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For years now in-house legal teams have been tasked with one all-consuming challenge – to do more with less.

To cope with the rising workloads and shrinking budgets, legal teams are being forced to get creative – and they’re turning to technology to power their efforts.

As a result, the level of interest in legal technology and legal software is huge, and it’s playing a central role in the growth plans of legal departments nationwide.

As for the tech-native alternative legal services providers (ALSPs) that have emerged on the market, you would think that business would be booming. Automating largescale, high-volume work is not just their speciality – it’s the basis of their entire business model.

But the rise of ALSPs is not as significant as it is often made out, says Dana Denis-Smith, CEO and Founder of alternative legal services provider Obelisk Support. “Alternative legal services providers don't have a huge percentage of the current legal market. For us, it's the start of the journey rather than the finish.”

So, what’s holding back in-house legal teams from taking advantage of the tech-solutions offered by ALSPs?

In-house legal teams spend most of their time putting out fires

Firefighting is one of the biggest challenges legal teams are up against right now says Nigel Rea, Service Development Director at legal services provider Lawyers on Demand (LoD).

“Your average in-house legal team has a huge number of fires that urgently need putting out. At the same time, there's a massive push towards digital transformation, which will require doing things differently.”

“The main challenge for in-house leaders is how on earth do I balance my team and my capacity between all the fires that I need to keep putting out and all of the strategic stuff that no one has time to do.”

However, alternative providers are perfectly equipped to help in-house legal teams do more, says Rea. “That's what we're constructed to do – take that pain off the legal department’s desks. At LOD we can support through legal operations, technology consulting and flexible resourcing.  Most importantly we understand the change management expertise needed to put it all together.”

Anup Kollanethu, UK Head of Legal Managed Services at Big Four accounting firm, EY, believes outsourcing to alternative providers will become the new norm.

“Most in-house teams have traditionally been used to working in a certain way; you either do the work yourself or you ask your panel firms to support you. Whereas, if you are in any other business function, you’re used to doing it a bit differently; you’re used to outsourcing scale stuff. More in-house teams are now starting to see how their peers within the business are operating and there is almost an acceptance they have to adapt and use a different approach.”

Read: Are the Big Four reshaping the future of legal services?

Legal teams need solutions to real problems

The pandemic has led to an uptick in technology adoption – and there’s no going back, says Denis-Smith.

“There's no way back from being more tech-enabled and there's no way back from saying “Actually, I can just get everybody on a Zoom call”, or “There’s a lot of automation opportunity within the Microsoft Suite.”

However, many in-house teams are struggling when choosing the right legal software or solutions for their business, she points out. “I think in-house teams can get overwhelmed by wanting to have all the bells and whistles, but in reality, things do not have to be that complicated. You can buy legal solutions that actually give you concrete answers and people are starting to understand that.”

In comparison to other sectors, the legal market is notoriously slow when it comes to tech adoption, but Rea believes the late adopter label often given to lawyers is a lazy way of framing the problem.

“Yes, there is a level of conservatism in legal professions. It's a profession driven around managing risk. As such, you're not going to have explosive early adoption of stuff in the same way you might have in other areas.”

“But I think the main challenge is, there's a lot of whizzy stuff out there that's searching for a problem, and that makes adoption really hard, because yes, it's great, but does it actually solve the problem lawyers are facing day-in, day-out?”

Rea believes legal teams have leapt on anything that has enabled easy transactions and easy movement of legal documentation throughout the pandemic.

“Primarily anything around signatures or getting stuff out the door, or the storage and digitisation of legal data, have seen huge levels of adoption from the legal community, and so too have communication tools like Microsoft Teams. That's because it’s tech that’s solved a problem, and these solutions will stick.”

Consumer-first legal services will dominate the market

Our expectations around effective communication are evolving. Take e-commerce brands like Amazon for example, that offer quick, streamlined and highly-personalised customer journeys – customers are kept up-to-date throughout every step of the journey and can track their orders in real-time.

The knock-on effect of this level of personalised communication is that everyone now expects it, everywhere, and legal services are no exception.

Just look at the level of interest in online portals for matter status updates, or interactive websites to generate legal documents, or chatbots to answer commonly asked questions.

Many in-house legal departments are adopting this approach by pushing self-service functionalities for routine work such as NDAs. However, in-house teams will and should come to expect the same level of service from their legal providers, says Denis-Smith.

“Right now, I don't think the legal sector is providing top quality services to in-house legal teams. ALSPs have brought a more consumer-first way of buying and servicing to the market, but I'm not sure law firms run themselves like this. More often than not, it seems like the partners come first.”

David Wilkins, Lester Kissel Professor of Law at Harvard Law School, says this customer-first approach is something the Big Four are excelling at.

“The Big Four can offer a far higher integration of technology, project management and process management; they employ a huge number of people across a huge range of specialties and they are way more global than even the most global law firm. This is why, for many kinds of issues that companies face, it’s a very attractive offering.”