Wave of Legal Outsourcing and the Meaning of the New Tech Law Firms

Intellect technology is innovating across industries, and how it is changing the legal pie is not much of a surprise. IncloudCounsel amongst other players has its own strategy and market niche. But what does it mean to the legal space with the emergence of these techies?
IncloudCounsel team at the headquarter office
Courtesy: IncloudCounsel
By | 12 min read

As freelancing in career choice is evidently becoming elastic and increasing, there is no surprise when we are seeing the new rise of freelance-wise in legal work.

Traditionally, companies have handled legal work internally or outsourced it to a Big Law firm – both imperfect solutions that sacrifice some combination of time, cost and quality of output. The problem, however, is that for both party there has not been a better option.

Until lately, trying to pair its virtual network of corporate lawyers with its AI-backed tech platform to handle routine legal work for large enterprises. IncloudCounsel is known as “the largest global provider focused on automating and enhancing high-column legal processes.”

Founding Story: Finally, a Better Lifestyle for Attorneys

New waves of services are emerging across industries such as Uber in commuting, Realself in cosmetic, and go on. They are giving people the opportunity to work when they want to, and for as long as they wish. And that has got Ben Levi thinking how he could find attorneys who did not want to live the lifestyle that comes with large-firm employment to do tasks that are often expensive and repetitive for corporations, and on behalf of other firms. It sure is the only problem has been around for so long, a daunting fact of this billion-worth industry.

After Ben Levi meets with his co-founders, software engineer Lane Lillquist and management consultant Troy Pospisil, all the legal, business and technology are brought together, and IncloudCounsel is formed. Allowing lawyers to work as contractors and to do quality work for clients without the stress of billing for large law firm, the company shows signs of an increasingly popular virtual and freelance legal business model that includes competitors such as Up Counsel.

Founded in 2014, IncloudCounsel combines cloud-based software and experienced corporate attorneys to offer enterprise clients a scalable, end-to-end solution for negotiating and managing routine legal work.

Mitch Spierer, VP of Product from the site, mentions how the site is ready for its position as a market leader, by combining machine learning tools with contract data and volume. And by leveraging the human-in-the-loop (HMITL) system, means that this model would only getting better, faster, and cheaper over time. Which also means with this site many repetitive works would be eliminate for customers to have freedom to focus on the higher value aspects of their jobs that require creative human attention.

It seems to be a promising formula, as the platform reports 70% average cost savings for clients and 94% client retention rate. What this company brought to the current market is quite promising for a boom in growth – both domestically and internationally, across the entire business.

“We combine best-in-class tech with high-quality attorneys to handle their high-volume or recurring needs. A lot of things like nondisclosure agreements and vendor agreements,” Ben Levi, co-founder and chief operating officer of InCloudCounsel, explained.

As the new workforce is coming up and younger attorneys are becoming more interested in taking time off to start a family or pursuing other endeavors. The freelance model will likely grow.

Especially, throughout the unsettle outbreak which the company’s founders admit was unprecedented in some ways. However, the pandemic has not been as troublesome to his business as it could have been, Levi says, point out a strong company balance sheet and the fact that his team was well-positioned to ride that out – well set up to work from home.

How Everybody Is Pleased for This New Solution?

In general, IncloudCounsel operates under a bill-by-the-document model, meaning that you do not pay for anything beyond the per-document fee that has quoted upfront, even for using the additional aspects of the platform. No storage costs, user fees or hourly charges. And on the law firm side, the company earn money by selling other products and services such as technology platforms and process management systems.

This way, clients are also pleased for the cost is fairly less than what a major NYC, London firm would charge for similar work, while delivering comparable work quality and speed.

It’s founder Levi claims as of now, the site already has several hundred lawyers on its platform, with an expectation that it will be several times as large in the next five years. Not much different from Levi’s background, lawyers on the platform typically went to a top law school and worked for several years at a well-respected firm. Levi explains less than 5% of applying professionals are accepted into its virtual network. Lawyers from the site got hooked up to work almost immediately, are paid competitively, and are able to generate a steady stream of income.

On the other hand, the site approaches its legal freelancers with the three promises including providing the opportunity for freelance lawyers to practice law at a high level, well paying, and last but not least offering the opportunity for a more balanced life through a remote flexible work arrangement.

IncloudCounsel team in a technical workshop
Courtesy: InCloudCounsel

“We’re a relatively young company, and our challenge is like any other startup: we need to demonstrate that we have the size, talent and experience to work on our clients’ most important projects. But, if clients’ feedback and the reaction of the top firms is an indicating, we’re making good progress.”–Levi shares on Forbes.

Growth Challenges

On making progress, the company also partners with world’s leading law firms to handle their clients’ high-volume legal work. Companies sometimes ask their law firms to handle routine legal processes, which are not the right use of their attorney’s time either and can create difficult-to-manage conflicts issues. Therefore, law firms are recommending the site to their clients as a way to automate their recurring agreements, and law firms could ensure that their own resources are able to stay focused on high-value work for their clients and conflicts of interest amongst employees – it is a win-win scenario.

However, as a start-up itself, IncloudCounsel has to face a few key growth challenges. Levi explains, with this freelancing model to maintain a great work environment and organization culture is the most urgent aspects. As the company puts together office based and remote work, the founder points out the importance of a collaborative work environment, something that, a former lawyer himself said, traditional law firms often lack.

