No Longer Alternative: How ALSPs Positioned for Growth During the Pandemic and Covid-19 Beyond

While the Covid-19 pandemic has changed how many operate and work around the globe, for captive Alternative Legal Service Providers (ALSPs) like Herbert Smith Freehills’ Alternative Legal Services (“ALT”) practice, the shift was seamless. The global team had rolled out a cloud-based e-discovery platform in 2019, preceding the pandemic, which enabled the team to thrive.

But what exactly are captive ALSPs, and how are they helping to lead the industry forward with the right technology and solutions to service client needs?

What are ALSPs?

Alternative Legal Service Providers (ALSPs) provide services that deal with the aspects of legal matters or processes that are data or document heavy or routine or repeatable in nature, and that can be streamlined and made more efficient using the right combination of people, process and technology.

ALSPs provide services that apply broadly across different practice areas. In connection with contentious legal work, ALSPs provide a wide array of services, including e-discovery support, data management, and volume claims management. In the transactional space, ALSPs provide support for heavily papered deals, repeat commercial contracting or mass contract amendments following a regulatory change. ALSPs can also act as an extension of in-house counsel, finding ways to use technology to solve client’s day-to-day pain points, including by developing bespoke solutions.

There are a number of players in the ALSP space, most common among them are law companies (which employ lawyers but are not traditional law firms), LPOs (Legal Process Outsourcers), pure technology companies, and the Big 4 accountancy firms. “Captive ALSPs” operate within law firms and form part of an end-to-end service to clients. The Alternative Legal Services (ALT) practice group within Herbert Smith Freehills is an example of a captive ALSP, comprised of roughly 350 lawyers and technologists across 11 of the firm’s 26 international offices.

The benefits of captive ALSPS

While originally deemed “alternative,” ALSPs have become a commonplace source of support for law firms and in-house legal departments. The work they do is not a substitute for legal advice provided by specialists lawyers. Instead, these ALSPs create opportunities for greater efficiencies in the way firms deliver traditional client services and they allow firms to provide a broader suite of services directly to clients. ALSPs have experienced rapid growth over the past ten years largely driven by clients who are expecting more in the way of innovation and efficiencies in the delivery of legal services. As a captive ALSP, we often see the need for innovation and greater efficiencies developing in real time and in turn we are developing solutions.

Captive ALSPs are moving the legal industry forward in a variety of ways, including:

1. Their focus on high-volume, data-intensive, and repeat legal work allows traditional legal teams and in-house legal departments to focus their attention on higher priority work.
2. Their placement within law firms positions them closer to specialist legal teams, which has numerous benefits for clients. For large disputes matters, ALSP technologists and lawyers are able to collaborate early on with legal teams, which supports a more efficient e-discovery process. For truly urgent work, the often time-consuming process of engaging an external ALSP can be avoided entirely. For clients with repetitive work – in disputes or the transactional space – captive ALSP teams combine institutional knowledge, technology and process to create templates for similar work in the future. The captive ALSP often has a more comprehensive understanding of a client’s business needs and its systems to help develop tailored solutions.
   
3. The offering includes a blend of specialized legal expertise and technical acumen that positions them as the link between the law firm and third-party vendors who provide technical services the firm itself may not offer. This fosters close collaboration between a firm and other legal technology providers, ensuring the correct resources work on each matter.
4. Captive ALSPs are the perfect testing ground for new technology within law firms and are often at the forefront of digital transformation efforts. As technology continues to rapidly evolve, law firms are beginning to pilot cloud-based solutions.

ALSPs and Covid-19

Before the pandemic, captive ALSPs invested heavily in technology to build robust systems and solutions designed to handle the toughest challenges. Those investments were often part of law firms' digital transformation efforts. As such, captive ALSPs were uniquely positioned to handle the volatility and uncertainty thrust upon businesses when the pandemic took hold.

For example, in 2019, after years of investment in its technology, HSF’s ALT practice group rolled out a global and scalable cloud platform, which was designed to support the firm’s legal teams wherever they are located and irrespective of data size. The platform provides demand-driven scalability, high-speed data transfers and processing capabilities designed to handle large data volumes. It also provides a single point of access for global teams and clients, with multiple layers of security and user-permissions that can be adapted for different regional teams. The platform’s launch was in motion before the Covid-19 pandemic took hold, but turned out to be a perfect design to solve the incredibly difficult technological challenges caused by the pandemic.

Indeed, electronic transfer of data has now become the norm, which positioned outside counsel ideally to gain access to crucial information more quickly than the more common pre-pandemic approach of placing data on physical media for shipment. Within ALT, the Covid-19 pandemic confirmed that the investment in cutting-edge technology, high-caliber lawyers, and first-rate technologists positioned HSF's captive ALSP to thrive amid uncertainty.

One of the key objectives of rolling out a global cloud platform was to provide clients with 24/7 e-discovery service delivery using a follow-the-sun approach. But doing this required not only technology, but also collaboration across ALT’s e-discovery hubs in the US, UK and Australia. Connecting people was key to the success of the tech. And this was perhaps one of the surprising benefits of the remote working that came along with Covid-19; when the pandemic removed the office's physical barriers (and borders), it immediately fostered closer collaboration within teams across multiple offices. Having been plucked from our actual offices, it felt as though everyone was suddenly in the same remote room and truly global working became the norm.

What’s next?

With the pace at which technology is evolving and being accepted within law firms, the future of captive ALSPs is bright. The experience of being a captive ALSP during the pandemic has been informative in that sense; specialist legal teams adapted to using technology in new ways. However, technology is just one aspect of what drives the success of a captive ALSP. While we expect innovation in legal technology to continue apace, it remains business critical that the right people and processes are also in place to most efficiently make use of the tools available to them. We experienced this first-hand on our global ALT team. The investment in our people turned out to be just as important as the investment in our legal technology.