The noise around Alternative Legal Services Providers has reached a fever pitch. Sifting through what the actual market trends are v. what is purely the speculation of market pundits can be an overwhelming undertaking.
Acritas’ newest research with more than 1,300 buyers of legal services takes away the guesswork and homes in on exactly how companies are changing their use of (and spending with) ALSPs—and what’s not changing as expected.
As we head into the holiday party season, I thought it might be fun to play the popular party game: Two Truths and Lie for the ALSP market. Here are your three statements:
- More clients are using ALSPs than five years ago
- Clients are increasing their spend with ALSPs
- ALSPs are gaining market share in the legal services market
Can you guess which are the truths and which is the lie?
Statement: More clients are using ALSPs than five years ago
The market is clearly warming up to using an ALSP to help manage certain aspects of their legal work. In 2014, only 31% of companies were using an ALSP. As of 2019, this number reaches nearly 50% of large corporations.
This impressive five-year growth shows ALSPs are overcoming one of their biggest hurdles in the market: simply getting legal decision makers to turn outside of a traditional law firm. While all types of ALSPs are seeing more clients, the biggest growth areas are with the Big Four and flexible legal talent platforms.
Statement: Clients are increasing their spend with ALSPs
False. Kind of.
On average, spending with ALSPs has grown nearly 10% over the last five years. But that stat alone doesn’t tell us the whole story. When we dig into our analysis, we found that not all companies are increasing their spend on ALSPs. The biggest spenders on legal services are spending more with ALSPs while other organizations are actually decreasing their spending (but only slightly).
This doesn’t give traditional law firms more room to breathe though. As with many market disruptions, the most sophisticated (and highest) spenders increase their spend and investment first while the rest of market plays catch up.
Statement: ALSPs are gaining market share in the legal services market
Although spending with ALSPs is only seeing slight growth, there’s no ignoring the impact on their total share of legal market spend. ALSPs account for 9% of total spend with external providers. This is an increase of 80% in just five years.
So, how’d you do? Did you guess the lie?
The ALSP market is evolving fast and how clients rely on these providers is evolving even faster. See all the latest trends—broken down by region—in Acritas’ newest report.
This report is available to purchase exclusively for a fee of $2,500/£1,900 and will be delivered upon receipt of your order confirmation via email. You will also have the opportunity to book in a 30-minute call with an Acritas analyst to answer any queries you might have around the report.
Simply email Jen Dezso at email@example.com or complete the form below to express your interest and a member of our team will be in touch.