With the pandemic resulting in a shifting of business priorities, Alternative Legal Service Providers (ALSPs) are having their moment in the sun. One segment that’s rising in prominence is that of flexible lawyers, who are able to provide in-house teams with a high level of expertise at a manageable cost. Players in this segment share with ALB how the pandemic is facilitating their growth, how they are staying competitive, and what the future holds.
The COVID-19 pandemic has spurred organisations to rethink business models, and the legal marketplace is no different. Firms and corporate legal departments are actively searching for ways to minimise costs and increase workﬂow efﬁciency amidst uncertainties in the market and growing expectations from clients and their businesses. These considerations have driven traditional legal operations towards creative and technology-focused solutions. Alternative Legal Services Providers, or ALSPs, have benefited as a result. A 2021 Thomson Reuters Institute report pegged the total value of the ALSP segment at $14 billion by the end of 2019. The report found that law ﬁrms and corporations are more inclined, if not proactive, to solicit the expertise of ALSPs in a bid to prioritise higher-value activities while saving cost and satisfying clients at the same time.
Within the broader ALSP space, providers of ﬂexible-lawyer services, which place lawyers with in-house departments for speciﬁed periods or projects – are beginning to see their star rise. These services are not new, having been around for a few decades now, but there are signs that Asian markets are taking to them in a bigger way.
According to Paul Garth, account director manager and head of APAC at Vario by Pinsent Masons, a provider of law ﬁrm-led professional services that include freelance lawyers and legal project management, the role of the pandemic and the lockdowns induced throughout has been quintessential in facilitating this positive shift in client attitudes towards ALSPs.
This has resulted in overcoming challenges that ALSPs have faced over time. In the area of contract lawyers, Garth admits that frequent career moves remain stigmatised in some markets or even across some age groups. However, this perception soon shatters once quality service is delivered.
Brett Menadue, head of Asia and the Middle East at Lawyers On Demand (LOD), which provides lawyers on a project basis to organisations in need of legal support, agrees that the rising demand for remote and distributed teams thanks to the pandemic has deepened the understanding of ALSP models, although the market has been evolving even before the COVID disruptions.
“We’ve been operating in Asia for more than a decade and over that time we’ve seen a maturing approach to ALSPs,” says Menadue. “At ﬁrst, there was some natural hesitation with the model but we’re seeing an increasing acceptance of different ways of working. I think clients are starting to see the results and word of mouth has been a powerful referral network.”
One element that works in the favour of ALSPs is that the needs of clients are growing increasingly sophisticated. “Awareness of what these multifaceted service offerings bring to the table has increased as the value has become apparent among sophisticated clients. It is almost expected of most providers now that they can offer more than traditional legal advice,” says Garth.
The degree of ALSP acceptance and usage pattern varies across regions. Law ﬁrms in Australia have been showcasing an exceptionally sophisticated use of ALSPs, trailed by their US, Canadian, and UK counterparts. This is in line with LOD’s observation, but Menadue under-scores the potential of newer markets.
“For example, our business in the United Arab Emirates is only ﬁve years old this year, but we have seen a strong acceptance in that country, partly due to the country’s commercially progressive attitude toward fostering innovative businesses like LOD’s,” Menadue notes. New and large companies usually power the uptake in interests across jurisdictions, he adds, with slight disparity among industries.
With growing traction comes intensifying competition as alternative players have to elbow aside not only traditional legal service providers but also ALSP peers for market share. Vario says its secret sauce is its clients. As ﬂexible resourcing makes inroads across APAC, Garth envisions that other service lines, such as managed legal services, will spearhead Vario’s business growth in the coming years “due to global clients pushing the expansion locally.”
Menadue also points out that a solid rapport with clients has sharpened LOD’s competitive edge. “Each of our HQ teams spends hundreds of hours a year building strong relation-ships with clients and employed consultants,” which Menadue believes pens the formula of success for a people-centric business that demands a signiﬁcant amount of trust. Key to any ﬂexible-lawyer offering is the quality of lawyers on offer. To ensure the delivery of superb services, especially during challenging times such as COVID pandemic, Vario manages to keep its bench strength of suitable talents by tapping into a strong referral network and promoting the beneﬁts of a ﬂexible career.
“It is essential for us that our legal consultants are probed and tested not only for their technical ability but also the softer skills that allow them to be parachuted into new situations and to begin optimising value with minimal fuss,” Garth says.
Meanwhile, LOD says it boasts an “extensive network of lawyers and consultants” with a wealth of in-house experience and commercial acumen, according to Menadue.
The provider prizes a “great commercial grounding” when evaluating candidates. Menadue says those who’ll make a good ﬁt for the team are legal professionals who understand “not just the legal, but also the business side, particularly stakeholder management.”
“With higher demands for all levels of experience, we have invested in a more people-oriented support model for our lawyers and consultants to ensure that they always have the support of our best HQ people while they are working,” adds Menadue.
When asked about the future of the market in Asia, Vario’s Garth says he fore-sees some inevitable short-term pain, as “shortages of lawyers due to shuttering of countries during the pandemic” are poised to choke the stream of full-time hires and thus deplete the resources that clients customarily have drawn upon.
“We’re optimistic about the future of the ALSP market in Asia. There is an increased demand for outsourced solutions from existing and new clients with operations in adjacent markets to our key office hubs. We continue to work with those clients in multiple jurisdictions across Asia and in our main office hubs.”
— Brett Menadue, LOD
“The ALSP market will continue to be driven largely by client demand,” Garth adds, with the expanding energy and supply chain sectors calling for solutions beyond pure legal advice. “This will be a part of the answer, but not the full answer.”
Menadue of LOD strikes an upbeat tone. “We’re optimistic about the future of the ALSP market in Asia. There is an increased demand for outsourced solutions from existing and new clients with operations in adjacent markets to our key ofﬁce hubs. We continue to work with those clients in multiple jurisdictions across Asia and in our main ofﬁce hubs.”
Neither “mild uncertainty in some Asian markets” nor “a fair degree of global inﬂationary pressure” can thwart the upward trajectory of the ALSP market, says Menadue before adding, “We are optimistic about a future where we are beginning to see a rise in normal activity once again - including international travel, tourism, and business-related activity.