Alternative Legal Service Providers (ALSP) Adoption Drivers

Alternative Legal Service Providers (ALSP) Adoption Drivers

If you are an in-house lawyer or a law firm partner spending most of your time on non-revenue generating, repetitive, time-consuming activities, this is for you …

As businesses face unprecedented cost-pressures and competition, the most savvy of them now turn to innovative service providers and vendors that offer out-of-the-box solutions and delivery models. Globalisation forces businesses to identify sustainable models that allow them to capture market share and infuse value into their business processes.

Alternative legal service providers (ALSPs) satisfy the corporate sector’s demand for agile and affordable legal and legal-adjacent services. ALSPs are niche, innovative companies that render on-demand assistance that can scale with demand, regularly more efficiently and cheaper than it would cost to perform it in-house. Additionally, by utilising a multidimensional resource mix (people, process, and technology), ALSPs have made headway within the law firm space, as well.

Drivers

A 2019 study by Thomson Reuters, the Georgetown Law Center for the Study of the Legal Profession, and the University of Oxford Said Business School identified that ALSP utilisation will likely continue to grow, with a “[s]eismic shift” resulting in 51% of all law firms and 60% of corporate legal departments relying on some form on ALSP services.

In an interview with Legaltech News, Chris DeConti, the head of strategy for legal company Factor, highlighted that clients have begun to demand the benefits that ALSPs bring to the table. "Clients have evolved to the point where they want to buy an outcome instead of a technology," and ALSP’s facility with the technology satisfies that need.

Some of the top reasons for legal departments and law firms to engage ALSPs to relate to:

  • Technology: ALSPs can identify the best tool for the job based on clients’ needs, eliminating the need for clients too. Bear the burden of choosing and maintaining software alone. In some cases, this may mean the development of a bespoke tool.
  • Process: By using project management methodology, ALSPs can help clients document workflows and enable automation. Repeatable and voluminous processes can be optimised and automated, and the ALSPs can foster a process-driven culture within an organization.
  • Expertise: ALSPs can provide a diverse and specialised pool of experts that would not otherwise be available in-house. The ALSP’s subject-matter experts can deploy their skills effectively to match the project demands and accomplish the specific objectives within an abridged time frame, meeting the peaks and troughs inherent in the work. Essentially, ALSPs can increase work quality while maintaining tight deadlines. 
  • Value: In-house departments quickly realise their investments’ benefits, not just in the form of cost savings but also through marked efficiency gains. The in-house core team no longer has to squander time on routine, mundane, and non-core activities.
  • Industry knowledge: Most ALSP executives have spent a considerable amount working with and understanding a specific industry, allowing them to offer unmatched pragmatic solutions.

However, ALSPs do not directly compete with traditional law firms, because they do not engage in the formal practice of law. The types of entities against which ALSPs commonly compete include:

  • Legal process outsourcing organizations (LPOs)
  • Internal departments, incubation centres, or captives at law firms
  • Consulting and IT companies, which have begun venturing into the legal space
  • Boutique law firms and consultancies
  • Legal technology companies that offer managed services solutions

Beyond legal operations

Most ALSPs offer end-to-end contracting, litigation, legal research, investigation, intellectual property, and other legal operations solutions.

However, unlike traditional law firms and LPOs, ALSPs offer niche services to support:

  • Merger and acquisitions
  • Compliance teams
  • Technology consulting and implementation
  • Departmental consulting and optimisation

What the future looks like

The pandemic made everyone mindful that resources are limited, including human resources. If not utilised efficiently and effectively, they may run out, and quickly.

Organisations around the globe are seeking ways to engage their workforces and increase productivity. One question that arises in the mind of every business owner is whether their in-house resources add value to the existing process or just follow it. Legal departments are no exception.

ALSPs have broken this prototype by combining knowledge with invaluable practical experience. Beyond reducing the burden of repetitive work, they also can help companies produce higher-quality deliverables more efficiently.

 

Disclaimer: The views and opinions expressed in this article do not necessarily reflect the official policy or position of Novum Learning or Legal Practice Intelligence (LPI). While every attempt has been made to ensure that the information in this article has been obtained from reliable sources, neither Novum Learning or LPI nor the author is responsible for any errors or omissions, or for the results obtained from the use of this information, as the content published here is for information purposes only. The article does not constitute a comprehensive or complete statement of the matters discussed or the law relating thereto, and does not constitute professional and/or financial advice.