Alternative legal service providers (ALSPs) are steadily making headway in the legal market, but far from chipping away at the share of legal work, they're creating valuable opportunities for both law firms and in-house counsel.
Allegory's Alma Asay joined a panel at January's Legaltech on " The Changing Makeup of the Legal Marketplace and How Legal Work is Getting Done" to share her take on the role ALSPs play.
David Curle, Director - Market Intelligence, Thomson Reuters Legal
Alma Asay, Founder & CEO, Allegory Law
Andrew D. Gladstein, Associate, Schulte Roth & Zabel LLP
David Holmes, Executive Director, Assistant General Counsel, JP Morgan Chase & Co.
The 2017 Alternative Legal Service Study
David Curle, Director of Strategic Competitive Intelligence for Thomson Reuters Legal led the panel, presenting the results of the 2017 Alternative Legal Service Study, undertaken in partnership with Georgetown Law Center for the Study of the Legal Profession and the University of Oxford Saïd Business School.
The comprehensive study surveyed over 800 law firms and legal departments to understand the various ways ALSPs fit in the legal market. Curle encouraged the audience to see ALSPs as more than just a way to cut costs and labor, citing the benefits of access to technology and expertise.
Key insights about ALSP use
More than half of law firms and corporate legal departments are already taking advantage of ALSPs, with more planning to use them within the next year.
Law firms mainly use ALSPs for e-discovery, document review and litigation support, and investigation. Litigation and investigation support, in particular, are on the rise, expected to be the third most used category of ALSPs within the next five years.
Corporations, on the other hand, have adopted ALSPs more broadly. Legal departments also rely on ALSPs to serve specialized needs such as regulatory risk and compliance, legal research, and IP management.
The benefit of ALSPs
According to the study, one of the top 5 reasons law firms use ALSPs is to improve profit margins. This differs from the traditional thinking that ALSPs are a competitor taking away business from law firms.
Curle emphasized, however, that the ALSP market serves a greater need: access to specialized knowledge.
Why do we need to understand ALSPs?
Such a comprehensive report is long overdue. Panelist Andrew Gladstein pointed out that rules guiding the use of ALSP were drafted in the 70's and were not designed for the modern legal industry which handles terabytes of information.
While experts like Curle have been using ALSPs since 2009, few leaders in legal have such knowledge and experience. According to the report, one of the main reason law firms and legal departments lag behind in ALSP adoption is a lack of knowledge about the range of vendors and services available. Concerns about data security and quality of service were also a factor.
Educating the legal market not only helps law firms and legal departments with their purchasing decisions, it also informs vendors and services providers of unmet needs and potential opportunities.
Advice for working with ALSPs
Drawing the conversation to the specifics of implementation, Alma Asay suggested that for law firms or legal departments to successfully work with ALSPs, it is important to define tasks clearly. This is especially important when ALSPs are helping counsel branch out to projects outside their normal scope.
Just one of the many benefits of working with ALSPs is that they "help with inputs so that users can focus on output." As in the case of Allegory, instead of spending hours uploading and organizing information, software frees up litigation teams to focus on the lawyering that corporate clients are paying for. In this way, working with an ALSP can improve the value chain from end to end.