Alternative outdated in legal service provider landscape
The term “Alternative Legal Service Providers” (ALSPs) has been a staple in the legal industry for over two decades, but as the legal landscape evolves, it is worth questioning whether the “A” in ALSP should still stand for “alternative”.
The role of ALSPs in the modern legal ecosystem is continuously evolving, looking hugely different if compared to the point where such providers first emerged onto the scene.
ALSPs emerged as a response to arguable inefficiencies and high costs associated with some traditional legal services. Initially they were seen as somewhat disruptive, offering lower cost and repeatable process-driven services. However, over time, ALSPs have grown to encompass a wide range of services, now working alongside rather than against traditional law firm offerings.
The role of ALSPs in the legal ecosystem
ALSPs offer a variety of solutions that complement traditional legal services. This includes managed services, handling high-volume, repetitive tasks such as document review and contract management.
Legal technology services are also commonly provided by ALSPs to help implement and manage solutions that enhance legal operations. Ensuring legal projects are completed efficiently and effectively, helping organisations manage and optimise their legal expenditures are also popular services provided by ALSPs alongside firms.
Additionally, ALSPs play a large part in the consulting sphere, advising on legal department organisation, technology selection and implementation.
The objection to “alternative”
Many professionals in the ALSP space find the term “alternative” objectionable. In truth it’s just a deeply dated term; these services are mainstream, not alternative, an important part of legal service delivery. As demonstrated by developing services, it is clear and should be more widely accepted that ASLPs increasingly complement rather than compete with traditional legal practices.
Liam Brown, founder of Elevate, coined the term "law company" to differentiate between traditional law firms, in-house legal departments, and ALSPs. While this term hasn't gained widespread use, it is helpful to illustrate the differing perspectives of the burgeoning participants in the legal ecosystem. It highlights the need for a new vocabulary that better reflects the current state of the market.
The term "alternative" suggests a deviation from the norm, but in today's legal market, these services are very much part of the norm. Use whatever term you like – adjacent, efficient, integrated, effective – but not alternative, which is a term that understates the value of the services.
Moving beyond “alternative”
As the legal ecosystem grows, it also becomes more complex. However, the combination of firms and ALSPs allows for organisations to navigate this complexity in a fast, pragmatic way. Specialists have their place, and consolidation and multi-polar providers allow for businesses to gain benefit from a plethora of capabilities as well as effective fee arrangements.
The future of legal services lies in a collaboration where ALSPs, law firms, and in-house legal departments work together in smooth ebb and flow.
That is one reason that a number of law firms have embraced these adjacent capabilities and invested heavily in building their own capabilities – or partnering with specialists – to the advantage of clients.
This ecosystem approach offers a more holistic solution to legal service delivery, providing clients with a comprehensive suite of services. By embracing a new vocabulary that reflects their mainstream status, we can better appreciate the value they bring to the table.
Swapping out the word “alternative” for “adjacent” may therefore be the most fair and reasonable move to ensure organisations are provided with exactly the services they need, from exactly the experts required.
“Alternative” Legal Services – or “Adjacent”?
Whilst we all love a good acronym, there are one or two that provoke at least mild irritation. One such might be ALSP, or “Alternative Legal Service Provider”.
It was a term that evolved as the original Legal Process Outsourcers (or LPOs) and other like-minded pioneers started to diversify from their original litigation support and doc review territory, and to apply similar principles to other areas of law.
It was indeed, at the time, a bit alternative. It implied efficiency, technology, offshoring and scale. It sometimes cultivated something of an anti-Big Law personality, implying a lack of efficiency, lack of enthusiasm for technology, high cost, lack of respect for structure and process from law firms. It was in turn characterised in places as cheap, low quality and lacking professionalism (not just privilege!).
But times have most certainly changed – and it would be a far more accurate representation to switch “alternative” for “adjacent”, reflecting a more complex world requiring a broader combination of skills and capabilities than ever before.
The evolution of “alternative”
20 or more years ago, most legal service needs were met either by the GC and a small in-house team or by their chosen law firm, which mainly focussed on black letter law, transaction execution and disputes.
Over the subsequent period, a swathe of providers has sprung up to both meet those needs and to fulfil the shortcomings of incumbent law firms. To the offshore resource providers, we added technology players, high-quality interim lawyer specialists, managed service providers, and consultants covering everything from organisational design to legal ops to tech integration and more, and now the AI explosion.
It's fair to say that law firms weren’t fast on the uptake. They left space vacant for these unruly insurgents. But, and this is the important thing, these are real, valuable, meaningful capabilities that have already improved the provision of legal services for clients, and are becoming increasingly valuable.
Appreciating “adjacent”?
This is about appreciating that many of the needs of GCs/CLOs, with their growing pressures and increasingly strategic roles, extend beyond pure legal advice and litigation. Far beyond.
Big transactions, day-to-day contracting, the operating of a legal team, understanding risks and exposures, compliance, regulation and disputes including class actions. Growth, new products, new markets, but equally contraction and consolidation, disruption, reacting to world events.
Each of these may need strategic legal advice or guidance, but they may also need execution at scale, organisation and insights. Often they need people, technology platforms and tools, technologists, data geeks, direction, coordination and leadership.
This is “adjacent”. It’s “and”, not “or”. It’s about valuing skillsets beyond the legal, and being able to bring them to bear, in combination with each other, to achieve outcomes. And, yes, about value for clients, but not at the expense of quality.That’s why we dislike the term “alternative”. It suggests optionality, abnormality, oddness. It allows outdated characterisations about quality and capability to go unchecked. It sets legal advice apart from the totality of the legal service that our client needs.
The “Adjacent” Legal Services market
From specialist providers, to multi-polar independents, to the Big Four to the diversification of law firms themselves – and not to forget the appetite of investors – it’s quite clear that there’s a significant change underway.
For many of us who have been close to this, one of the interesting trends is that competitive tensions have changed. A few “alternative” providers still present themselves as an upstart alternative to Big Law, but most recognise that complex problems need multi-faceted solutions and are keen to be part of the solution.
And, to give law firms their (infrequently offered) dues, they’re actually pretty good at this themselves. Many (most?) have embraced (or at least permitted) a wider set of skills in their internal delivery. A smaller number have enthusiastically grasped the nettle of what today’s GCs really need in this complex world and have built meaningful adjacent capabilities alongside their traditional fortes. Collaboration is rife, partnering is productive and normal.
It’s true, there are differing levels of enthusiasm and aptitude. There is still space for niche specialists and law firms focussing on legal advisory services, but increasingly the organisations that look best placed to meet the needs of clients are those with broad capabilities and an aptitude for wielding them in combination.
That is, incidentally, is why Pinsent Masons describe themselves as a professional services business, with law at the core. I like that.