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Alternatives to the traditional legal model are finally emerging. A managed legal service is a model that puts the client first and introduces:

  • transparency;
  • efficiency; and
  • technology at scale.

Managed services are already common practice in industries like IT, finance and marketing. However, legal teams are just starting to realise their value and potential in the context of legal processes.

What is a Managed Legal Service?

Managed services allow a business to utilise cutting edge technology, have access to skills and address issues related to cost, quality of service and risk, all without the need to carry an oversized internal team.

For example, managed services have taken off in IT because every large business needs high-quality IT support. However, every small IT department is a cost centre outside the company’s core expertise.

The same is true in legal departments and Australian businesses are starting to make the connection.

What Should I Use a Managed Legal Service For?

Managed legal services are a solution to high volume work that is time critical, cost sensitive and carries risk if it’s not performed accurately. This work requires the application of technology, larger capacity teams and highly efficient processes that in-house lawyers can’t provide and traditional law firms are yet to dream of.

A managed legal services provider designs, builds and implements process-driven systems that enable their team of lawyers to efficiently complete legal work. These efficiencies allow for cost reduction, cost transparency and reduced service times, all while retaining the business’ transparency and governance.

For example, an ASX50 company needed its franchise network audited, which meant balancing efficiency and quality. This was essential to achieve the goal: to pick up on, and action, breaches across the network. A managed legal service was the perfect solution to achieve that within a tight timeframe and at a reasonable cost.

Another example: A client needed 400 contracts reviewed and amended in two weeks. A traditional legal solution would involve all-nighters by a huge team of lawyers, both inefficient and extremely expensive. A managed legal services playbook streamlined the process and achieved transparency and efficiency at scale.

Why Should I Use a Managed Legal Service?

The main benefit of a managed legal service is all about where the incentive to deliver sits. Unusually for this industry, managed legal services place the incentive to reduce costs and improve efficiency on the provider, rather than the client.

In a traditional hourly billing model, the provider is incentivised to take longer and introduce complexity to drive up their bill. In contrast, in a managed legal service, the incentive is reversed. The provider commits to a fixed subscription cost for clearly agreed outcomes. Therefore, the incentive is on them to introduce the efficiencies required to deliver.

Managed legal services provide a way to move work to a lower-cost provider without increasing risk. Moving work from a global law firm to a smaller law firm can create cost savings of up to 50%. However, it also introduces the risk of a reduction in quality. However, moving from traditional providers to technology-enabled lawyers can lead to savings of 90%. Those lawyers work through redesigned processes, which actually improves consistency and quality.

Often, a client chooses a managed legal services provider for cost reasons. However, businesses quickly see additional benefits such as:

  • increased quality;
  • timeliness; and
  • transparency.

In-house lawyers come to depend upon the metrics that a managed legal service provides. These metrics enable them to monitor, measure and evaluate the large volume of legal work under their supervision. In-house teams also use these metrics to demonstrate that legal departments are making wise resourcing decisions.

How Does it Work?

Managed legal service providers are experts in process, technology and project management – as well providing the legal expertise necessary to deliver the project.

A managed legal service brings together:

  • a broad team of expert commercial lawyers, process engineers and technologists, allocating the right expert to the right part of the job;
  • design thinking to provide optimal process efficiency and to solve real needs for the “users” of legal services;
  • infrastructure such as playbooks and service level agreements that eliminate risk and improve consistency;
  • technology enablers like live dashboards and document automation;
  • data capture and reporting across all elements, allowing tracking of performance, risk management and identification of ways to improve the service; and
  • a continuous improvement approach, where areas of improvement are identified and those improvements are delivered back into the solution.

Managed legal services also change where the value of ongoing learning is retained, moving knowledge from individual lawyers to the underlying service infrastructure. This shift reduces the reliance on individual practitioners who could retire or move firms at any moment, which traditionally creates inefficiencies in a project as new lawyers get up to speed.

The structure of a managed legal service means the client has full visibility and governance of the solution. Additionally, they have a single point of contact through the managed service lead to the broader delivery team. This allows the client to retain strategic oversight without needing to be directly involved in day to day activities.

Key Takeaways

A managed legal service is a model of delivering legal services. It centres the client, giving them strategic control and cost certainty. Leveraging legal expertise, process design and technology not only improves efficiency, but gives the client real-time visibility and brings to life the rich data set held within any legal process.

Compared to a traditional model of tackling high-volume, high-stakes legal work, a managed legal service can offer up to 90% savings and improve consistency and accuracy, offering in-house teams a resourcing solution that doesn’t increase risk.

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