Following the initial slash and burn to stay afloat in the financial crisis, businesses have now moved on to the next stage in recovery. This means the conversation has moved on to sustainable working practices: efficiency and value are key focus areas high on many general counsels agendas.
To date, cost reduction has been a common theme. Over the past few years, the obvious routes to achieve these cost reductions have been taken through redundancies, spending cuts, non-essential office closures and so forth. Asia has not been exempt from this and has seen businesses take the same steps. So how does a legal team now transition from a cost focus to be forward looking and drive efficiency and value in their business?
What is NewLaw all about?
Beyond the traditional law firm and the in-house legal team structure, a wide spectrum of legal services have emerged, predominantly, to meet the evolving needs of in-house legal teams. NewLaw is the broad term used for alternative legal service and NewLaw providers have positioned their services as solutions for in-house legal teams to enhance their efficiency. These services include alternative legal services (eg, short term legal resource), legal process outsourcing and automated technology. This is in addition to the law firms, such as Eversheds, that have embraced the challenge to innovate, diversify and provide alternative services to clients.
There is one NewLaw area that is quickly emerging as an easy win for in-house legal teams: interim legal resource. So far in Asia, it seems to be more readily embraced, likely due to in-house counsel being able to see its immediate benefit. In 2015 Eversheds launched Eversheds Agile in Singapore and Hong Kong, our service which focuses on short term lawyer placements with in-house clients. Since the service launched, many in-house legal teams, both international and local firms across a wide ranging sectors, are embracing it.
As many in-house legal teams currently have lean operations, some being as small as just one lawyer, change can have an immense impact. Utilising a service such as Eversheds Agile could enable legal teams to be more responsive to organisational changes and corporate legal needs. This solution could be deployed to cover a peak in workload, to bridge a gap within a niche skill area, to cover a new project, staff parental leave or during gaps when recruiting talent. Having a NewLaw solution to engage interim resources means legal teams can dedicate temporary resources to a project that may only have a limited lifespan or in some cases, to try a new team structure on a temporary basis before committing to engaging permanent headcount. With interim legal resources, there is flexibility but also cost certainty. Furthermore, there are no termination or redundancy fees to end a contract earlier than expected, unlike for permanent staff.
Market Overview in Asia
There have been NewLaw providers in the Hong Kong and Singapore markets for several years, but the pace appears to be picking up. A 2016 survey by the In-House Congress Hong Kong showed that 82.1% of in-house legal counsel have used or would be willing to use a new law alternative service provider. Given the increasing buzz from businesses as demand has picked up, it is reasonable expect further growth in 2017 and beyond. Albeit, all change takes time.
Currently, in both Hong Kong and Singapore, there are only 4 to 5 NewLaw providers including Eversheds Agile. If the Asia market follows the same trend as the UK, where in 2011 the NewLaw flexible resource market started with just 4 to 5 providers and Eversheds Agile was one of the first. Now, in 2016, there are more than 20 different providers in the UK. Growth can only be a good thing for the Asia market providing greater provider choice for in-house legal teams, as well as broader opportunities for the lawyers who want to work flexibly.
The advantage that Asia has, is that the NewLaw model has been tested elsewhere and has proven successful. Now it is just a case of adapting it to the local market. However, it is important to note that one key difference between NewLaw providers operating in the US and UK markets, versus those in Asia, is the lawyers they retain. To be successful, NewLaw providers in Hong Kong and Singapore must ensure that the lawyers they retain have the requisite experience to cover the breadth of international work, as well as locally generated work. It is also vital to understand the importance of China as a business partner and retain lawyers that possess required language competencies and cultural awareness.
What is the future with NewLaw?
As the interest level among clients continues to grow and NewLaw solutions become less novel, providers will start to fully integrate into Hong Kong’s legal landscape. As has been seen so far, NewLaw providers have found the markets in Hong Kong, Singapore and Australia as suitable platforms for their services offerings. The question is, can these products expand across Asia, most notably into China, where different legal requirements, employment regulations and local business needs provide new and different challenges for NewLaw providers to overcome.