Why Alternative Legal Service Providers Matter More Than Ever

Beginning with the introduction of e-discovery and the popularization of legal operations departments in the early 2000s, the use of Alternative Legal Service Providers (or ALSPs) has seen a boom over the last two-and-a-half decades. A 2023 report by the Thomson Reuters Institute notes that the ALSP market grew 145% between 2015 and 2021 alone, to over $21 billion.

Today, ALSPs are increasingly indispensable to corporations and law firms who outsource legal casework to these contractors and see their use as a way to differentiate their services and gain a competitive advantage. In fact, as market changes only accelerate, the use of ALSPs has become a core strategy to help in-house counsel navigate an ever more complex landscape.

So how are ALSPs essential to your firm? Here are 5 tips for how to best leverage working with an Alternative Legal Service Provider:

1. Increase efficiency

According to a 2022 EY report, 82% of businesses were planning to reduce legal function costs over the next 24 months. While this may mean reducing casework sent to expensive law firms, it shouldn't mean extra work dumped on in-house staff or a drop in quality. In fact, hiring ALSPs helps in-house legal teams focus on higher-value work while reducing costs and maintaining quality of work. When cybersecurity firm SecurityScorecard underwent major growth, recently, the increased contracting caseload was outsourced via Lawtrades to ALSPs who leveraged their own previous contracting experience for SecurityScorecard and allowed in-house counsel to focus on higher-impact work and strategy.

2. Staffing flexibility

Not only does reduced spending on legal costs affect outsourcing, but it also affects staffing. Just as major law firms are trimming their headcount, internal legal departments are doing the same. Hiring contract-based ALSPs off platforms like Lawtrades offers in-house counsel access to top talent pools without committing to full-time employment. In essence, ALSPs flipt the term "more for less" on its head so that legal departments can access high-quality talent for less money. Moreover, for firms and businesses expanding globally, ALSPs provide immediate access to and knowledge of foreign markets. Legal tech platforms rigorously vet all attorneys and ALSPs to ensure top-quality talent across North America, South America, and Europe.

3. Gain access to specialized skills

Rather than spend time training staff and/or on-boarding new hires to stay competitive on new technology and other specialized skills, ALSPs enable legal departments quick and easy access to talent with whatever skill is needed. As Reuters notes, 42% of large US law firms are already using ALSPs for advice on legal technology including setting up legal tech infrastructure and managing CLMs.

3. Leverage data

In addition to providing easy access to specialized skill sets, ALSPs also enable firms to leverage experience and data. Say, for example, your company is drafting and negotiating NDAs for the first time. By using an ALSP who may have years of experience on thousands of such contracts, you can use their insights to make their process more efficient and effective. Similarly, integrating generative AI into legal workflows is a goal of 82% if in-house counsels, Thomson Reuters found. But establishing such systems can be costly and hard to navigate. By contracting an ALSP with extensive knowledge of AI infrastructure and protocols, you can mitigate risk while developing proprietary systems.

4. Market agility and adaptation

The last few years have demonstrated just how quickly the market swings from boom to bust, and how rapidly new technologies emerge and government regulations develop. The downside of hiring a full-time employee for a specific technology or specialization in a certain industry's regulations is that they may quickly fall behind the curve. To mitigate this, 50% of US corporate legal departments use hiring platforms to find ALSPs that manage their regulatory risk and compliance to achieve optimal market agility and adaptation. ALSPs can also incorporate shifting regulation, tech, and other variables into commercial contract agreements, making it the largest area of hire on platforms like Lawtrades.

Ultimately, alternative legal service providers are no longer “alternative” avenues for casework, but a major asset to both firms and corporate in-house alike, and increasingly part of core legal operations. As legal departments continue to face "more with less" conditions, ALSPs help maintain quality, efficiency, market agility, and access to specialized talent, all while keeping headcount flexible. The question is no longer if ALSPs can be part of your legal operations, but how best to use them to maximize impact and department performance.

Lawtrades brings you everything you love about ALSP’s with an easy to use platform to make hiring and managing flexible talent a breeze.

  • Get matched to meticulously vetted legal talent with expertise across a wide-range of practice areas
  • Shared team workspace so you can hire together
  • Manage legal spend, work entries, payroll, and invoicing all in one place
  • Enjoy dedicated 24/7 account support

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