Alties, or Alternative Legal Service Providers (ALSPs), is a term increasingly heard in the legal vernacular. It's become common knowledge that Alties can offer more cost-effective, automated legal services for particular areas of the law, but they are still new kids on the block and don't have the full trust of businesses yet.
Legal leaders are intrigued by the idea of engaging Alties - the notion of cutting costs and diversifying the advice they receive is appealing - but as with any new product, there's a hesitancy to commit. Ali Meredith, our resident ALSP guru, offers first-timers her top tips on how to engage an ALSP.
The first thing Meredith points out is that the pricing models of ALSPs are very different from traditional law firms. Some operate fixed-fee pricing structures, others offer subscription services, or perhaps both. Clients often complain about the billable hour and scrutinize their lawyer's invoice to ensure every minute paid for has been used effectively.
The irony of alternative pricing models is clients' hesitancy of them. People are creatures of habit and embracing a fixed fee or legal subscription requires an open mind. "Adapting to a different pricing model can be hard to get your head around, so I recommend having a very clear idea of what you want an ALSP to achieve when you engage them," says Meredith.
Having a clear idea of what you want the ALSP to achieve means it's possible to compare that scope to the billable hour fee for the same work and determine how the price stacks up.
A healthy dose of LinkedIn lurking is also on Meredith's advice list. She points out that when GCs consider moving from a law firm to an ALSP, they expect the same value. That value can usually be met, but it depends on who is doing your work. Check out the people your potential ALSP employs. Are they experienced? Are they specialists? Do they come from a reputable law firm?
"Get specific," says Meredith. "If you're a software company who has won a government contract, you want someone at the ALSP to have government experience."
It's people who make up a business, and it's important to make sure the ALSP can draw on a breadth and depth of experience.
A "proof of concept" is next on Meredith's list, and she advises to never go all-in when engaging a new partner. "Give them a piece of work, see how they do, and be prepared to invest more time than you perhaps would with your traditional law firm. If it's good work and you're happy with the result, you can grow that relationship."
A trial is essential if you're dealing with a subscription-based ALSP. Look at it like Netflix. You wouldn't sign up to a streaming service without a trial first.
Understanding that ALSPs are the new kids on the block will help when it comes to managing your expectations for your future relationship. "Expect them to be closer with you, more nimble and perhaps looser," says Meredith.
ALSPs are firms with a younger workforce, smaller client bases, and a big emphasis on relationships. You can expect them to invest in your business. Meredith attributes this to a different generation of lawyers and the lack of a top-tier law firm brand, meaning they need to work harder to gain client trust and respect.