ALSPs comprise $10.7 billion of the market for legal services, 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.

Fast-growing

The ‘Alternative Legal Service Providers 2019: Fast Growth, Expanding Use and Increasing Opportunity,’ is published 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 UK research firm, Acritas. The report reveals the two main users of ALSPs, law firms and corporate legal departments, have increased their employment of ALSPs and expanded how they use them. Overall, 74 per cent of corporations surveyed said they use ALSPs in at least one service category, a jump from 60 per cent two years ago. Among law firms, use has become even more commonplace with 87 per cent of large law firms, 81 per cent of midsize law firms, and 57 per cent of small firms surveyed saying they are using ALSPs in at least one service category. Among all law firms, e-discovery, litigation and investigation support, and legal research were the most common uses of ALSPs reported.

Big 4 distinguished

The report also showed the big four accounting and auditing firms are distinguishing themselves as a category unto themselves, and increasingly going head-to-head with law firms for client business, with 23 per cent of large law firms reporting they had lost client business that the firm had expected to win to one of the big 4. The report states ‘while regulatory hurdles prevent [the Big 4] from practising some types of law in jurisdictions like the US, they are increasingly offering a deeper array of alternative legal services to corporate clients,’ and ‘because of their strong C-level relationships with many corporations, the big 4 possess a unique strategic advantage.’ Mari Sako, professor of Management Studies, Saïd Business School at the University of Oxford a report co-author, said ‘in a short period of time, ALSPs have evolved from a relatively unknown phenomenon into a fast-growing segment that is an integral part of the legal services industry.’ She added, ‘ALSPs are expanding the available range of services by combining talent and technology to deliver legal services in modes that best suit their clients’ needs.’