According to the biennial report, which is entitled “Alternative Legal Services Providers 2023,” ALSPs have evolved into a $20.6 billion market and grew at a 20% compounded annual growth rate between 2019 to 2021. That rate jumped five percentage points when compared to the 2017 to 2019 iteration of the study.
“Both law firms and in-house counsel are increasingly seeing the value of alternative legal services providers,” said lead author James W. Jones, a senior fellow at the Center on Ethics and the Legal Profession at Georgetown Law. “Meanwhile, ALSPs are expanding the services they offer to law firms and corporate law departments by providing specialized services, improving cost efficiency, and delivering greater flexibility in headcount.”
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The report, according to its authors, is evidence the legal industry is evolving and the line between traditional legal service providers and their alternative counterparts is continually blurring.
Gartner Peer Insights, which provides reviews and ratings of a wide variety of tech solutions, notes there are several different kinds of alternative service outlets including staffing ALSPs and managed services ALSPs. It describes them as “ … non-law-firm providers or law firms with purpose-built delivery services that perform legal support work at a lower cost than traditional law firms and corporate legal departments.”
The fourth installment of the ALSP report featured survey data collected between June 1, 2022 and July 18, 2022. It includes almost 650 respondents from law departments and law firms in the U.S., Canada, UK, Australia and Europe, notes the report.
“38% of CLOs said they plan to hire more lawyers this year, compared to 45% in 2022...plan to send more work to law firms and alternative legal service providers this year than last year.” New CLO survey by @ACCinhouse https://acc.com/about/newsroom/news/acc-2023-clo-survey-partnership-exterro-shows-clo-role-continues-grow-focus"
Data from the reports shows most of the alternative service providers are independent shops—that segment accounts for 87% of the total ALSP revenue—but there is a rapidly growing segment of “captive ALSPs,” which are owned by law firms themselves, reads information from the report’s authors.
Additional findings indicate more than half the “large” firms surveyed said they use the providers for legal tech consulting, while 37% and 31% of mid-sized and small law firms, respectively, reported seeking out their services to those same ends.
“ALSPs are demonstrating value in helping law firms identify and implement the right technology solutions as well as providing training and support,” said Michael Abbott, head of the Thomson Reuters Institute. “The ALSP market increasingly includes software companies and providers of comprehensive legal technologies.”
To read the full report, visit here.