Secondly, his leading team is putting effort to build a strong freelance talent community. Play as a marketplace, the company understand that their most important asset is the pool of talent on the platform: recruiting top and potential people, retaining and making them better. Levi shares how he knows firm like Toptal has considerably invested in their community outreach, and understand that their role is to engage, support and skill-proof their talent. A marketplace but far more than that, nurture culture, build community, and host talents – that is the winning strategy. The company gets this and is putting forward such core values.

IncloudCounsel engineering team collaborate on Kanban board
Courtesy: InCloudCounsel

Last and not least, it is trying to broaden the offering. As crucial as culture, IncloudCounsel has taken on the challenge of accelerating its growth of both its service offering and its international presence – earlier 2021, the company has made its first presence at Asia as promised.

Their pitch to corporate clients: “We go where you are.” That’s meant a ramp up in capability in areas like healthcare and real estate, where they have been able to build a high volume of work both.

A Fact about this Company Few People Know?

As a seasoned management consultant, co-founder and now CEO of IncloudCounsel, Troy Pospisil shares insights.

“Culture eats strategy for breakfast”

– Peter Drucker

To him the secrete for successful business is building a high performing team. And paved that foundation is a strong culture – so much of what enables people and teams to perform their best. Especially, as leadership team, it is crucial that you are consistent and transparent, in words and actions, on your company’s values, purpose, and vision.

Also, Pospisil addressed the most important business and culture decision that managers make every day is who to hire. If leaders enroll the right teammate who are already aligned with your culture, it makes it much easier to maintain that culture as you scale.

The CEO also shares over 50 percent of his team came through the network of an exciting team member – and how their average annual employee retention over the six-year life of the company is over 95%.

Tech Talk: Artificial Plus Human Intelligence Is Still the Best Combo

As a tech company obtaining one of the top AI solution, IncloudCounsel’s CEO also mentions one of the most under-rated trends in technology. And how distributed, virtual workforces is now a trend.

There are several currents in culture, politics and technology that, combined, are leading to a massive transition in how people interact and work. And Pospisil believes the ultimate result will be a major shift from people working in centralized offices, large firms alike, to some combination of home and smaller offices.

Lots of the current trends that have contributed to this change, in how work gets done include broader geographic access to high residential, better digital tool for communication and collaboration remotely. This transition will, in turn, have board implication for the future of our culture and politics.

AI and the Outlook in Legal Industry

The PwC predicts that by the mid 2030s, up to 30% of jobs could be automated. Within the legal practices, Lane Lillquist – CTO of IncloudCounsel tells his vision on the importance of automation for typical business.

No doubts, automation has already played an important role in making companies’ business processes more efficient. And whom that do not adapt are going to slowly lose their ability to compete in the market. You can see opportunity for automation in any task that is standardized and repeated frequently. Databases, machines and computers have made many automations possible over the last decades and are nowhere near their maximum potential. Not to mention the fact that AI is helping to solve a new class of problems that further increase the impact of automation is having on businesses. That is the case for businesses in general, as the world is changing, you also have to!

Toward the legal space specifically, will AI assisted tools move up the ‘contract food chain’, and help lawyers with negotiation, drafting and marking up of more sophisticated and less routinized agreements, if so, how long will this evolution take?

Lillquist shares on an interview with Ai.PinHawk, AI currently is still narrow in scope that it is only able to automate simple tasks. As the intellect improves over the next couple of decades, it will be increasingly capable of automating more sophisticated tasks that further enable lawyers with aspects of document negotiation and management.

Software sure will continue to ‘eat the world,’ and AI will help ensure the legal space reaches the same efficiencies that you have seen technology deliver to other industries. Exciting thing will soon emerge to transform the legal industry, Lillquist believes, “My eyes are wide open; I’m continually amazed at the power of technological innovation.”

A Thread to Traditional Firms?

Any chance, the speedy smart of IncloudCounsel a thread to traditional firms? “Great firm will continue to exist for the specialist work they do, and will continue to attract and earn high fees,” Levi say not foe the best.

IncloudCounsel leadership team speak at a legal ed conference
Source: LexisnExis

But he points out, corporate law departments are shrinking and increasingly cost conscious. More of the routine work and document management will attract a different kind of service, with a different price point and level of hand holding, and an increased role of tech. It’s evident that online legal platforms like IncloudCounsel will play an a growing and increasingly important role in global legal work. 

IncloudCounsel does have its unique solution and is needed for that. However, to compare, it cannot offer the same advantages as Big Law does, such as high compensation, and perhaps the most important for young lawyers hoping to build their own practice – a fine credibility obtained from working at a top firm.

 “Could this be a different conversation ten years down the line? Sure,” said Ben Levi, co-founder of IncloudCounsel and a former Kirkland & Ellis associate. “If I thought Big Law were the right way to practice law, I’d still be working at Kirkland.”

“Clearly, we have a theory,” Levi added. “There’s a better way to do high-quality legal work than the way a large law firm does it.”

The Bottom Lines

Apparently, smart companies, for now, are just playing their role as a helper for firms, on accelerating and changing outdated processes. If larger companies migrate some of their work to lawyers on these sites, and if the work grows more sophisticated, the legal services landscape could continue to change. Of course, there will always be a trade-off, you will lose some to get some, and within this space only time can answer the outcome.

Along with other industries, the innovative solution IncloudCounsel has brought and this trend of law firm tech businesses, again reminded us of how we should use our imagination more than our memory.

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