According to the 2023 edition of the biennial report on Alternative Legal Services Providers published by Thomson Reuters Institute, the Center on Ethics and the Legal Profession at Georgetown Law, and the Saïd Business School at the University of Oxford, the ALSP market has “grown exponentially” and made “great in-roads” with corporate legal departments and law firms. “The market for alternative legal services providers is showing itself to be a highly dynamic part of the overall legal ecosystem and one that is growing at an increasing rate as it forges new paths to serving both traditional law firms and corporate law departments,” says the report, which is based on an online survey of decision-makers at law firms and corporate law departments in the U.S., UK, Canada, the EU and Australia. The maturing ALSP sector now accounts for a whopping $20.6 billion segment of the legal market, and the growth path is accelerating – to a compounded annual growth rate (CAGR) of 20% from 2019 to 2021 from its already robust 15% CAGR between 2017 and 2019. “Both law firms and in-house counsel are increasingly seeing the value of alternative legal services providers,” says lead report 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.” Not only is the ALSP market a growing market, it is a dynamic market, according to the report, which notes that while independent ALSPs, the largest segment of the market with 87% of ALSP revenue, ALSPs owned by law firms — so-called “captive ALSPs — are growing fastest, with a six-fold increase since 2015. This growth is unlikely to slow, according to the report, given the aggressive exploration by law firms and corporate law departments of ways to better utilize ALSPS in their own legal work, especially as consultants on legal technology. “ALSPs are demonstrating value in helping law firms identify and implement the right technology solutions as well as providing training and support,” says Michael Abbott, head of the Thomson Reuters Institute. “The ALSP market increasingly includes software companies and providers of comprehensive legal technologies.” Read more from the ALSP report at Thomson Reuters Institute.
ALSPs: Zooming into Hyperdrive
