Blog Post

5 Steps to Getting Started with the New Era of ALSPs

February 23, 2023

Corporate stakeholders and members of the legal department meet to discuss essential points for getting started with today’s ALSPs.

Alternative legal service providers (ALSPs) were born out of the increased demand for legal services in our highly regulated state, changes in how people work, and the simultaneous development of helpful technology. Despite their value, legal departments struggle to identify when and how to engage an ALSP. Struggle no more as we break down some of the most overwhelming reasons your department is ready to start shopping for an ALSP and the value proposition of doing so.  

Key Takeaways

  • Thanks to the growth and maturity of the ALSP industry, legal departments are in a prime position to benefit from them like never before.
  • Define your legal department’s needs when getting started with an ALSP to narrow your search for qualified candidates.
  • Prioritize ALSPs that have a proven ability to scale with the needs of your legal team and offer holistic solutions that create value for chief legal officers as strategic business partners.

Why Now is a Perfect Time to Hire an ALSP for Your Legal Department

The last two decades have been a transcendent period for legal work because of the evolution of legal operations and the increased costs of hiring outside counsel. Born from this evolution were the legal process outsourcing (LPO) industry and the notion of “doing more with less.” 

Periods of growth and maturity in the LPO industry quickly gave way to that ideal, as groups in the space developed into the modern ALSP. Today, ALSPs are an effective solution for many of the needs of legal departments that don’t sacrifice quality at the expense of cost. 

How is that possible?

Advances in technology, an appreciation for data analytics, and the refinement of legal operation processes are the primary drivers that make ALSPs a preferred outsourcing option. These attributes, combined with the development of legal specialists with diverse skill sets, place today’s ALSP on a competitive footing akin to the big four accounting firms and other legal process servicers. 

Hourly Rates for In-House Counsel

Hourly rates for outside counsels continue to climb in the U.S., making ALSPs a cost-effective option for corporate legal departments.
Hourly rates for outside counsels continue to climb in the U.S., making ALSPs a cost-effective option for corporate legal departments.

Now, many ALSPs exist, each with the potential to serve one or more purposes in the LPO space. It’s an amazing time for general counsels, chief legal officers, or other executives to find an effective ALSP. However, the challenge moving forward is navigating the process of hiring an ALSP that maximizes legal spend and transforms your legal department into a strategic business partner.   

5 Steps to Take When Choosing an ALSP 

Consider the following action items to empower your decision-making when choosing an ALSP.

1. Determine the Scope of Engagement for the ALSP

Figuring out the needs of your legal department will help refine your pool of potential ALSPs and better distinguish comparable outlets. 

Some ALSPs have broader service offerings than others, which might make it valuable to anticipate the scope of engagement before making RFPs. For example, the difference between needing immigration compliance help (a niche service) versus a more general service, like document review for commercial litigation. 

When you have multiple legal operations to fulfill, you will be looking for a well-rounded ALSP that acts more like a strategic partner than a disconnected center for offloading extra work.

2. Don’t Overlook an ALSP’s Ability to Scale for Tomorrow’s Needs

Even if you have a single purpose in hiring an ALSP, consider the ALSPs ability to scale with your future. It’s not uncommon for legal departments to quickly enter the ALSP market when a new process comes into play, or you need to compensate for sudden labor shortages that force you to outsource. Being able to move quickly on hiring an ALSP shouldn’t be a problem, and that flexible design should be a key feature of the modern ALSP.

Video Quote: 

“There are ALSPs and law firms. Today many law firms are now offering ALSP services within the foundation of the law firm. Just as many, “ALSPs” are offering more traditional legal services. We need to stop looking at it as traditional vs. alternative – but rather as a redefinition of the legal eco-system.” 

Take out the “Alternative” Out of ALSP Providers –

However, moving quickly without reviewing an ALSP’s ability to scale with your team can later create redundant and unnecessary issues. First, you will likely have to review and onboard a new ALSP, at the expense of doing other productive work. Second, you may find your department paying the administrative cost of managing multiple ALSPs when you only need one. 

3. Consider the Holistic Needs of the Legal Department and Its Stakeholders

The early versions of ALSPs were strictly focused on being an outsourcing option for standard processes applicable to all corporate legal departments (e.g., document review, due diligence, or project staffing). While these offerings may help to reduce costs, you deserve an ALSP that generates holistic value for your team and c-suite. Beyond traditional offerings, some services that are a key part of an ALSP’s ability to drive value might include:

  • Legal spend consulting and e-billing services.
  • Contract management (including installing operational controls and providing data analytics on your portfolio). 
  • Other legal administration (e.g., knowledge management, legal needs forecasting, strategic consultation) 
The Enabler vs. The Enforcer

4. Designate Liaisons Between Your Corporate Legal Department and the ALSP

When starting with an ALSP, think about and designate your points of contact between the ALSP, members of your legal department, and potentially, your broader corporate structure. 

Consider their input during the RFP process and develop contingency contacts should the need arise. The number and depth of your legal department’s liaisons will depend on the services you want the ALSP to provide. 

For example, an ALSP focused on legal administration and spend management consulting might only require a single point of contact with the GC or chief legal officer. Engagement for services like contract management or regulatory compliance might necessitate several liaisons across multiple disciplines (e.g., senior-level GCs, sales team managers, HR leaders, and operation directors).

5. Review the Backgrounds of Legal Specialists and the Technology Used Within the ALSP

Like your legal department, effective ALSPs depend on the skills and commitment of the people who run its operations. The following factors could be useful in evaluating the personnel behind an ALSP to ensure they can complement your corporate legal department:

  • Education 
  • Prior experience
  • The presence of diverse and robust skills beyond legal qualifications (e.g., accounting, IT)

Compatibility is also critical for the underlying technology an ALSP uses to derive benefits for your legal department. Ask questions about integrations with the different technology platforms involved for various operations of the ALSP and understand the total cost of that integration. 

Don’t Let Your Legal Department Fall Behind the New Wave of ALSPs

Successful ALSPs, like Exigent, continue to leverage the power of improved technology and expert management to boost the workflows and strategy development for legal departments on a global scale. Changes in the legal industry, like the continued migration of legal talent and the higher costs of outside counsel, make having a reliable ALSP on your team a priority. Explore how Exigent can improve your legal operations today and cement your position among corporate leadership as a strategic business partner.

Schedule a consultation with us today. 

About the Author:

Exigent is an Alternative Legal Services Provider (ALSP) breaking industry boundaries and raising the bar for data-driven decision-making. With a powerful combination of technology, legal expertise, and business acumen, Exigent creates expert solutions that drive better legal and business outcomes for law firms and corporations.

Exigent delivers scale, expertise, and insights that generate bigger returns for CLM – Contract Lifecycle Management, Legal Spend Management, e-Billing, Due Diligence, Document Review, eDiscovery and Litigation Support, Commercial Services, Regulatory & Compliance, Outsourced Legal Administration, and  Legal Tech Design. 

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