Blog Posts

Enterprise Legal Service Providers Are No Longer ‘Alternative’

A recent roundtable hosted by Forbes contributor and Legal Mosaic CEO Mark A. Cohen inspired reflection on how various circumstances are combining to put remarkable and urgent pressure on the traditional law firm model. Alternative legal service providers have been around for 20 years now, and it is time to stop calling them ‘alternative’. Enterprise legal service providers have taken control of a significant part of the legal market by redefining it, rather than waiting for permission.

It is surprising that it became cheaper for GCs to ‘make it themselves’ than buy from law firms, but building in-house capability enables greater change. The costs associated with in-house legal teams are fixed, and traditional lawyering can seem (perhaps unfairly) like a drag rather than an investment.

The benefits GCs derive in return are about more than financials—legal market digitisation reaps data that facilitates new insights for GCs. Rather than being a barrier in a corporate workflow, the legal team now informs the front end of the business, improves it, and adds value.

Substantial capital is flowing into enterprise legal service providers and accelerating change. For example, UnitedLex received a US $500 million investment from CVC Capital Partners in late 2018. It was already operating across 18 countries and serving 25% of Fortune Global 500 companies and is now using the money to invest in technology and growth—its structure allows its leadership to focus on long-term strategy rather than annual profit extraction. It is less about helping GCs do what they have always done more efficiently: It enables GCs to change how they approach their work, allowing them to retain focus on being a strategic adviser and drive enterprise legal solutions.

Business like UnitedLex do not separate their workforce into lawyers and nonlawyers in ways that betray exceptionalism and hierarchy. They are built on data scientists, technologists, design experts, customer insight experts, and—of course—lawyers who collaborate seamlessly to deliver cutting-edge client service. Without a legacy culture to overcome, enterprise firms encompass workforce diversity in every sense, allowing for so many distinct paths, unique skill sets, and knowledge bases underpinning creativity.

Their impact is drastically changing the legal marketplace, sparking natural innovation and alliances. We see Pinsent Mason, which calls itself a ‘professional services firm with law at its core’, as well as Ashurst’s partnering with UnitedLex to satisfy client demand and Bryan Cave Leighton Paisner’s BLCP Cubed service for high-volume work. Any one of UnitedLex, LOD, Axiom, or even the Big Four can illustrate this transformation, encouraging increasing numbers of law firms to evolve in response. Legal digitisation and enterprise solutions are dissolving the market’s artificial boundaries between traditional law firms and enterprise legal service providers: That is why these firms are no longer ‘alternative’.