“Alternative” Legal Service Providers

“We’re not trying to replace anybody,” Jon Mattingly told the Indiana Lawyer back in 2015. At the time, he and three other litigators had recently left an AmLaw 100 firm to launch two ventures: an Indianapolis-based litigation boutique and an eDiscovery services company. “We’re coming in and... handling some very complex issues in terms of eDiscovery. We’re a partner for the client and their law firm managing the case.”

In the 2010s, data volumes and complexity were starting to grow exponentially, and it became economically untenable to transplant the paper-based discovery workflows into an electronic age. Our founders saw the writing on the wall: corporate clients would soon demand efficiency.

This dynamic helped fuel the rise of the Alternative Legal Service Providers (ALSP) industry.

Efficiency and Excellence

Tasking ALPSs to review documents for responsiveness and privilege could not mean sacrificing quality. ALSPs work under the supervision and direction of counsel who have ethical obligations to their clients, to say nothing of the need to develop and maintain a sterling reputation. Rather, this arrangement allows each stakeholder to focus on their highest and best use. Litigators can focus on substance and strategy because the ALSP is focused on forensically sound collections, defensible culling through analytics, and designing cost-effective review workflows.

The maturity of the ALSP market can be seen through its market penetration (almost 80% of law firms and 70% of corporate legal teams report utilizing ALSPs for eDiscovery, contract management, or some other function) and consolidation fueled by private equity ownership.

Graphic taken from Complex Discovery article, 2023.

Another significant factor is the rise of in-house legal operations. Organizations like the Corporate Legal Operations Consortium (CLOC) and Legal Operators have built impressive communities and educational systems as corporate legal departments strive to create more process-driven and templatized workflows.

Based on the evergreen pressure to “do more with less,” it stands to reason that our industry will continue to see increased insourcing for high-volume work and the continued use of ALSPs for larger and/or more complex eDiscovery matters.

Types of eDiscovery ALSPs

When you’ve made the decision to engage an ALSP, you’ll find hundreds of providers in the market. Generally, they fall into one of three buckets:

1. Independent ALSPs focus on technology and process. They may have an exclusive technology partner (i.e. they work only with RelativityOne) or take a technology agnostic approach. Pure-play service providers emphasize their technology-enabled services and do not have to compete with other practice groups for internal resources.
   
   
2. Big Four and similar consulting firms leverage their scale and organizational ability: in other words, they have the relationships with – and the trust of – large corporations. Their growth is often, though not exclusively, focused on Fortune 1000 firms and driven through cross-selling existing tax, audit, or strategy clients.
   
   
3. Law Firm Captives keep a client’s matter “under one roof.” In theory, this enhances quality control and mitigates communication gaps. In practice, there is often cultural resistance within firms to fully engage these resources. Even when the desire does exist, the technical proficiency is often not quite at the level of independents, and the billable rates are often not as competitive.

There is not a “right” or “wrong” model. These are amoral, situation-specific decisions. Plus, it’s a $20 billion market –there’s enough work to go around for everyone.

Conclusion

Discovery is the most technical portion of any investigation or litigation, and document review is the most expensive portion of discovery. Engaging an ALSP allows you to preserve your case budget for substantive legal work rather than the blocking and tackling of discovery. There are multiple types of ALSPs, each with a unique set of strengths.

If you are searching for a reliable partner, let’s talk. We can help.