areas Where You Cannot Replace Lawyers

To ensure that you maintain efficiencies, identify areas where the skills of a lawyer cannot – and should not – be replaced (either by technology or non-legal team members). Part of setting up a managed legal services project involves asking: where does the legal team add the most value?

Take, for example, a company that approaches a managed legal services provider to facilitate a significant transformation of their business model. The company explains:

  • their objectives; and
  • the proposed strategy (which the company has approved internally following legal advice and a comprehensive due diligence process).

While setting up the project, there may be tweaks in the company’s strategy. These tweaks could give rise to questions about whether the initial objectives are still feasible. A lawyer can provide targeted advice and solutions for removing any legal roadblocks, which feeds into overall efficiencies. In this way, a lawyer can straddle the advantages offered by a managed legal services model and the advantages of the advisory work typically completed by external law firms. The best providers of managed legal services are those that are able to:

  • adapt to your changing circumstances; and
  • offer up legal support which may be ancillary to, but necessary for, the completion of the project.

If you require an answer to a legal question in order to confidently proceed with a project, the managed legal services provider should be able to draw upon a curated team of legal specialists to offer that expert advice.

Lawyers Are Only One Piece of the Puzzle

On the other hand, let’s say you regularly issue cover letters for a set of contracts. In order to produce these letters at a high volume, non-lawyers (such as those with a communications background) could draft the templates. Lawyers could then sense-check them for legal issues and the tech team could automate them. In this scenario, lawyers’ time is better spent analysing legal issues and drafting the contracts that sit behind these cover letters.

Law firms that also provide managed legal services are able to leverage their legal talent, deploying their experienced lawyers (as needed) to managed legal services. This is particularly helpful where a particular transaction or project may cross practice areas.

While some managed service providers (particularly those that focus primarily on technological solutions) may only produce output as their clients direct, lawyers are able to offer advice on issues that crop up along the way.

3. Don’t Just Ask Questions … Test and Challenge the Answers

A managed legal services client will have their end-goals in mind and an idea of how to get there. To really add value, delivering the project should be about more than simply understanding instructions and regurgitating them into the specified format. As a managed legal services model combines legal and consulting services, it’s about taking instructions as well as shaping instructions.

Perhaps a company has an entrenched practice of five people signing a hard copy form to record their approval of recurring (but non-controversial) decisions. In consulting with the client, a managed legal services provider should consider the key part of this process: making sure every person records their sign-off on the same piece of physical paper or actually achieving sign-off? If it’s just about making sure there is sign-off, it becomes clear that the current process is convoluted.

Once you’re able to distil the internal process to its essential rationale, you can strip away precedents borne out of a ‘business-as-usual’ way of thinking and suggest alternative processes that get the job done effectively – but more efficiently. In this example, the alternative could be tracking decisions in an online portal that also captures the details of the documents that you have approved. In doing so, you are still maintaining a record around decision-making (to ensure transparency) but the employees in question have less paperwork.

Key Takeaways

The initial investment in setting up a project and customising the managed legal service is invaluable for ensuring a smooth delivery. The right combination of legal expertise, technology and process design, when tailored to the legal task at hand, can transform the delivery of legal services for in-house teams.

Finding the perfect balance involves considering where to best apply the strengths of developers and lawyers, delving deep into the inner workings of a company to understand their needs and pain-points and emerging with a multi-layered solution.

Amritha Thiyagarajan
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