The Rise + Rise of Legal Process Providers (AKA ALSPs)

Legal process providers, (also known as ALSPs for some reason….), are doing well – and in fact are seeing steady growth, albeit remaining a small part of the total commercial legal market, a survey by Thomson Reuters has found. Below are three tables that tell us plenty about where things are headed.

Growth

TR data, 2021

As you can see, we’ve gone from just over $8 billion in revenues for all forms of legal process providers/ALSPs in 2015 to around $13 billion in 2019.

That’s approximately a 60% increase in four years. If you were an investor one would look at that growth and say: ‘Wow, this is a market I want to be in.’

The survey also considered the Big Four groups, as well as home-grown groups that belong to law firms/clients, what they call ‘captive LPOs’.

Who is Using Them?

TR data. 2021

As can be seen, law firms are just as big buyers of legal process provider (LPP) services as corporates – in fact, maybe more so – although the sample is not exhaustive.

79% of the law firms in US, UK, Canada and Australia who were asked said they used some form of LPP. Maybe this was for eDiscovery, maybe for M&A doc review, or another aspect of LPP work – but they were using them.

With clients, it’s at about 71%. Though this could be a function of the size of companies questioned.

What Using For?

TR data. 2021

The ‘what use for?’ answers are fascinating – for the law firms it’s to get specialised expertise – or what this site calls ‘specialised legal labour’, and then it’s cost savings. For the clients it’s also specialised labour, but secondly to free up their own labour force to do higher value work. Fourth is to reduce costs on the client side of things.

The last reason for clients is also interesting: ‘To meet peak demand without having to increase our permanent headcount.’ I.e. LPPs/ALSPs as labour supply for demand overflow.

(That said, this site would not include ‘lawyers on demand’ services as primarily an LPP capability, as flexible lawyering doesn’t mean more focus on process, just that lawyers come and go on demand – which is not the same thing. But, you may want to put them under the ALSP banner, if you really wanted to keep using that term, as it’s broader.)

Conclusion:

The future is bright for LPPs and given the current rush of growth that this site has seen, then this is not stopping any time soon. The Big Four’s impact will also only accelerate the change here. AL’s bet is that growth here will increase by double figures year-on-year, at least for the next decade.

You can find the full report here.

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