New players and new roles in the legal sector

What has happened?

The legal sector faces a volatile, complex, and ever-changing operational environment: globalisation, GDPR, the effects of COVID-19, whistleblowing, ESG, digitisation, fintech solutions, automation, AI and ChatGPT… Traditional market participants (law firms and legal departments) struggle to keep up with emerging new regulations, tools and demands, making it hard to adapt their operations in due time.

Newcomers bridge this gap, stirring the waters. They are widely spread in the US, conversely relatively unknown in most European countries, which is why they need to work hard to be recognised.

Who are the new entrants?

These organisations mean competition from several points of view, having non-traditional organisational structures (smaller, more flexible), operations (adaptive business model, rate structures), headquarters (co-working spaces, home office), roles, legal forms of employment and staff. They react fast, work according to the business mindset applying tech tools and innovative solutions. Opposite to the traditional legal career, new roles emerge, and employment of non-lawyers from other parts of the world has become normal. These new entities of the legal sector deliver high-quality services through various methods within a different culture than traditional firms, thereby challenging existing stereotypes.

ALSP (alternative legal service provider)

They offered outsourced legal services enhanced by innovative solutions and legal technology tools. Their emphasis is on high-volume activities such as audits, legal research, and document review, or by contrast, specialist tasks like intellectual property and translation.

Legal tech companies

They support the operation and legal work of previously introduced market participants with technology tools. Typical practice areas are digitisation, data analysis and visualisation, document and process automation, and legal practice management.

Legal innovators

These companies provide new service delivery models or tools, like smart contracts or legal process analysis.

Changes the legal sector faces

Participants of the legal market must comply with the same challenges as their clients have in their business within a slowing economy of a fasten world: reducing legal costs, fastening decision-making processes, and increasing efficiency to maintain their market share. Hence, legal service providers must operate more transparently and responsively, providing a predictable outcome at an affordable price. Clear and understandable communication reducing legal terminology is a basic demand in the legal sector.

Despite the significant focus on subjects such as Roman law or legal history in law faculties, legal education is absent on business acumen or soft skills. Although clients require their legal partners to possess not only a legal mindset but a more holistic perspective and skillset, understanding and handling not just legal problems but business and even IT aspects as well.

To take up challenges, the legal sector has to evolve, for example by implementing new tools, methods, and roles, altering attitudes and operation models. This transformation is undoubtedly complex, during which it is essential to bear in mind that lawyers have their own logic, attitude, and language, working not just with quantitative but also qualitative values (legal ethics, trust, etc.).

The following interview series will introduce non-traditional legal roles and their future through the glasses of their pioneer representatives.