Peer to Peer Magazine

P E E R T O P E E R : I L T A ' S Q U A R T E R L Y M A G A Z I N E | F A L L 2 0 1 9 21 the industry. And, clearly, CLOC is at the heart of those changes. It has stayed intently focused on reducing spend. In the most recent survey of its members, CLOC members report having achieved a 24% rate of reduction in legal spend among large- and medium-sized companies since 2018. CLOC itself is growing rapidly and its influence is expanding across many industries. Its membership grew by 60% in 2018 alone. Worldwide, CLOC represents nearly 1,000 organizations, including 61% of the Fortune 100 and one third of the Fortune 500. The collective legal spending power of the organizations CLOC represents is $50 billion dollars. While law firms have been sleeping, other legal service providers have not. Certain CLOC members may have been successful in reducing spending, but across the industry as a whole, law department spending has not leveled off; it has been steadily rising . And law firms are not the beneficiaries of this increased spending. Who or what is? One answer is Alternative Legal Service Providers (ALSPs). The Legal Executive Institute surveyed ALSPs in 2019, and found that the ALSP market had grown to about $10.7 billion in annual revenues, or a compound annual growth rate of 12.9 percent. The 2019 study noted that the average growth rate for an ALSP not affiliated with a law firm was about 24 percent per year. The survey also noted that the services provided by ALSPs were rapidly moving "up market" to include (among others) such sophisticated work as regulatory risk and compliance, project helping its members prepare for what CLOC would later describe as its Twelve Core Competencies. In the years that followed its launch, Law2020 turned into a truly multi-platform, broad-based learning tool. ILTA created webinars, innumerable conference sessions, lunch and learns, publications, barcamps (which involve neither bars nor camps), and other vehicles for helping members prepare. We also recognized CLOC before it became cool to do so. Early in CLOC's history, we joined forces with that organization. We invited CLOC officers and members to work with us at conferences on brainstorming solutions to shared problems. And we created other joint initiatives with them and with the ACC. As I look back on what we've done to help our members equip themselves for the future of law, I find myself wishing that more law firm leaders had accompanied our members to ILTA's Law2020 events. Because, while there are a few bright and innovative stars in today's constellation of firms, most law firms are still stuck back in 2010, hoping for a return to the glory years. The dim prognosis on their uptake of Law2020 concepts has proved accurate. Altman Weil's annual surveys of CLOs confirm this assessment. Year after year, CLO responses have tilted more and more toward dissatisfaction with the law firm price/value equation and with the nature and quality of the service delivered. To quote Altman Weil: "Every year since 2009, the survey has asked law departments to assess law firms' seriousness about changing their legal service delivery model…. CLOs [have continued to rate] law firms at a median three on a zero to ten scale in which zero equals 'not at all serious' about change and ten equals 'doing everything they can." In the mean time, the big bang that started in 2009 continues to expand around management, legal research, and corporate due diligence. Up market, indeed! ALSPs like UnitedLex have been taking over large swaths of the law departments of Fortune 500 entities. And Axiom is planning an IPO. Then there are the Big 4 accounting firms. They occupy their own stratum of ALSPs, and they too are growing rapidly. PwC has become the sixth largest legal services provider by headcount, and the Big 4 collectively average more than 2,200 lawyers apiece in 72 countries. The Big 4 swept into and have come to dominate the consulting business, displacing all but the largest regional and national consultancies. They show every intention of pursuing the same entrepreneurial model in law as they did in consulting. All of this suggests that the 24% compound annual growth rate for non-law- firm ALSPs may be a floor, rather than a ceiling. And it's worth remembering that, at a 24% growth rate, market share will double every three years. Higher growth rates will approach the power of Moore's Law for achieving transformation—a doubling of power every two years. So, while most law firms are still somnolent, the rest of the legal market is wide awake and evolving rapidly, and at the sleeping firms' expense. The skills fostered in our members by Law2020 remain extremely relevant. The question is becoming who will use them—law firms, or someone else? And what skills we need to cultivate in the next decade. Law2030 anyone? ILTA 1 With the notable exception of CLOC companies, as noted in the previous section. 2 Thomson Reuters Legal Executive Institute, Georgetown University Law Center, and Oxford University Säid Business School, Alternative Legal Service Providers 2019: Fast Growth, Expanding Use and Increasing Opportunity, Jan., 2019.

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