There’s a reason why large companies turn to traditional law firms to help facilitate their most significant business transactions. With so much at stake, the most complex aspects of an agreement need to be managed by highly specialized experts.
But along with these bespoke, highly complicated matters come plenty of high-volume, routine legal documents, such as non-disclosure agreements (NDAs) and vendor contracts. Finding the right party to handle this work isn’t as clear as finding the right one for larger matters.
Law firms and internal resources are traditional, but imperfect solutions for effectively handling routine legal work, due to multiple factors such as turnaround time, attorney fees, and lack of expertise. There has to be a better way—and thanks to today’s technology, there is.
Traditional law firms are expensive
In the world of large transactions, traditional law firms are often the go-to solution for companies’ most challenging legal work. They serve as a safe option because they are trustworthy. To maintain client relationships, many of these firms take on routine legal work when they’re asked, even though it’s not their core competency. Thanks to their stellar reputations, no one worries that a firm like Kirkland & Ellis or Cravath will make errors on routine legal documents.
But having a traditional law firm handle routine legal work tends to be inefficient and expensive. While a traditional law firm may negotiate routine legal work for the sake of a client relationship, it’s not necessarily delegated to the attorney with the most specialized experience in that document type. Instead, it’s delegated to the attorney who has available bandwidth or an associate supporting the partner who manages that client. The turnaround time isn’t ideal because these resources are continually devoting a significant amount of time to other, higher priority work. Since the work is billed against the standard rate card, it can also incur a significant financial cost to the client.
The cost concern is significant for in-house counsel since 93 percent of legal departments note that controlling outside counsel costs is a key priority, according to Thomson Reuters. Another survey of in-house counsel found that participants spent an average of $4.2 million on legal services and attorney fees each year. The fees that companies accrue in sending routine legal work to traditional law firms run counter to their goal of cost containment.
Internal teams lack bandwidth
Some companies assign internal resources to high-volume legal work in lieu of sending it to a traditional law firm. This could include in-house counsel or even business resources such as deal team members. For both groups, routine legal work can take time and focus away from the core aspects of their jobs. Because handling routine legal work is additive to employees’ roles, it can limit the bandwidth to care for the work, which can pose a risk to the overall speed and efficiency of the process.
Additionally, when internal resources in a business function are tasked with negotiating routine agreements, they do so at a disadvantage because they don’t possess a formal legal education. And since their interests primarily lie in moving the deal forward quickly rather than mitigating risk, companies may find themselves with less-than-ideal negotiation outcomes.
The emerging option: legal tech
Over the past decade, a handful of players have pioneered the legal tech space. These innovators have capitalized on the rise of tech and software to find solutions for addressing multiple pain points in the legal process.
While the corporate law industry is risk-averse by nature when it comes to embracing new technologies (and rightfully so), engaging with the right legal tech solutions is no longer a gamble. The companies that have already adopted legal tech solutions are reaping the benefits and have a leg up on their competitors. Bringing legal tech into the equation often increases process efficiencies, lowers costs, and allows for better quality legal work.
InCloudCounsel is a legal technology company that has created an ideal solution for negotiating and managing routine legal work, combining cloud-based workflow and data management software with a virtual network of the world’s best solo practitioners. The result is a solution that’s uniquely high-quality, efficient, and cost-effective.
The attorneys working in our network possess expertise in specific document types such as NDAs, vendor agreements, and engagement letters. By focusing our solution on the routine legal work niche, we’re delivering high-quality work while helping clients achieve a 70% average cost savings compared to their prior outsourced solution and freeing up thousands of hours of internal resources’ time.
To learn more about our scalable, end-to-end solution for negotiating and managing your company’s routine legal work, contact our team today.