Is the emergence and growth of the market for alternative legal service providers (ALSPs) a threat to the dominance of law firms in the eyes of their clients, or an opportunity to be leveraged?
A new white paper, “Alternative Power Source: How Law Firms Are Leveraging ALSPs to Make Themselves Better, Faster, and Cheaper” details how the rapidly evolving market for ALSPs, instead leaving many large law firms scrambling to catch up as first expected, is instead allowing many firms to see the rise of the ALSP field as an opportunity.
Indeed, as the white paper points out, large law firms are being more aggressive in their attempts to take advantage of the ALSP model to improve their own legal service delivery. Firms are using a variety of tactics, such as managing multiple ALSPs for a client, establishing partnerships with existing ALSPs, or even creating their own ALSP in-house to handle certain matters.
The white paper keys off a recent report that showed that ALSPs now comprise $10.7 billion of the market for legal services and saw a compounded annual growth rate of almost 13% percent compared to just two years ago. Further, the ALSP market is projected to grow by 25% over the next few years. (That report was published earlier this year by Thomson Reuters Legal Executive Institute, The Center on Ethics and the Legal Profession at Georgetown Law, Saïd Business School at the University of Oxford and U.K. research firm, Acritas.)
Lisa Hart Shepherd, CEO of Acritas, was interviewed for the new white paper after she had spoken to the leaders of numerous ALSPs as a part of her firm’s recent research. She found that about 50% of ALSPs surveyed already are strategically partnering with law firms, and a further 20% have informal relationships with them.
As the use of ALSPs becomes more common, Hart Shepherd said that large law firms are finding new and expansive ways to use ALSPs to improve efficiencies, provide better value, or even access legal expertise that may be outside the firm’s specialties. This willingness on the part of large law firms to trust ALSPs with a wider range of work comes as firms get more comfortable with the ALSP model in general — a comfort that has grown rapidly over just the past few years.
“Law firms could reap further advantage in cost savings by learning from ALSPs how to better measure, document, and demonstrate to clients exactly how and where cost-savings are coming from,” she explained.
In fact, Hart Shepherd added, if anything is changing in the relationship between large law firms and alternative legal service providers, it’s how and why large law is using them, and in what ways this relationship will evolve in the future.
“Large law firms continue to try new ways of employing ALSPs to improve their own efficiency or save costs that can then be passed on to clients,” she said.
For the complete story on how law firms are leveraging their use of ALSPs, download our new white paper Alternative Power Source: How Law Firms Are Leveraging ALSPs to Make Themselves Better, Faster, and Cheaper here.