I am fairly new to legal industry but it is becoming clear to me that the demand for Alternative Fee Arrangement are on the rise.
Majority of transactional legal work like drafting and reviewing documents are the prime target for some kind of alternative fee structure as opposed to billing by the hour.
Aided by technology like enterprise search and knowledge management – corporations are increasingly asking for better deals on doing legal transactional work.
At a recent Ark Conference I got to hear first hand from corporate counsels of large firms. Their view was if they needed a fairly standard contract they were more likely to go to their counterparts in other companies and request such templates. They would either accomplish this through a personal connection or go through ACC (Association for Corporate Counsel). They would then modify this template to fit their needs and then if needed would ask an outside law firm to review it thereby reducing the cost considerably.
A few days ago I was discussing this with my legal counsel and he had another interesting take on this. He kind of saw this as an ongoing evolution of the transactional legal market. He told me that 8-10 years ago when he started offering discounted transactional legal work as a small one person law firm – it was a rarity. Most transactional work was done by large law firms.
I believe that in time to come technology will take over all repetitive mundane portion of transactional legal work and law firms that wake up to this reality and change their business models accordingly will have greater success.