Lawyers; a precious commodity—as proven by the recent hiring spree many ALSPs (alternative legal service provider) have embarked on. There’s something in the air evidently, a palpable tension felt by top ALSPs to secure the best legal professionals for their talent pools.
In Zach Warren’s insightful article, he underscores the hiring tear that is occurring in the NewLaw world. A heady competitive atmosphere is solidifying between several key players in the industry, but over one coveted resource; legal talent.
Previously, we’ve seen ALSPs engage in competition over who can provide the most innovative legal tech, as we saw with Elevate’s development of their multi-purpose ELM legal tech service, or with Deloitte’s Entity Management tool which streamlines legal workflows for its users.
The examples are endless in this regard, it seems as though the Big Four and other ALSP giants are constantly rebranding their legal tech services, catering to new niche’s within the industry.
But now, a new term for competitiveness has been established. Well, it isn’t exactly new, but it is being re-examined by both competitors and their clients. TRU Staffing Partners CEO Jared Coseglia told Warren that “in 2013, 60% of their placements were at law firms, 30% at ALSPs, and 10% at corporations. By 2019, that proportion had shifted to 65% at ALSPs, 30% at law firms, and 5% at corporations”.
It’s not exactly news that the ALSP industry as a whole has been ballooning in recent years, having reached a market worth of over $10B dollars according to Thomson Reuters. But what is the cause behind this focus ALSPs have with rapid talent expansion?
Based on the trend we’re seeing occur now with ALSPs scrambling to poach attorneys from one another, it’s clear that clients are increasingly focused on the quality and scope of talent that ALSPs can provide.
Of course, to secure such a network of talent, it’s crucial for ALSPs to have capable executives on their side, which would explain why Deloitte has (as Warren points out) recently secured executives from competitors like Elevate, Lumincance, and EY’s Riverview law.
But to return to the previous question, the catalyst behind the hiring tear, appears to be a focus on diversification. Diversity has become the most salient factor in an ALSP’s success, and a way in which ALSPs can outcompete one another. To offer up an example; Axiom’s Global Head of Legal Catherine Kemnitz recently said, “We can already demonstrate a much, much higher threshold of diversity”.
This demonstration panders to two sets of clientele; the in-house legal departments or firms that are looking to diversify their teams, and the clients of those said legal departments who see diverse teams as a sign of efficacy, progressiveness, and innovation.
The discourse surrounding diversity in the legal industry has changed in recent years; once referring simply to a diversity in qualification, now the focus has shifted to diversity in race and gender. In Axiom’s 2020 diversity report, a statistic showed that 52% of the company’s 2,400 lawyers are women, compared to the 37% of lawyers at the largest 350 law firms in the U.S., according to the National Association for Law Placement.
Additionally, Axiom reported that 29% of its lawyers are racially and ethnically diverse, compared with 18% of Big Law lawyers. These impressive statistics are the result of Axiom’s “Diversity by Design” initiative, which can in part be explained by Kemnitz’s comment: “Our goal is to figure out what success looks like”.
Success of course, is an extremely subjective term. But for ALSPs looking to be top-market quality, diversity (in every sense of the word) is a must.
By snagging C-Suite legal talent from each other, ALSPs are ensuring their professionals already have a background within the NewLaw world (which, admittedly creates a slight paradox), which then helps to secure diverse, qualified legal networks.
All for the purpose of being able to appeal to any type of client for any type of need. The pressure is on for ALSPs to be the legal industry’s jack of all trades.
Make no mistake, this hiring tear is no impulsive whim, or intimidation strategy. It is a calculated method to ensure legal talent pools accurately reflect the needs/demands of their clients in opposition to their competitors.