Alternative Legal Service Providers (ALSP): A Look at the Value and Benefits

The oft-touted benefits of working with an ALSP (alternative legal service provider AKA law companies, legal services companies, etc.) are lower rates, specialization, and efficiencies. Because of these benefits, use of ALSPs is growing.  Indeed, some predict a 25% growth in outsourced legal services and alternative legal service providers’ market share in the next five years.

The most common legal functions for which ALSPs are enlisted are electronic discovery and document review, due diligence, compliance, investigation support, regulatory response work, and contract lifecycle management.

Here are a few reasons to consider an alternative legal services provider for the right project.

Specialized expertise. The main benefit of engaging alternative legal services providers is access to specialized expertise a law department or law firm may not have. As discussed below, ALSPs rely heavily on technology and project management and therefore deeply understand both. For common or volume legal projects that might benefit from automation, these are helpful skills.

Technology. Another benefit of using ALSP companies is that most heavily leverage technology–not only to get work done, but also for the purposes of tracking metrics and quality control. As an indirect result of the heavy tech-dependency of ALSPs, law departments can rely on them to figure out which tool is best for the job, and also offload the burden of deploying and maintaining software (a task that some legal departments and law firms may not be best suited or may not want to handle).

Efficiencies and Process. ALSPs also use project management techniques, documented workflows, and process automation. Because many of the legal projects they work on are repeatable and high volume, ALSPs are always refining and improving their processes.

Expand the Bench. ALSPs can also be used to “expand the bench” for legal departments and law firms via flex (temporary) staffing, and offloading tasks that are repeatable, or require less legal analysis so in-house counsel and law firm lawyers may focus on “higher touch” legal tasks.

Value. As they say, “money talks” and it is no secret that companies often turn to ALSPs to trim costs.  We were curious to know the real value of using an ALSP and took a look at what we actually saved our clients and customers.

We examined the work we did over an 18 month period for an insurance industry client for which we handle subpoena compliance and managed document review. The results: savings to the tune of almost $400,000.

Savings were realized not only from lower rates (and different types of rates) than those charged by other legal services providers, but efficiencies gained from specialization, technology expertise, and the use of documented, repeatable workflows, and quality control measures.

Here is a handy infographic detailing the savings. (Click here or on the image to download a copy).