In 2008, just before the financial crisis hit, I took a leap of faith–I left my BigLaw partner position and started Valorem Law Group with Patrick Lamb. Valorem was a firm dedicated to bringing alternative fee arrangements (AFAs) to the market for litigation. Virtually no one was talking about AFAs in 2008. In fact, just before leaving, I had multiple colleagues tell me that I was dooming my career, as no one was going to move to AFAs in our lifetime. Yet when the recession hit in 2009, suddenly law departments realized that the typical 10% discount law firms were willing to offer was simply not going to cut it. In no time at all, what seemed like a "radical" alternative became mainstream. In fact, today nearly every firm in America reports using AFAs. By 2016, Valorem was named one of the top 22 law firms for AFAs. While we'd like to think it was our irreverent marketing and forward-thinking that paved the way for AFAs to take hold, the truth is, it was the very immediate financial crisis that drove the shift from "same old, same old."
Here we are again, more than a decade later. Yes, it's a different crisis and yes, we have a different law firm, but the end result isn't that different–perhaps just more exacerbated. General Counsel and law departments are not just faced with doing more with a little less. Given the dramatic budget and staff cuts that are spreading rampantly across all industries, in all geographies, now they are faced with doing much more with much, much less. Necessity is the mother of invention, and moving away from the innovate-at-a-snail's-pace, that's-the-way-we've-always-done-it mentality the legal industry has forever clung to will be the only way to survive. There's no way to "discount" your way out of this.
The article in The Lawyer says it perfectly. We started ElevateNext to bring the practice of law capability to global law company, Elevate because we firmly believed that the legal marketplace was going to have to radically shift from the "same old, same old" of automatically funneling everything to traditional outside firms or hiring more and more in-house staff to get things done. We firmly believed then and now that driving efficiencies, lowering costs, and never sacrificing outcomes would be the wave of the future, and we also knew that the combined forces of Elevate and ElevateNext would be the way to do so. Did we know exactly what the catalyst for change would be? No, but amid the disruption of the COVID-19 crisis, we take some comfort in the fact that as GCs, CLOs, heads of Legal Operations and law departments now look to "alternatives," the foundational work that ElevateNext and Elevate have created will help ease the transition. Together, we can help foster change in the legal landscape of the Next Normal that is better for all.
As corporate CEOs are short on cash to inject into large-scale M&A transactions, alternative legal services providers (ALSPs) have a once-in-a-lifetime opportunity to offer their services to in-house teams. GCs, historically at the helm of costs-savings unit, are tightening the belt wherever they can. This is done by gathering data to ensure their house is in order and processes are well managed.