law departments
law departments

The market for alternative legal services is growing dramatically, new report shows

In our biennial report on the ALSP market, we find a sector that has grown exponentially over the past two years and is making great in-roads with both law firms and corporations

The market for alternative legal services providers (ALSPs) is showing itself to be a highly dynamic part of the overall legal ecosystem and one that is growing at an increasing rate as it forges new paths to serving both traditional law firms and corporate law departments.

Indeed, ALSPs now comprise a $20.6 billion segment of the legal market, according to the Alternative Legal Services Providers 2023 Reportpublished today by the Thomson Reuters Institute, the Center on Ethics and the Legal Profession at Georgetown Law, and the Saïd Business School at the University of Oxford.

The biennial report shows that ALSPs experienced a compounded annual growth rate (CAGR) of 20% from 2019 to 2021, a significant jump from the 15% CAGR recorded between 2017 and 2019. Overall, it reveals an evolving legal market in which the boundaries between alternative legal service providers, law firms, corporate law departments, and even technology and software firms are rapidly blurring.

“Both law firms and in-house counsel are increasingly seeing the value of alternative legal service providers,” said James W. Jones, a senior fellow at the Center on Ethics and the Legal Profession at Georgetown Law and the report’s lead author. “Meanwhile, ALSPs are expanding the services they offer to law firms and corporate law departments by providing specialized services, improving cost efficiency, and delivering greater flexibility in headcount.”

A dynamic market

While independent ALSPs are the largest segment of the market, representing 87% of all ALSP revenue, captive ALSPs — those owned by law firms — are a smaller segment, but it’s also the fastest-growing, posting a six-fold increase since

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