Alternative Legal Service Providers (ALSPs) are rapidly expanding their footprint to the point where nearly 90 percent of large law firms and three-quarters of corporate legal departments are now using them.  Those are among the findings of “Alternative Legal Service Providers 2019: Fast Growth, Expanding Use and Increasing Opportunity,” a new comprehensive report from Thomson Reuters Legal Executive Institute, Georgetown Law, University of Oxford and Acritas.

ALSPs now form a $10.7 billion market, up from $8.4 billion just two years earlier, with a projected growth rate of 25 percent.  An ALM article today estimates that would make the ALSP market larger than the 10 largest law firms combined within three years.

Corporate and law firm use of ALSPs is growing faster than projected in a previous version of the study conducted two years ago.  Some uses for ALSPs have already exceeded projected targets for the year 2021.  Corporations are both engaging ALSPs directly as well as through outside counsel firms.  Similarly, law firms are both outsourcing work to third-party ALSPs and creating in-house captive ALSPs.

The report also found that as use of ALSPs grows, law firms are increasingly finding themselves competing with the Big Four consulting firms. Nearly a quarter (23 percent) of large law firms say they have had a client use one of the Big Four for work that the law firm had expected to win.