In the modern legal world, the aphorism “no man is an island” can be easily adapted: “no law firm is an island.” Today, lawyers and legal assistants are not enough; law firms depend on a sophisticated and nimble array of support staff, tech providers and others in order to provide the most cost-effective and satisfying experience to their clients.
The American Bar Association has long recognized the value of law firms looking outside of their four walls for such services. After all, lawyers are expensive! To effectively serve clients requires a mix of legal and non-legal services, and if it doesn’t need to be done by a high-priced attorney, it shouldn’t be. Legal outsourcing, of course, is nothing new. In 2008, the ABA formally recognized not only the propriety but also the “salutary” value of outsourcing:
"Outsourcing affords lawyers the ability to reduce their costs and often the cost to the client to the extent that the individuals or entities providing the outsourced services can do so at lower rates than the lawyer’s own staff. In addition, the availability of lawyers and non-lawyers to perform discrete tasks may, in some circumstances, allow for the provision of labor-intensive legal services by lawyers who do not otherwise maintain the needed human resources on an ongoing basis."
The ABA’s opinion on outsourcing followed a long tradition of utilizing paralegals and legal assistants to help make legal services more efficient and less costly.
In line with this trend, alternative legal service providers (known as “ALSPs”) have also been a feature of corporate legal practice for decades and currently more than 70% of corporate legal departments and law firms make use of ALSPs. ALSPs provide a range of services from legal research to legal drafting to litigation support to legal technology consulting to legal operations.
Legal outsourcing and ALSPs serve a unique niche within the United States legal ecosystem because law firms generally cannot be owned by non-lawyers. That means, for example, that a law firm cannot take on outside investment, and a law firm cannot have non-lawyer equity owners (in other words, other employees cannot have equity in a law firm). That makes it very difficult for law firms to scale and innovate in the same way that technology companies can (although there are exceptions in which high-powered corporate law firms have created their own ALSPs).
ALSPs, non-lawyer assistants and legal outsourcing all have the same touchstone: to the extent legal services are being provided, those must be supervised by the law firm. The law firm must ensure that the work it has contracted for meets relevant professional standards, must be responsible for all work products, and must not delegate core legal responsibilities like establishing a relationship with the client and providing legal advice.
Permitting ALSPs and similar companies to operate under lawyer supervision has provided a significant opportunity to drive legal efficiencies and legal innovation. But to date, much of the investment and innovation and in the ALSPs space has occurred because that’s where the money is. Corporate law dwarfs consumer-focused law. But also because the hourly or non-contingent nature of corporate practice makes it much easier to compensate ALSPs; they can charge clients the same way that corporate law firms do (win or lose). In the personal injury space, for example, this is much more difficult because a client will not have money to pay their fee unless they win their case.
Personal injury firms have long relied heavily on non-lawyer assistants and outsourcing, if not more traditional ALSPs. But contrary to the ABA’s reason for encouraging use of these resources, they have not trickled down to the client - the person who has been injured - receiving the benefit of the increase in efficiency or flexibility. Mighty’s goal is to directly improve outcomes for the injured party. For us, providing services to Mighty Law directly increases costs savings for the client.
All of these considerations have come together to inform the legal structure of Mighty and Mighty Law (and of other technology companies or ALSPs in the consumer legal arena).
- Mighty provides the technology and support services that are required by a consumer law firm: intake personnel, advertising, case managers, specialized software, technology support, legal operations consulting and administrative support.
- To the extent legal services are being provided by Mighty, those are provided expressly under lawyer supervision. Mighty Law lawyers have responsibility for ensuring compliance with relevant professional standards, attorney work product, and for non delegable core legal responsibilities.
- Mighty Law is an independent law firm that shares no common ownership with Mighty (although it licenses Mighty’s brand for its trade name).
- Clients sign their engagement agreements with Mighty Law and Mighty Law collects the fee if client’s win.
- Mighty Law pays Mighty a set monthly fee for the services it provides (not tied to the amounts the attorney makes on cases, which would be prohibited fee splitting).
- Because the costs of starting up can be high, and it can take time before revenues come from case settlements, Mighty also provides a line of credit with a fixed interest rate to Mighty Law. Mighty has provided loans to personal injury law firms for years, and will continue to provide them to personal injury law firms around the country since financial efficiency for a law firm should translate into better economics for a law firm’s clients. The funding provided to Mighty Law most closely resembles that provided by dedicated law firm lenders like Esquire Bank.
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