2021 Highlights: Accelerated Growth of Alternative Legal Service Providers
With only a few days remaining in 2021, Legal Current is looking back at the milestones and key accomplishments from the Legal Professionals business of Thomson Reuters. Today we revisit findings of the Alternative Legal Service Providers: 2021 Report, which found that ALSPs expanded to achieve a nearly $14 billion market share globally this year.
The report noted ALSPs are a mainstream segment of the legal market as law firms and corporate legal departments have become increasingly open to partnering with ALSPs to stimulate growth and reduce costs.
ALSPs are “increasingly becoming the norm,” as Kevin Penton explained in Law360: “Law firms have taken notice of a segment used by 79% of law firms themselves and by 71% of corporate law departments, creating their own “captive” providers, either as internal units or as subsidiaries. Captives generated an estimated $480 million in revenue in 2019, a 60% increase in just two years, according to a recent report by the Center of Ethics and the Legal Profession at Georgetown Law and the Thomson Reuters Institute.”
Global Legal Post also noted that as the market has matured, “ALSPs also increasingly take umbrage with being referred to as alternative providers, with many independent firms preferring to call themselves law companies.”
In Law.com, Dan Packel’s coverage emphasized the market expansion: “While the Big Four and ALSPs not tied to law firms make up the majority of the ALSP market, law firms’ captive ALSPs—units within the law firm that use different personnel to provide ancillary services—saw the most growth from 2017 to 2019. The report noted that captives commanded a $480 million share of the market at the end of 2019, which means they grew over 30% a year from their $300 million in 2017.”
Lawyer Monthly recently discussed the report findings and predicted: “Alternative Legal Services is a pre-pandemic trend that has continued to gain momentum throughout 2021 and is set to gain even greater momentum in 2022.”
Read the full ALSP report here, and watch for the 2022 State of the Legal Market report in January for more on the trends shaping the legal industry.