How Managing Partners Can Leverage ALSPs to Drive Business Growth, Client Satisfaction

From evolving client expectations to implementing GenAI and talent recruitment and retention, law firms are facing increasing challenges. Alternative legal service providers (ALSPs) can be game changers for managing partners under pressure.

Having launched one of the earliest ALSPs in 2002, back when it was a nascent sector, I’ve seen firsthand how the market has grown, as well as the strategic ways in which managing partners can drive value from ALSPs.

An Overview of ALSPs

ALSPs offer purpose-built delivery services that perform legal work at a lower cost, providing increased flexibility designed to address the legal needs of any organization.

The ALSP industry is thriving, with an estimated market size of $28.5 billion in 2023 and an 18% compound annual growth rate from 2021 to 2023, according to data from a recent Thomson Reuters report.

Both law firms and corporate law departments are increasingly turning to ALSPs for their “specialized expertise, cost-efficiency, and ability to manage high-volume tasks,” according to the study.

The research also predicted that corporate law departments are expected to increase spending on ALSPs, especially in areas like legal managed services and software. Meanwhile, GenAI will help ALSPs streamline processes, reduce costs and be even more competitive.

4 Key Ways to Leverage ALSPs

There are a myriad of ways to engage with ALSPs for efficiency, growth and competitive advantage, including:

1. Resourcing: ALSPs can support law firms during gaps in coverage, such as during employees’ maternity and paternity leaves, providing a flexible solution for a distinct duration of time.  Managing partners can also leverage ALSPs to quickly scale, such as when a large new client is brought in and there is a need to rapidly expand the team.

2. Legal operations: Law firms should be looking at legal operations and legal innovation as a focus, and it can be helpful to bring in a supplemental resource to do that. By leveraging ALSP talent in legal ops or legal innovation, law firms can gain insight into what systems and legal technology need to be put in place, uncover ways to create efficiency and identify competitive advantage.  Flexible talent can also assist with technology acquisition and implementation. Firms can bring in talent that can advise on tech procurement, even sitting in on legal tech demos and giving feedback on these options.

3. Expanding service offerings:  Firms can engage ALSP talent with specific expertise, white labeling their services and putting the option in front of clients as another line of business, which can support new client acquisition and expansion of scope with existing clients or the movement into new client segments. The optics of a law firm offering an expanded and more cost-effective option to their clients can have a meaningful impact from a marketing standpoint.

4. Tapping into new client bases:  Flexible talent can also help firms tap into new client bases, such as offering services to startups, as the flexible talent option may make possible a more cost-effective, lean legal services option. Plus, by building relationships with companies at early stages in this way, firms secure footholds into new client relationships which they can then support with more traditional, full-scope services as the companies grow.

Preparing for Flexible Talent

For managing partners ready to work with ALSPs, here are a few best practices to prepare for your engagement with flexible talent:

1. Identify your needs: Clearly define the skills you are looking for, including the level of experience essential for the role.  
2. Determine who will be your internal liaisons to manage flexible talent: Create a system for reporting.
3. Create a process for onboarding: It is imperative to provide adequate training on your processes and systems. 
4. Get in front of tech procurement: Communicate what will be needed to support your flexible talent acquisition.
5. Budget properly ahead of time: Once resources are on board, you might want to have those resources continue and it will be easier to have the budget already prepared rather than having to adjust later. 
6. Make your flexible talent feel a part of the team: Integrate them within your organization including in meetings and retreats to build team and relationships. 

Going Forward 

ALSPs are not just a resourcing model; they are a way to differentiate your firm and a powerful tool for competitive advantage. 

By engaging with ALSPs, managing partners can stay ahead of challenges, strategically augment their teams, enhance value, efficiency, speed, and agility, and pass these benefits on to their clients—ultimately driving business growth.