Alternative Legal Service Providers

What are they and what benefits do they offer?

Have you ever been curious as to what goes on in the minds of other legal practitioners? Have you ever wondered whether you measure up?

It’s only natural, after all it’s human nature to be curious about the world and the people around you – how do they do what they do?

With that in mind, join us as we investigate frequently discussed topics, with the aim of discovering innovative approaches to the practice of a law in an ever-changing and evolving world.

Take this blog’s topic – alternative legal service providers – what exactly are alternative legal service providers? And what benefits do they offer?

What are alternative legal service providers?

Alternative legal service providers (or ALSPs) are simply an option outside of the traditional law firm model, where lawyers can be found working in senior roles alongside legal technologists, analysts, and project managers. They are often seen as “niche companies,” specialising in providing high-demand legal services.

Once seen as direct competition against traditional law firms (for corporate clients), that view has all but fallen by the wayside as even law firms now contract with or create their own ALSPs to offer more legal services at better prices.

In addition, while traditional law firms are critical for handling high-stakes and complex matters, ALSPs fit into a cost-conscious legal department’s overall engagement strategy. ALSPs can be extremely efficient at doing certain kinds of work and are deployed at a much lower cost than law firms.

In reality, there are as many different types of ALSPs as there are lawyers — from solo document review professionals or other speciality service offerings in specific practice areas, (making their expertise and honed processes even more valuable to in-house teams) to large audit firms with legal consulting departments.

ALSP’s are also considered to be agile early adopters and innovators for cutting-edge technologies such as artificial intelligence, block chain, predictive analytics, and smart contracts. They are therefore in the perfect position to utilise legal tech in a way that best serves their clients -  for example for e-discovery, legal research, regulatory risk and compliance services, areas where legal tech is needed the most. And by doing so, can advise on legal tech, by having their finger directly on the pulse.

What factors have contributed to the growth of ALSPs?

Several factors have contributed to the growth of ALSPs –

1. Accessibility – most ALSPs operate online, providing clients with 24/7 access to legal services. This accessibility appeals to individuals and small businesses seeking quick legal solutions without the need for lengthy appointments or billable (read expensive) phone calls.
2. Demand for alternative services – many of the clients seeking out legal services simply couldn’t afford to hire a traditional law firm and thus are searching for an alternative means of getting legal support. By offering flexible solutions that go hand-in-hand with law firms, those that cannot afford expensive legal fees have a chance at attaining the legal support they need at a reduced cost.   
3. Technology and innovation - advances in legal technology – of which ALSPs are early adopters – have paved the way for ALSPs to offer innovative services. Tools like artificial intelligence (AI) and automation enable ALSPs to handle routine legal tasks efficiently and with fewer errors. Legal tech has not only broadened the availability of legal services but has also enabled ALSPs to provide them faster and at reduced costs.

What services do ALSPs traditionally offer?

ALSPs tend to be niche companies that specialise in one or more legal tasks. These tasks usually need a certain measure of legal know-how and are in huge demand due to their labour-intensive character and frequent need.

ALSPs will sometimes offer other outsourced services under custom circumstances. ALSPs break down the different services depending exactly on what the client wants. Generally speaking, these services include –

1. Contract management;
2. Document drafting and review;
3. Legal research;
4. Accounting and audit tasks;
5. Intellectual Property (IP) or Data Protection management;
6. Litigation support, like discovery and electronic or “e-discovery”.

What are the benefits of ALSPs?

ALSPs can provide organisations that are looking to cut costs with a versatile option for managing their legal affairs. This flexibility and adaptability make ALSPs an attractive choice when shopping around for legal service providers who are able to optimize their service offerings. The other benefits of using an ALSP are as follows –

1. Cost effectiveness – with the help of process automation tools, ALSPs can manage repetitive and labour-intensive tasks more efficiently, with fewer errors, and at a reduced cost. Many ALSPs also offer a flat fee billing structure for projects. Legal teams benefit from a more predictable cost structure and easier budgeting in those cases.
2. Flexible service model – ALSPs offer a middle-ground solution, bridging the gap between in-house legal work and outsourcing to law firms. This flexible business model allows companies to choose the most efficient and cost-effective option for their legal needs.
3. Scalable services – in-house legal teams can engage with ALSPs for specific, short-term projects or they can enter a long-standing relationship to manage ongoing repetitive or labour-intensive legal tasks. This adaptability allows in-house teams to scale their capacity when workloads surge without adding headcount that may not be required at a later stage.

And this is only the tip of the iceberg. ALSPs aren’t going anywhere. Not only are they here to stay but their popularity is growing. Why people may ask. Well, this could be because of the advances in tech which necessitate that the legal service providers that use the tech advance how they use the tech too – being at the forefront of what’s next, the demand for affordable legal services, and the need for innovative business models.

And ALSPs represent all of this.

ALSPs offer a range of services that enhance accessibility to legal services together with efficiency, posing both challenges and opportunities for traditional law firms – if law firms can take the time to better understand and adapt to these changes, being more willing to explore collaborative opportunities with ALSPs, law firms can stay competitive, and continue to meet client needs effectively.

– Written by Alicia Koch on behalf of AJS

(Sources used and to whom we owe thanks: Brightflag; One Legal; Bigle Legal and Amata)