UK alternative legal services providers LOD and SYKE have announced a strategic partnership that will enable them to combine their expertise in providing flexible legal services and legal technology to help clients revamp their operating models and drive digital transformation.

As part of the alliance, LOD – which is backed by private equity firm Bowmark Capital – will invest in SYKE to further grow and develop its legal tech business. SYKE, which launched in 2016 and is based in Leeds, will remain a separate company and brand, led by founder and CEO Alistair Maiden, former head of contracts, data protection and privacy lead at supermarket giant Asda. The size of the investment was not disclosed.

Maiden said: “SYKE and LOD have a shared view of the market for alternative legal services, its potential and direction of travel. The legal industry is grappling simultaneously with how to move to a digital future and how to resource their teams in a smarter way. Both these issues overlap in multiple ways.”

He added: “Our new partnership means that we are uniquely placed to combine our skills in digital technology with legal talent. By doing so, we will offer clients holistic and cost-effective solutions, which will continue to challenge the traditional legal model.”

Last year, LOD launched challenger firm LOD Law, taking advantage of new regulations that came into force in 2019 that enable it to offer legal advice to in-house teams, expanding on its existing managed services and flexible resourcing model. LOD said the partnership with SYKE means legal teams can access strategic guidance on accelerating new operating models through digital transformation and resource optimisation.

Simon Harper, LOD’s co-founder, said: “SYKE’s exceptional team, brand and leading-edge knowledge makes it a strong strategic and cultural fit with LOD.”

Harper said the partnership will also enable it to develop new client services to underpin growth in new and existing service lines and geographies.

He added: “The partnership will not only reflect our clients’ increasing interest in digital transformation but will also enhance our managed services by leveraging SYKE’s best in class legal tech experience.”

Bowmark Capital acquired from Bryan Cave Leighton Paisner its entire stake in LOD in 2018 for an undisclosed sum. LOD now has more than 1,000 legal professionals across the UK, Europe, Australia and the Middle East generating annual revenue of £56.7m. SYKE has just under 100 lawyers and former lawyers who specialise in legal tech engineering, with teams based in the UK, the US and the Asia Pacific region. Based on current performance, its projected annualised revenue is £10m.

Earlier this week, Ashurst expanded its Australia consulting business with the arrival of five new partners from Deloitte and PwC, just one example of many moves in recent months by law firms, ALSPs and the Big Four accountancy giants to step up their work advising in-house legal departments on digitalisation.