REUTERS | Ajay Verma

Alternative legal service providers study: key points for in-house lawyers

Alternative suppliers comprise a new and fast-growing sector of the legal market.

According to a study by Thomson Reuters Legal Executive Institute, The Center for the Study of the Legal Profession at Georgetown University Law Center and Saïd Business School at the University of Oxford, alternative legal service providers (ALSPs) now account for $8.4 billion dollars in legal services spend globally.

The report, based on research from over 800 law firms and corporate legal departments worldwide, highlights several themes that in-house lawyers who use or are contemplating using an ALSP should consider.

Use of ALSPs is strong and expected to grow

60% of corporate legal departments are currently using an ALSP in at least one service category. 14% of corporate legal departments plan to use an ALSP in the next year.

ALSPs are being used for more than e-discovery

Corporate legal departments are using ALSPs in specialised areas, including regulatory risk and compliance services, specialised legal advice, legal research and IP management.

Use of ALSPs varies depending on industry sector

Corporates in highly-regulated industries (for example, financial services, communications, energy and pharmaceuticals) are more inclined to use ALSPs for tasks like e-discovery or regulatory compliance.

Motivations for using ALSPs go beyond cost savings

For services such as compliance and legal research, corporate legal departments use of ALSPs is largely driven by a need to access specialised expertise that is unavailable in-house.

Quality of service is a concern

Corporate legal departments cited concerns about quality of service as a reason for not using an ALSP and need convincing about the value proposition relative to traditional service models.

Technology-enabled services will drive future growth

Technology-enabled services for both high-volume and more complex work are expected to deliver value that will drive future growth.

Practical Law In-house Robert Clay

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