As Law Firms Use ALSPs More Frequently, Worries of Fraud Increase

Topics: Alternative Legal Service Providers, Law Firms, Leadership, Legal Innovation, Peer Monitor, risk management

ALSP

We’ve written quite a bit lately on the emergence of alternative legal service providers (ALSPs) as a true force in today’s legal market. As we’ve reported, more than 50% of law firms are using an ALSP for at least one type of task or service today, with another 20% or so planning to begin doing so within the next year. For law firms, some of the most common tasks for which they turn to ALSPs are related to electronic discovery and document review.

While using ALSPs can have its advantages, and indeed may even be mandated by clients, it is not without risks. Data security and privacy ranked among the top concerns cited by law firms related to using ALSPs. Perhaps we can add a new potential worry: fraud.

It was recently reported that one law firm had reached out to an ALSP for help staffing up for document review in a years-long litigation matter. But there was a problem with the staffing provided. One of the attorneys staffed to the matter wasn’t an attorney at all. He’d been disbarred years before and had given a false name to the staffing agency.

This particular attorney had billed more the 6, 900 hours over the life of the matter, accounting for fees in excess of $1.5 million, more than a quarter of the fees requested as part of the recovery on the entire matter. Now the court is reconsidering the fees awarded in the case.

To be sure, the vendor who provided the attorney to the firm bears the brunt of the responsibility for what happened here.

But this case also highlights the responsibility a law firm bears when working with outside vendors. Just as the firm would be on the hook if the vendor compromised sensitive client data, the firm bears just as much responsibility for ensuring the quality of the service provided by the vendor, and that may mean vetting the staff the vendor provides.

In all probability, the type of incident that occurred in this case is highly anomalous. But the stock-in-trade for most lawyers is finding solutions to, or outright avoiding the most unlikely of potential pitfalls.

ALSPs are a fact of life in the legal market, and their influence will only grow. It is up to those who consume their services — law firms and corporations alike — to ensure that the vendors they work with live up the expectations of quality, security and professionalism that the legal market demands.