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Corporate legal departments have traditionally worked with external law firms to achieve their objectives, but in the past few years, this collaborative model has expanded to include a third party: the alternative legal services provider (ALSP). And while a recent Thomson Reuters report documents remarkable momentum in the engagement of ALSPs by in-house counsel and law firms alike, the three-party model is new enough that some are still striving to find that sweet spot where each team's expertise, efficiency and productivity align.

According to Thomson Reuters, corporate legal departments are increasing their use of ALSPs so quickly that many have already surpassed the 2021 projections they set forth in 2016 for ALSP involvement. They see value in using these firms because they enable in-house counsel to: (1) gain access to specialized expertise when they need it; (2) drive greater efficiencies; (3) farm out repetitive, time-consuming work to free up their internal team members to work on more strategic matters; (4) reduce costs; and (5) meet peak demand without increasing headcount.

The challenge is how to bring these advantages into the fold to benefit everyone—that is, how to create a WIN-WIN-WIN situation that ensures your legal department works as a well-oiled machine.

Be strategic in assessing talent and distributing work. When you fully understand the types and level of knowledge and expertise each party can provide, you can create a strategy that streamlines your processes, minimizes redundancy, reins in costs and enables you to better manage your departmental workflow. The key is making sure you have the right organizations doing the right things.

For example, many corporations don't see value in paying their law firms to do lower-level, time-consuming work such as document review and due diligence. They would prefer to use their ALSP partner for these tasks, because for certain services, an ALSP can charge less while providing the same high level of quality as a law firm. Law firms don't mind, because they would rather not expend their own staff resources on lower-profit work.

I learned this years ago, when a client reached out asking me to provide his outside counsel with 10 contract attorneys to assist on a litigation. My instinct was to apologize to the law firm, because I felt as though I was taking business away from them. They didn't see it that way at all. By collaborating with an ALSP, the firm knew they could continue doing the higher-priced, higher-profit work while our contract attorneys efficiently carried out the document review. So all three parties—the corporate legal department, the law firm and the ALSP—benefited.

This isn't to say that ALSPs can only do routine work—far from it. ALSPs staffed with top talent can also bolster your team in times of peak activity or bring subject-matter expertise to the mix when needed. Experienced contract attorneys can assist with licensing agreements, contract drafting, pre- and post-deal due diligence and integration, data protection and cybersecurity, regulatory compliance, lease review, ISDA agreements, employment matters, reorganization and more. The key is to determine where they can provide the most value to your department and how you can coordinate this with your internal team and your external counsel so that you are making the most of all of the talent that's available to you.

Communicate. Collaborative efforts can be effective only where productive, ongoing communication exists. Bring the parties together on the front end of every project and talk through the strategy so that everyone understands that this is a not a competition but a partnership. Clarify roles, responsibilities and expectations; discuss how teams will collaborate; and give people the opportunity to share their ideas and concerns.

Also be sure to spell out reporting requirements, emphasizing the need for transparency, so you can monitor progress and results. And set a standard for communication going forward—weekly update calls, for example.

Stay agile. Agility is one of the greatest benefits of using this three-party model. Think about it: If you're dealing with a lot of mergers and acquisitions this year, you can bring in strong M&A talent without having to hire additional full-time attorneys. Next year, your focus may move from M&A to employment issues, and so you can bring on lawyers with employment expertise. You can also be agile in staffing up or down as workflows fluctuate.

Because you have so many resources, you can pull together just the right team for your needs of the moment.

Keep an open mind about how you structure your teams for various assignments. The more you work with your collaborative partners, the more natural the arrangement will become and the easier it will be to determine exactly who should do what, depending on the circumstances. You may find that, through this strong collaboration, your legal department operates more smoothly and cost-effectively than ever before.

Leslie A. Firtell is an attorney and CEO of Tower Legal Solutions, which she founded in 2007. Tower Legal Solutions is a WBENC-certified woman-owned company, providing services in legal staffing, managed review, consulting, attorney engagements, contract management, and compliance. Firtell is an active member of the Women Presidents' Organization, which is dedicated to supporting and empowering women entrepreneurs.