Alternative Legal Provider Services Boom As Lines Between Traditional and ALSPs Blur

Alternative Legal Provider Services Boom As Lines Between Traditional and ALSPs Blur 2

The growth of alternative legal service providers (ALSPs) is booming according to a new Reuters survey of the services, with over one-quarter of large law firms planning to increase spending on them, even during a declining transactional market.

The Alternative Legal Services Providers 2023 Report shows the services experienced a 20 percent compound annual growth rate in the period 2019-2021.

The report shows the legal market evolving with the boundaries between the new legal service providers, law firms and corporate lawyers blurring.

The same is true of software the legal tech companies also, as ALSPs continue to advance and to develop their service offerings, which provide not only advanced legal services but also create greater cost and delivery efficiencies, helping both corporates and big law firms in a steadily growing cost spiral.

Alternative Legal Provider Services Boom As Lines Between Traditional and ALSPs Blur 3
From Reuters’ ALSP report

By far the largest share of the ALSP market is independent companies who the report shows produce 87 percent of the ALSP market, but there remains a growing sector involving law firms with their own tech companies who are also eating into the overall ALSP market.

We have previously reported on law firms who are jumping into the legal tech arena with their own legal software tools and other initiatives including Slaughter & May with their Collaborate programOrrick with their venture fund, and Baker & McKenzie with their legal ‘disrupter’ developments.

The ALSPs were mostly used by large law firms for legal tech consulting and 37 percent of midsize firms and 31 percent of smaller law firms also use them for legal tech issues.

The legal tech way ahead is therefore a profitable course for the ALSPs, as they help law firms to implement technology systems and to provide support for their implementation.

“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.”

Corporate Legal Departments

There is also growth, but to a lesser extent, with corporate law departments showing an increased interest in using them, but at a lesser rate than the law firms.

Around 21 percent of corporates surveyed said they intended to increase their spend on ALSP services.

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