In the light of the announcement of a partnership agreement between Kansas City-based firm Polsinelli and New Law stalwart UnitedLex, I revisit my missive from last week looking at the value of making this exact sort of public proclamation. Want to weigh in? Email me here. Want this dispatch in your inbox every Thursday? Sign up here.

Transparency Revisited

You might remember me questioning how valuable transparency is when it comes to law firms working together with outside providers. After all, it was just last week.

Time to complicate the picture just a little bit. I'm not walking away from my prediction that firms will increasingly turn to entities outside of their traditional core to enhance the way they serve their clients.

Look at the "revolutionary changes" identified in a new report on the state of the legal market in 2020⁠. Released Monday, the Center on Ethics and the Legal Profession at Georgetown University Law Center, Thomson Reuters' Legal Executive Institute and Peer Monitor (that's a mouthful), zoomed in on this:

A new model in which law firms are more collaborative (with clients as well as with other service providers, including non-law firms); more open to developing multidisciplinary approaches and solutions; more aggressive in pursuing technology-based solutions; more committed to value-based pricing; more focused on outcomes; and more committed to continuous work process improvements.

Fortuitously, a good example landed soon afterwards. Am Law 100 firm Polsinelli announced that it had turned to New Law provider UnitedLex to build out a litigation support center. The partnership will last at least five years and involves rebadging a handful of existing Polsinelli staffers as UnitedLex employees.

Talking me through the deal, Polsinelli CEO Chase Simmons highlighted a few points that tracked neatly with some of the conclusions in the 2020 report. He noted that while the firm had been using UnitedLex and other third-party vendors to support its litigation practice, he and his board had come to recognize the value of a tighter partnership. Specifically, UnitedLex was willing to "work with us to be both a service provider and to listen to specific needs that we had and our clients had," he said.

Compare that to Thomson Reuters and friends:

In most instances, law firms are outsourcing to ALSPs directly as third-party vendors. In some cases, however, there appears to be a preference for partnering arrangements with the third-party professionals.

The report also flagged how a growing number of firms are creating "captive subsidiaries" to handle certain adjacent legal services: "The scope of activities of such subsidiaries has become quite impressive."

For Simmons, it was a consideration. "We see what the world is going through on an AI standpoint: needing to bend the cost curve on certain things. All firms are making the discussion about what to do in-house and what to purchase from outside."

But in the end, it was an easy answer. With regard to AI in particular, he gave low odds to the likelihood that a law firm would do it better than the rest of the market. "Companies more suited to that are ones I'm going to bet on," Simmons said.

I was glad to get his perspective and have a fresh data point to consider alongside that new report. Particularly because just a week ago, I was speculating that there might be little to gain for firms in making these arrangements public. And in doing so, I had LeClairRyan's 2018 deal with UnitedLex in mind. The failure of that law firm, whose faults turned out to sit far deeper, served as catnip for a number of reporters (myself included) curious about the mechanics of what ultimately appeared to be a Hail Mary pass.

For the folks at Polsinelli, not only was that experience a "non-factor" in choosing to partner with UnitedLex, but it had little impact on their decision to publicize it. Both for UnitedLex, looking to tout its capabilities to other firms in the marketplace, and its latest partner, eager to demonstrate its new offering to clients, there's clearly value in making the supply chain transparent.

In the News

➤➤We've talked about state efforts to deregulate the legal profession. A number of observers tell me that Utah is clearly leading the way. Utah Supreme Court Justice Deno Himonas chaired that state's task force, which put forth recommendations for reform that were adopted by his court in August. In this interview with The American Lawyer, he makes the case for change.

➤➤Law Firm Disrupted perennial subject of interest Burford Capital was eager to tout some developments earlier this week. According to my colleague Dave Thomas, the litigation finance giant promoted two managing directors to new co-chief operating officers, teased a potential New York listing and celebrated the end of a securities class action lawsuit stemming from its tumultuous summer of 2019. Investors rewarded the company with a quick 10% jump in its stock price, but these gains soon ebbed away.

➤➤Finally, according to our internal metrics, odds are you probably read my colleague Christine Simmons' deep dive into elite firms outsourcing back office operations. If you haven't, your peers already have. What are you waiting for?

You'll hear from me again next Thursday! Thanks again for reading, and please feel free to reach out to me at [email protected]. Sign up here to receive The Law Firm Disrupted as a weekly email.