The big bang for suppliers of alternative legal services The present regulatory and legal climate is burdensome. General counsel and their legal teams are under growing pressure to decrease legal expenditure while at the same time providing more compliance with the law and regulations. These conflicting requirements are unsustainable and the tipping point in 2018 could be seen where GCs are increasingly turning to alternative legal service delivery systems to satisfy these requirements. There are many trends and reasons behind the pressures faced by domestic legal tasks. We live in an era of disturbance on a macro geopolitical and economic level. Seismic and unexpected events such as Brexit and the US presidential election, fast progress and breakthroughs in important techniques (such as artificial intelligence), basic changes in worldwide financial strength and possibilities, and demographic and social change all contribute to the ever-changing and progressively confusing legal and regulatory landscape. Among others, these variables are the root cause of some of the main problems that GCs face in 2018 and beyond.
Increasing regulatory and compliance burdens
The number one challenge for many GCs is how to deal with the important and increasing regulatory and enforcement burden. 2018 promises to be a fascinating and, in many respects, crucial period for organizations in the United Kingdom and around the world that have been struggling for some moment to adapt their business correctly to certain important regulatory requirements. Changes (from GDPR and Solvency II to the Paris Climate Change Agreement regulations and the unknown regulatory changes resulting from the Brexit Agreement). In many cases, regulators are given the power to impose unprecedented rates of penalties and other serious sanctions under the appropriate legislation and regulations, Each organization must take seriously the consequences of failure to implement adequate systems and processes to guarantee adherence
Managing the hazards connected with technological change
On the one side, technological progress and breakthroughs enable companies to function faster and more effectively. Technology, however, also implies extra hazards to handle landing inevitably on the GC's desk and their legal teams with such a burden. Cutting edge technology implies adding cyber security and privacy hazards and increasing global legislative and enforcement commitments that are more complicated and complicated. If it's not already, it'll be a thing of the past very shortly. The billable hour has been continuously substituted by discounted, fixed and contingent charges. However, even strongly discounted and/or contingent charges are not yet adequate in the present setting for in-house legal teams to deliver on time and on budget their legal, regulatory and enforcement commitments.
This severe budgetary pressure has pushed GCs and their teams to look into even more innovative and cost-effective alternatives and into the weapons of alternative legal service suppliers (' ALSPs '). ALSPs employ a mix of technology, outsourcing and versatile staffing solutions to offer a variety of services including large-scale document review, contract management, support for legislative inquiry and litigation, discovery and electronic discovery, contract attorneys and staffing, legal research and IP portfolio management.
The ALSPs market is now adequately created to give GCs greater confidence by using ALSPs as a matter of course for the performance of certain duties. There is a mature and trusted legal contractor market that GCs will use to assist when extra in-house resources are needed (e.g. expanded team members absence, Abnormal spikes in workload and/or support for particular initiatives (e.g. M&A or regulatory or litigation)). GCs are also looking at outsourced managed legal service models to eliminate additional costs from procedures such as high volume standardized contract job. Such managed legal services are also using fresh techniques progressively to add additional efficiencies and cost savings.
Is 2018 a change time?
For some moment, the change from billable hour to fixed, discounted and contingent charges and to alternatives for ALSPs has been in train. The pace has been constant up to now and the progress has been gradual. The weight of the regulatory burden and the pace of technological progress will not decline in the near future. As a consequence, it appears set to continue the requirements on GCs and their legal teams to produce even more for even less. This all serves as a powerful indication that the trend towards growing use of ALSPs for certain duties and support will continue and maybe it will only take one more Brexit-like macro-political or economic shock to trigger a' big-bang' time to use ALSPs in 2018.
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