This research report on the US alternative legal service providers market covers market sizing and forecast, market share, industry trends, growth drivers, and vendor analysis. The study includes insights on segmentation by Providers (new law companies, captive LPO, staffing/recruiting and contract lawyer companies, and others), Services (eDiscovery, investigation and litigation support, contract management, document review and coding, legal research, regulatory risk and compliance, and Others), End-user (law firms and corporations), and Geography (US).
The US alternative legal service providers market will grow at a staggering CAGR during the forecast period due to the intense business and regulatory changes driving the need for sweeping, company-wide transformations, and creating expansive hurdles for compliance and legal functions. While alternative legal services are currently in the nascent stage, they are driving a future focus that is centered on the growth and advancement of end-to-end solutions.
Alternative legal service providers increasingly appear on the horizon – they are mostly less expensive than in-house counsel and are better attuned to help confront legal struggles. Alternative legal service providers can aid with augmenting business operations and are thus gaining popularity. While historically in-house departments acted as low-cost alternatives to traditional law firms, the cost of conducting business and climbing salaries of law professionals is looming threats for in-house law management, thereby increasing the popularity of alternative legal services. Another major driver for their growth in the market has been that these services offer integrated solutions to more than merely legal challenges; they help corporations solve global business challenges (such as risk management, cybersecurity, and data privacy), making them attractive partners.
The US alternative legal service providers market expected to grow at a CAGR of over 23% during the period 2019–2025.
The market research report includes detailed segmentation by products, services, end-user, and geography.
Insights by Provider
New Law firms have been the most disruptive players in the market, accounting for major work carried out in the document review and litigation spheres. There is a growing trend of building strong SLAs and utilization of performance metrics. With the growing openness of law firms, there comes a growing affinity for a blended approach to deliver services. This approach has been increasingly adopted across firms over the last couple of years. As law firms, big as well as small, look to reclaim their position in the market, they have been developing in-house alternative legal service providers that can afford them the ability to delve into more services. Major law firms typically have been able to invest in new technology, processes, and talent and can collaborate without disturbing the original practice-centric way of working by developing branches that sell these services. However, this is also working against their proliferation, slowing down the entry of players in the market. Hence, with technology becomes widespread, hybrid players have scaled back on their services offering and shifted focus on developing and offering legal tech to the wider market.
Insights by Services
The proliferation of the internet and smart device, which have resulted in a data explosion, including social media, e-mails, instant messages, audio clips, voice notes, images. They have all made the collection and review extremely challenging and expensive when performed in-house, thereby driving the demand for tools and professionals outside of the traditional model toward specialty firms and technology companies. Further, security and data privacy regulations are having their effect on the market. As the US is continually refining eDiscovery laws via case rulings and the global privacy trend is having its bearing on American litigators, legal teams are under more pressure to keep atop protection or privacy obligations. Hence, the market is evolving at a rapid rate and faces possibilities of AI disruption. In order to survive, vendors in the market need to keep a tab on developments and refine services accordingly. The wave of consolidation that is a result of the presence of a large number of firms is expected to continue during the forecast period.
As several organizations predict an uptick in litigations, the market for litigation and investigation support is expected to grow. Businesses that venture in international trades are being threatened by trade wars, as a result, the environment is likely to be increasingly litigious. Effective preventative and support measures are being put in place progressively more, such as early case evaluation/ resolution and expectations to increase in-house legal team sizes.
Business relationships have become more intricate in recent years. Organizations are looking to improve operational efficiency and reduce the risk of bringing contract management from an admin arena to the front. The relevant solutions are providing an opportunity to capitalize on innovations in e-signature, collaboration, workflow, contract generation, and analytics. In terms of technology, contract management has not caught up yet. It is largely underutilized due to the lack of sophistication of contract automation software to automate each stage in the draft to the signature process. While alternative legal service providers have created proprietary solutions in-house, they are largely inadequate, and players have been supplementing wherever they have not been able to fill the void manually.
Insights by End-users
A shift in focus from brand status and services to efficacy, providing high viability on investments. The demand for document review and legal research continues to grow significantly. In an age where customer-centricity and differentiation are vital, several players are increasingly examining cost-benefit trade-offs. They are forsaking rote, administrative work by outsourcing it and focusing on high-value tasks and core competencies to their best potential, thereby increasing demand for alternative legal service providers. Another driver comes as a response to the threat of internal strife. As the industry struggles with talent and demand surpass capacity during episodic events, it is outsourcing certain tasks to reduce damages related to the lack of additional resources. The traditional legal industry has been battered by stupendous change, and large law firms have been ambushed with evolving technology and the expansion of corporate legal departments. As a result, the employment of alternative legal services is more prominent in large firms than in smaller ones.
Unlike law firms, corporates tend to employ one alternative legal service provider or partner with them along with a law firm. There is a lesser likelihood of using different alternative legal service providers. This is expected to create a demand for services, which can be “all things to all people.” This has led to alternative legal service providers operating in the market taking huge strides to provide high value instead. However, a barrier in the market specifically among small and medium-sized corporations’ departments is the hesitancy to hire managed legal services personnel, especially lawyers. Hence, not only corporations and law firms have increased their use of alternative legal service providers, but they have also evolved how they use
Key Vendor Analysis
Alternative legal service providers have essentially entered the landscape around 2000, evolving with spurts across two time periods: from 1999-2007 wherein outsourcers such as Axiom, Integreon, and Exigent made their way into the market. The market is witnessing a growing number of global law firms, which are imparting credibility to the concept of legal service delivery. With clients increasingly moving further afield in the Rogers Diffusion Curve, lawyers and law firms will account for a less dominant share.
There is however a common, yet largely untrue narrative floating around: that alternative legal service providers are competing with traditional law firms for their spot in the industry, winning some accounts and losing others to each other. Although that is not entirely the case. The competition between the two is more layered. Hybrids of law firms and legal service entities and alternative staffing companies are expected to become a norm, complementing law firms. The contrast is likely to be in terms of AI or technologies which is expected to contribute to the differentiation of new law companies.
Other Prominent Vendors – BlackStone Discovery, Clifford Chance, Consilio, Driven, Epiq, Everlaw, Exigent, Greenberg Traurig, Integreon, KLDiscovery, LegalZoom, Lawyers on Demand (LoD), Mindcrest, Reed Smith, Legility, Lumen Legal, Morae Global, Orrick, QuisLex, and Thomson Reuters
Key Market Insights
The analysis of the alternative legal service providers market sizing and growth opportunities for the forecast period 2020–2025.
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