A Comparison of Managed Legal Services in Europe

Last week VQ Founder Helena Hallgarn participated in a virtual workshop at the Bucerius Center Conference on the Legal Profession Autumn Conference, regarding a comparison of Managed Legal Services in Europe. Hariolf Wenzler, CEO at Schnittker Möllmann Partners, chaired the workshop and presented the results from the survey sent to General Counsels and law firm Managing Partners in Germany by Bucerius Law School. The workshop was conducted in cooperation with the European Legal Technology Association (ELTA). The ELTA Ambassadors Helena Hallgarn (Sweden), María Jesús González-Espejo (Spain), Orsolya Szabo (Hungary), Holger Zscheyge (Russia), Edo Bar-Gil (Israel), Ivan Rasic (Bulgaria), Marisa Monteiro Borsboom (Portugal) and Gregoire Miot (France), then each gave a short overview on the state of managed legal services in their countries and discussed whether any countries were more progressive in this field and where Germany and the survey results stand when compared with other international markets.

According to the survey, there seems to be a confusion of what legal managed services really are and how they can generate value. With managed legal services, you typically mean a standardised, process-orientated approach where external providers help clients to simplify and bundle processes and apply legal technology (such as automated workflows or the like) to make them as cost-efficient and scalable as possible. However, as many as 20% of the responding General Counsels and 16% of the Managing Partners thought of managed legal service as a trend in the USA where non-partners offers legal advice. In addition to the lack of knowledge of the benefits of managed legal services, there also seems to be a general resistance to change and fear of getting marginalized by technology. Based on the survey results, it was also clear that the law firm culture as such is still creating obstacles for business development and investments. Apparently, 33% of law firms, still do not share contacts on a firm level, but still regard them as the contacts of a specific partner, not the firm’s.

It was also mentioned that there is a confusion about available IT solutions. This last fact was especially interesting to note, when the results were specified for GCs as compared to MPs. When asked more detailed questions about managed legal services and providers on the market, it was evident that the GCs seemed to have very little knowledge even of available providers. Many couldn’t even name any providers on their market offering such services. The results also showed that the GCs still spend 90% on their external legal support costs on traditional law firms – not so surprising in light of their little knowledge of other legal service providers.

It was also worth noting that although 90% of the responding GCs had the main responsibility for “legal spend management” in their legal department, only 20% of them could show costs for legal advice and costs for legal support services of the legal department separately.

All in all, this means that GCs, who ought to be the main drivers of change and the ones most benefiting from the use of managed legal services, seem to lack the means and the knowledge of the possibilities already existing for them to manage their own daily work and their departments in a more efficient and less expensive way. The survey will be further discussed at the European LegalTech Conference in Madrid this week, which VQ will attend and report further takeaways from.