Saving on Alternative Legal Service Providers in 2021: Why In-House AI is the Better Option

temp-iconWhen corporate legal departments seek alternative legal service providers in 2021, they’ll need to consider the dynamic shift that artificial intelligence (AI) has introduced in the field. In the past, traditional options to increase efficiency often involved outsourced and offshore alternative legal service providers. However, advances in AI technology have led legal departments to view AI as an industry game-changer. Below we’ll take a look at some of the shortcomings of alternative legal service providers and how AI is redefining this sector.


shutterstock_1468048370Legal department using artificial intelligence instead of alternative legal service providers in 2021

Disadvantages of Offshore Alternative Legal Service Providers in 2021 

Corporate legal departments have traditionally saved time and money by turning to alternative legal service providers for routine contract review. Through outsourcing, companies discovered an affordable solution to increase productivity and flexibility in their legal departments.

However, there are drawbacks to consider:

  • Confidentiality and Security Issues - How much confidential information are you comfortable sharing? How secure are your offshore partners’ databases, browsers, and processes? Despite assurances, you can never fully know if your outsourced information is protected. 
  • Regulatory Differences - Discrepancies in regulatory policies and legal systems from country to country can complicate the exchange of business services. 
  • Language Diversity - Even two countries that speak English as a first language will find that differences in terminology, spelling, and phrasing arise. It takes time for the outsourced team to align with these subtleties. And time, of course, is money.
  • Delays - When you cannot manage timelines and address issues as they arise, small delays can create massive backlogs. 
  • Quality - Maintaining adherence to quality standards presents a challenge when initiating an ALSP relationship; thorough vetting is necessary to secure a qualified offshore partner. Even an extensively vetted firm will require time to get “in sync” with playbook rules. Additionally, partnerships can collapse when the outsourced firm experiences high turnover or when they lose key staff members.

Onshoring can resolve some issues, but it still requires a larger investment, a high degree of trust, and a considerable time commitment to develop a working relationship.

Benefits of In-House AI

Enter AI: a solution for innovative legal departments and forward-thinking companies looking to retain more in-house control. By keeping the contract review and negotiation process in-house, corporate legal departments can harness the power of AI and machine learning to save money while ensuring strict adherence to playbook guidance. 

Reviewing alternative legal service providers in 2021? Here are a few reasons to consider AI instead: 

  • Save Time - Legal teams waste time combing through past contracts, running side-by-side document comparisons, reviewing changes, and researching multiple contract versions to determine negotiation strategies. An AI contract negotiation platform automates the contract review process to provide time savings—at scale. 
  • Save Money - An advanced AI platform can perform a full, unbiased contract review in minutes, allowing attorneys in your organization to focus on higher-value deals. While legal departments may need to train staff on the tools, the training is minimal compared to teaching new hires to review contracts manually. AI adopters see a 99% reduction in playbook training costs upon implementing an AI-powered platform. 
  • Improve Quality - AI technology enables legal departments to create an AI Digital Playbook that provides guardrails for a negotiator to increase playbook adherence. 

Transitioning from Alternative Legal Service Providers to AI

AI alleviates the need to outsource routine contract review. Even if a legal department is not ready to fully transition from an outsourced provider, the department can employ AI for redlining contracts, simplifying document analysis, and updating playbook standards. An advanced AI platform can automate the contract negotiation process and even suggest inline revisions based on playbook guidelines and successful negotiations. 

AI is also capable of analyzing copious and complex legal documents in a matter of minutes. What once required several weeks can be completed in near real-time, empowering your legal department to take on a volume of contracts unthinkable just a few years ago.

The legal industry’s AI adoption is ramping up, and current AI tools have shown the ability to supplement and in many cases even begin to displace alternative legal service providers in 2021.

LexCheck’s AI-powered in-house legal tech can replace alternative legal service providers in 2021. To learn more about our contract negotiation platform, request a demo or reach out to us at sales@lexcheck.com. 

gary-sanghaGary Sangha | Founder & CEO

Gary Sangha is the Founder and CEO LexCheck. He's a serial entrepreneur and an academic. Gary previously founded Intelligize, a legal technology company that was acquired by LexisNexis. He's affiliated with the University of Pennsylvania and Stanford University and started his career as an attorney at Shearman & Sterling and White & Case.