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Lawyers pride themselves on belonging to a profession, a form of work based on long and advanced training. But, over the past two decades, they have been joined by another cohort: Alternative Legal Service Providers (ALSPs), who talk more about being part of an “industry”.

This group, which includes the Big Four accounting firms, focuses on work that falls outside of the complex legal advice given by law firms. Today, however, legal firms of all kinds are expanding their offerings to meet the growing demand for this work, but in different ways.

The ALSPs have had a checkered history to date, and not free from hype. However, Liam Brown, managing director of law firm Elevate, said that if the industry initially failed to reach its initial potential, it was not because of a problem with the “underlying dynamics”. “.

“I’m on my third $100 million venture,” he points out. “The problem is that space entrepreneurs have made outlandish claims about the future.”

The first alternative legal service providers were created in the early 2000s, taking on routine outsourced legal tasks at a lower cost for their clients, primarily corporate legal teams and law firms.

Over the past two decades, this has evolved, with vendors offering integrated solutions to business challenges with a legal dimension. They cover a range of services, from legal technology and data analytics to process reengineering and consulting, and – in some cases – legal advice as well.

ALSPs now come from various types of parent organizations, including original outsourcing companies, legal technology companies, and the big four accountants. Even large law firms have developed their own ALSPs to complement their core legal advisory business.

This makes it difficult to define the current market for alternative legal services, as the term applies to any type of legal enterprise working at the intersection of business and law, outside of the traditional structure of a law firm. .

Participants’ and investors’ estimates of the size of the market vary. The outsourcing segment is valued at $15 billion and the legal technology market at around $20 billion, according to Houlihan Lokey, the investment bank. For others, the potential is even greater. “In three to four years, the market will exceed $1 trillion,” says Tony O’Malley, global legal chief at PwC.

For Big Four firms, the attractiveness of the ALSP market is an opportunity to tap into their substantial resources to combine legal advice, consulting and technology.

At PwC, O’Malley says his ideal project to work on would go beyond simple legal advice and span multiple jurisdictions, and include a technology proposition for large-scale delivery: or 30 countries, that would excite me,” says he.

Michael Castle, Deloitte Legal’s managing partner for the UK and North-South Europe, describes the law firms’ offering as “event-driven advice”. He sees growth potential for Deloitte Legal beyond the lawyer: “There is a whole world [of business outcomes] with which the Advocate General must engage and which requires more than this type of [legal] tips”.

Shahzad Bashir, Managing Director and Founder of Morae Global, a technology-driven legal services provider, is clear about his company’s place in the industry. “We’re not in the practice of law, we’re squarely in the business of law,” he says. “It’s an important distinction – the two can touch each other but we’re not lawyers.”

Brown says Elevate’s role is to help clients streamline their business operations, of which the legal process is a critical part. The company also has ties with law firms to help them provide a more cost-effective service to clients, by offering low-cost legal labor as part of the service.

Gathering all the offers is a challenge faced by all ALSPs. “I want to be the Accenture of law firm managing partners and general counsel,” says Bashir. “There are many vendors who implement technology and contract services, whether in India or elsewhere, and people who put processes in place to make it more efficient. But the solution must be integrated.

Scale is also becoming an essential element of the success of the ALSP. The Big Four legal teams already have it. But, to get it, Morae Global went on a buying spree, hiring change consultants such as Janders Dean in 2020 and ancillary tech deals before securing BlackRock funding in 2021. At Elevate, Brown is on the hunt. looking to raise more capital to grow rapidly.

Changes on the demand side also propel the market forward. “The buying model for clients has shifted towards integrated services,” says Stuart Fuller, global head of KPMG Legal. This has been partly fueled by the growth of data held by multinational corporations, driving the need for more standardized systems. Some ALSPs, such as UnitedLex, have placed a data strategy at the heart of their offer to corporate legal departments.

There has also been a shift in mindset towards ALSPs on the part of customers. At Haleon – the UK consumer health spin-off of drugmaker GSK and one of the FTSE’s 20 largest companies – general counsel Bjarne Tellmann is building the legal department from the ground up. He turned to UnitedLex to help him with flexible people support, using work-taking technology to manage the company’s legal advice requests.

Data is at the heart of this, says Tellmann. Working with UnitedLex early on will help Haleon make inroads to create a future-ready legal department, he says: “If we can connect with other data in the organization, we can create a flywheel effect .

When asked if the term “alternative” is still appropriate to describe this part of the legal industry, Brown laughs. “With the Big Four on the market, we’re working in an ocean, not a pond,” he says. “I’m confident there will be a number of billion-dollar law firms in the next couple of years. Call this alternative? »

Five case studies

When Deloitte Legal acquired law firm Kemp Little in 2020, it doubled its UK lawyer workforce to over 170 and acquired new technology. An example is the intellectual property protection tool Dupe Killer, which is used by luxury fashion brands such as Jimmy Choo. It applies artificial intelligence processes to hunt down counterfeiters: the tool scans images online to detect design infringements and provides customers with an assessment of whether legal action is worth pursuing. Ratings are based on data points, such as the number of page views the counterfeiter has and how that affects the customer’s product over time.

Elevate and Expedia

To free up its legal team to focus on higher value work, the travel booking business is working with law firm Elevate to support the legal operations function. Inquiries and billing reviews are handled by a rotating six-person team at Elevate, allowing the internal legal operations team to focus on projects that require a deeper understanding of the business. The Elevate team also handles approximately 1,000 routine regulatory queries from Expedia per month, which were previously handled by paralegals. The fee the company pays to Elevate is only a fraction of what it saves, thanks to the invoice review service.

Factor and BT

The law firm Factor has worked with BT since 2013. Initially, it was to allow the telecommunications company’s legal team to outsource low value-added tasks, such as the management of non-compliance agreements. -disclosure. But, over time, the relationship deepened. Today, more than 60 Factor lawyers are embedded in BT’s legal team and customer-facing units, where they work on more complex deals related to sponsorship, intellectual property and more. Factor also helped introduce other efficiencies for BT’s legal team, such as self-service contracts and other process improvements to speed time to market.

LOD Group, Syke and Therme

The lean legal team at wellness resort company Therme Group needed to improve their processes to help them scale. The team turned to flexible legal resource firm LOD and legal technology consultancy Syke (the two firms recently formed a partnership to offer combined services). Syke has implemented an intake system for legal work, as well as a contract management system, while LOD provides access to a more diverse pool of legal talent than a small team of permanent employees, allowing the Therme group to respond quickly to changing needs.

PwC and Bridgewater Associates

In 2020, asset management firm Bridgewater Associates began developing new products and expanding into new geographies. Its legal team, already at full capacity, therefore turned to PwC to improve its efficiency and enable the expansion of its activities. PwC and Bridgewater’s legal team worked on an offering to automate the creation and approval of multiple agreements, capturing data to enable continuous improvement. PwC has also hired additional staff in Europe to provide round-the-clock service to the asset management company.

RSGI, a legal industry think tankhave selected the above companies, taking into account third-party market praise and interviews with these companies and their customers.