Last year produced the biggest shakeup in the outside legal services market since the Great Recession as 90 percent of corporate legal departments (CLDs) reduced their active provider relationships, and 16 percent of attorney-client relationships that existed in 2019 were paused in 2020.
That’s according to Wolters Kluwer ELM Solutions, which today published its LegalVIEW Insights report - the first of four quarterly reports in 2021 – analyzing emerging legal industry issues using data from its LegalVIEW Data warehouse.
The inaugural report, compiled by Nathan Cemenska, Director of Legal Operations and Industry Insights for Wolters Kluwer ELM Solutions, focuses on corporate legal department (CLD) law firm vendor usage. Due in part to the 2020 COVID-19 pandemic and its effect on the economy, every law firm segment was impacted. From the largest, most prestigious firms to solo practitioners, every group saw a significant number of attorney-client relationships put on hiatus. The mean number of outside providers actively serving the typical corporate law department declined by 12 percent year-over-year, and the median number of providers dropped by 16 percent compared with 2019.
Additional highlights from the inaugural LegalVIEW Insights report include:
“Last year, a significant number of relationships between law firms and their clients went dark—not a single legal invoice was sent in these cases. With the economy coming back, those gaps are going to be filled, but it won’t always be by the firms that lost the business,” said Cemenska. “Alternative legal service providers, the Big Four and competing law firms are hungry for that business as are in-house legal teams, which continue to get better at doing the work themselves.”
In conjunction with the LegalVIEW Insights reports, Wolters Kluwer ELM Solutions will produce an ongoing series of LegalVIEW Insights blogs, webinars and other content discussing the emerging trends from the LegalVIEW Data Warehouse -the most comprehensive legal spend database in the world, with more than $140 billion in invoices. On Thursday, April 15, for example, Cemenska and legal technology strategist Brad Blickstein, Principal, Blickstein Group, will host a webinar offering a deeper look at data and potential long-term trends from the inaugural report.
Wolters Kluwer ELM Solutions releases the report following a six month period of notable activity. Late last year, for example, the company announced that the U.S. Patent and Trademark Office (USPTO) had granted the company patent #: 10,733,675 for the groundbreaking artificial intelligence (AI) technology behind LegalVIEW® BillAnalyzer.
Wolters Kluwer introduced LegalVIEW® BillAnalyzer in 2017 to help corporate legal departments and insurance claims organizations more efficiently manage their incoming legal invoices and improve cost management. The proprietary AI-powered bill review automated scoring system is able to provide a high degree of accuracy and efficiency in the overall bill review process compared to non AI-powered bill review processes. This unique design leads to high quality, accurate billing adjustments and cleaner billing over time. The patented AI technology leverages natural language processing and several model-based predictors to power a bill review system that delivers customers best-in-class results.
ELM Solutions, part of Wolters Kluwer’s Governance, Risk & Compliance division, is the market-leading global provider of enterprise legal spend and matter management, contract lifecycle management and legal analytics solutions. The company provides a comprehensive suite of tools that address the growing needs of corporate legal operations departments to increase operational efficiency and reduce costs. Corporate legal and insurance claims departments trust its innovative technology and end-to-end customer experience to drive world-class business outcomes.
The LegalVIEW Insight report is available here.
Copyright © 2021 Legal IT Professionals. All Rights Reserved.