July 12, 2022
Legal functions within organizations have become increasingly complex over the years, with substantial growth in required compliance measures. Organizations are finding it challenging to keep up with these changing requirements, particularly as legal teams grapple with managing costs. The expense of seeking help from external counsel can be prohibitive, and due to current economic conditions, General Counsels (GCs) are often tasked with doing more with fewer resources. While engaging external counsel entails high costs, increasing in-house legal staff results in a permanent rise in fixed costs. Both options have significant drawbacks. In this context, Legal Managed Solutions (LMS) present a promising alternative.
It is widely recognized that law firms and legal departments invest substantial resources in repetitive tasks, such as routine compliance, required filings, and updating operations in line with evolving laws. These tasks can negatively impact employee morale and productivity. GCs may consider LMS to handle these tasks and improve productivity.
The need for outsourcing LMS is also influenced by factors such as organizational expansion beyond geographical borders, increased compliance requirements, and high volume contractual relations. The economic slowdown post-COVID-19 has compelled law departments and firms globally to reduce costs. Using LMS for daily operations not only cuts costs but also optimizes internal and external resources, leading to improved deliverables and increased value creation. This, in turn, helps organizations retain and recruit top talent and focus on core tasks. Collaborating with tech-savvy LMS providers allows organizations to manage legal functions more effectively and streamline daily activities.
LMS can be utilized for:
According to a research conducted by E&Y, organizations using LMS are more cost-effective and confident about improving future efficiency. They are better prepared to respond to geopolitical and regulatory changes and have more capabilities within their departments. LMS also enhances talent retention.
LMS offers cost-effective solutions by leveraging technology to ensure quality deliverables and simplify legal department operations. Given the complexity of issues GCs must resolve, having a reliable team for managing tasks efficiently is crucial. Despite traditional notions, many progressive law departments now outsource LMS due to limited in-house capacity.
| Legal Outsourcing | Legal Managed Solutions (LMS) |
|---|---|
| Legal outsourcing often lacks confidence in quality deliverables. | LMS assures quality deliverables with a focus on reliability. |
| Solutions in legal outsourcing are typically imposed on the client. | LMS solutions are collaboratively created with the client. |
| Technology is not utilized in legal outsourcing. | LMS tasks are performed using high-end legal technology. |
| Legal outsourcing tends to have lower predictability and reliability, with higher fees. | LMS offers higher predictability, reliability, and reasonable fees. |
| Deliverables in legal outsourcing may be inconsistent, without assured Key Performance Indicators (KPIs). | LMS providers assure quality, consistency, and visibility with KPIs. |
Adapting to changes is crucial in today's rapidly evolving legislative landscape. The economic crisis has prompted GCs to reassess their sourcing needs, leading to an increased reliance on LMS. Managed Solutions have proven valuable in technology sectors and are now recognized as essential for GCs to perform their functions effectively.
We believe that LMS providers act as an extension of the organization, enabling a focus on high-quality deliverables. Outsourcing LMS is a strategic decision that offers long-term benefits. It is anticipated that progressive legal departments will increasingly opt for LMS to execute their legal functions efficiently.
