
A new survey and report by Thomson Reuters (TR) and Georgetown Law has provided plenty of great data on the growth of ALSPs, and which begs the question: are ALSPs that can embrace genAI set for a Golden Age? Or will AI undermine the reason they exist?
Let’s look at some of the data.
First, TR estimates – and it’s important to stress that it’s an estimate, plus it only goes to 2023, which is before genAI tech really started to get traction across the legal world – that the ALSP market is growing and that it totalled around $28bn two years ago, with the majority of this as managed services, plus flex legal services, with $1.8bn of this from law firm captives. They’ve also added in consultancy and software services, which account for a significant fraction.
Overall, this is a big rise on 2021, when the total was estimated to be around $20bn. And a huge rise on 2015 when it was around $8.5bn.

In short, demand for ALPSs is growing…or has been up to 2023. But then, the legal market as a whole is growing on a global basis, and there are certainly more legal and compliance demands on corporates than ever before. So, that counts in this equation.
That said, this is still a clear growth trend. The survey also found, as expected, that cost is a key factor in using ALSPs – which of course is what they were designed to provide. Work on eDiscovery and compliance were also predictably important areas for these businesses.
But most importantly is the finding that corporate legal teams believe that the biggest change for them will be bringing in more work inhouse, at 42%; with then a drop in work sent to law firms, as seen in terms of spending.

But, ALSPs were not a big winner here, with just 16% saying they’d be spending more on external process groups of this type. Now, that’s hardly the start of a golden age. In fact, if anyone should be opening the champagne it’s recruiters for inhouse legal teams, which look set to keep on growing.
AI’s Impact?
Now onto AI, or genAI, which can – with the right tooling and legal tech support – be a huge accelerator when it comes to things like doc review, especially for the high frequency docs that many inhouse legal teams witness every day. It’s also having an impact on the staff needed for eDiscovery tasks.
The question is: will ALSPs embrace AI and in effect disrupt their own business model? I.e. some ALSPs do work based on the billable hour, just like law firms. And likewise, AI will just speed that process up, hence less human review work per matter.
Moreover, CLM, contract AI, and contract management companies have been all over this space, selling to inhouse and in some cases doing deals with ALSPs. E.g. KPMG’s legal process arm is working now with ContractPodAi, the CLM company.
With all in that in mind is AI going to change things?
The data shows that 44% of inhouse teams felt AI meant they’d use ALSPs more. And given that cost is a key factor in using one, therefore this suggests they believe they will get the same results for a lower price, or perhaps even better results for the same. That said, the other 56% surveyed didn’t see it as a big deal.

Conclusion
On face value, this shows that ALSPs are growing, despite signs that some of the Big Four are actually losing their commitment to the ‘body shop’ managed legal services approach.
Also, if there is notable change in the inhouse world it’s the belief that they will grow their own teams and perhaps use law firms less. And that doesn’t help ALSPs much either.
When it comes to AI…..in some ways it’s too soon to say. It’s really across 2025 and into 2026 where we will see which ALSPs really disrupt their human labour model and embrace AI. For now, it’s not clear anyone aside from groups such as KPMG (along with its plans for Arizona), and companies such as Epiq, are openly talking about AI and ALSPs as a core strategic move.
Note: there are others out there who are also exploring putting AI at the front of their strategy, but they have not gone public with their plans yet. So, perhaps this year the picture will clear.
The one thing that may really change the picture though is this: what if inhouse teams really adopt lots of AI capabilities (which a recent LegalOn survey suggested is starting to happen)?
If inhouse teams really got control of the local means of production by leveraging AI for contract review, then that work would not need to go to ALSPs, of any type. (Or law firms.)
On the eDiscovery side, one would expect this to go out still for independence reasons, but perhaps compliance work would also stay inside the company.
So, the irony is that AI may in fact end up undermining the business case for a lot of what ALSPs do, though they’d keep doing their consulting and flex lawyer provision.
Finally, it could go the other way: ALSPs might use AI at scale for doc review, really drop their prices and make it almost impossible for inhouse teams to keep that process work inside, as the cost differences are so huge.
ALSPs have their own future in their hands…..
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Editorial by Richard Tromans, Founder, Artificial Lawyer. Thanks to TR + Georgetown for the great data. The full report can be found via TR ‘Alternative Legal Service Providers – 2025‘.