Recent years have seen a dramatic increase in the amount of Alternative Legal Service Providers (ALSPs) on the market. This is the result of a growing demand for legal services that are more efficient and affordable. Maybe surprisingly, not only businesses, but law firms and legal departments, too, are increasingly using the services of these ALSPs. Let’s have a closer look.
What are Alternative Legal Service Providers?
Alternative Legal Service Providers are service providers that offer legal services outside of the traditional model of legal professions and organizations. The Georgetown Law Center for the Study of the Legal Profession, the University of Oxford Saïd Business School, and Thomson Reuters, published a report last year on ALSPs. In it, they “considered ALSPs to encompass activities performed by non-traditional legal service providers (including independent affiliates of law firms), that are directly related to the provision of legal services. The definition excludes other nonlegal activities that might be outsourced such as accounting, IT support, HR management, etc. And it also excludes companies that provide legal-related software only rather than services.”
So, what legal services do they provide?
ASLPS tend to be niche companies that specialize in one or more specific tasks. These tasks typically require a certain amount of expertise and are in high demand. The services they provide include:
- Discovery and eDiscovery (electronic discovery)
- Document review (including contract review)
- Contract management
- Litigation support
- Contract lawyers and staffing
- Investigation support and legal research
- IP (intellectual Property) management, etc.
What makes them ‘alternative’?
They are alternative in two ways. Firstly, the entity that delivers the legal service is usually not a law firm. Secondly, the services, too, are delivered via a model that departs from the traditional law firm delivery model.
From an article titled “What is an alternative legal service provider?” on the paralegaledu.org website:
“The thing that makes an ALSP alternative is that it is not, and does not pretend to be, a law firm. Instead, it is a legal services business that can provide one or more services that law firms would traditionally offer, but often at a lower cost or with other advantages, including increased expertise, flexibility, and speed. Because they do not have to fit into the structure and hierarchy of a typical law firm environment, ALSPs may be free to alter their business practices to increase efficiency using technology or other innovative practices.”
ALSPs tend to be more tech-savvy than traditional law firms, and some of the services they provide rely on cutting edge technology. Great progress was made, e.g., in areas like eDiscovery, contract and document review by using Artificial Intelligence / Machine Learning. The market share of ALSPS is expected to grow because they take advantage of increasingly sophisticated Artificial Intelligence technology.
Who is using the services of ALSPs?
As was mentioned in the introduction: ALSPs are not only used by businesses, but also by legal departments and law firms. The report mentioned above found that 51% of law firms and 60% of corporate legal departments are already using Alternative Legal Service Providers for at least one type of service. And those numbers are expected to grow.
More specifically, the findings show that law firms are more inclined to use litigation support services (e.g., e-discovery, document review, litigation and investigative support), while corporations are more likely to use services in specialized areas (e.g., regulatory risk and compliance services, specialized legal advice, legal research and IP management).
Why use ALSPs – What are the benefits?
There are several good reasons to consider working with an ASLP. Initially, people turned to ALSPs because they could offer legal services at a lower cost than law firms did. The report found that these days people also use ALSPs because they tend to be more efficient than law firms. They usually can deliver their services faster than law firms can. Lastly, and increasingly more important: because they specialize in specific tasks they can offer a level of expertise that others don’t have.