New study co-authored by Mari Sako has found that nine out of ten large law firms are now using alternative legal service providers (ALSPs).
The study, entitled ‘Alternative Legal Service Providers 2019: Fast Growth, Expanding Use and Increasing Opportunity’ is a joint initiative by Thomson Reuters, Georgetown Law, Saïd Business School and Acritas. It demonstrates that ALSPs are growing faster than predicted; they now make up a $10.7 billion market for legal services and are projecting a growth rate of 25 percent over the next few years.
The use of ALSPs were found to be commonplace among law firms at all levels with 87 percent of large law firms surveyed said they were using ALSPs in at least one service category. Eighty-one percent of midsize firms and 57 percent of small firms were found to be doing the same. More than half of law firms surveyed said that ALSPs can help them expand and scale their business, differentiate their services, and retain client relationships.
Corporate use of ALSPs was also found to be growing at a faster rate than predicted, particularly for services such as litigation and investigative support, document review, and even specialized and high-value services such as legal research. In some cases, growth has already met or eclipsed five-year projected growth rates in only two years.
In all, 74 percent of corporations surveyed were found to be using ALSPs in at least one service category. Corporations were shown to be using ALSPs both directly as well indirectly through outside law firms, with an increasing number of corporations reporting internal pressures to use ALSPs to reduce legal expenditures.
Sako, Professor of Management Studies, remarks: '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.'
'ALSPs come in many different shapes and sizes, from independent LPOs to well-backed parts of industry behemoths. They are expanding the available range of services by combining talent and technology to deliver legal services in modes that best suit their clients’ needs.'