The Rise of ALSPs: Transforming Legal Operations and Business Strategy

With a market size of $28.5 billion and an 18% compound annual growth rate (CAGR) from 2021 to 2023, ALSPs are fundamentally reshaping how legal services are delivered. Their ability to provide cost-effective, technology-driven and scalable solutions positions ALSPs as essential allies for businesses looking to optimize legal spend and efficiency. ALSPs also serve as business accelerants and enablers, offering a comprehensive legal operations framework that enhances compliance, transaction execution and risk management.
‍

For corporations, funds and law firms seeking to stay ahead in an increasingly competitive legal landscape, understanding how ALSPs are evolving and where they add the most value is crucial.
‍

Corporate Legal Departments Are Doubling Down on ALSPs

A striking takeaway from the report is the extent to which corporate law departments are shifting legal work to ALSPs. Today, 57% of corporate legal teams use ALSPs in some capacity, and their reliance on ALSPs is expected to increase in key areas such as legal managed services, contract review and compliance.

Why corporations are turning to ALSPs:
‍

• Cost-effectiveness and control: ALSPs offer significant savings by providing legal services within a more financially controlled project management framework at a lower cost than traditional law firms while maintaining, and often exceeding, the quality of outputs.
• Scalability and flexibility: Corporate legal teams are leveraging flexible staffing models from ALSPs to handle surges in workload without committing to permanent hires.
• Technology and AI-enabled services: The rise of legal technology and AI-driven solutions has made ALSPs a preferred choice for high-volume, repetitive and data-intensive work.
• Legal operations and project management: ALSPs, like Agile Legal, offer a turnkey legal operations framework that allows companies to integrate efficient compliance, regulatory management, litigation support and transactional services seamlessly into their existing legal structures.

‍
Companies that proactively integrate ALSPs into their legal strategy are not just reducing costs but also gaining operational efficiency and a competitive advantage in legal project and operations management.
‍

Law Firms Are Embracing ALSPs—But Some Are Falling Behind

While ALSPs have historically been viewed as competition for law firms, the reality is more nuanced. Many firms now partner with ALSPs—either by establishing their own affiliates or by contracting with independent ALSPs to deliver legal services more efficiently.
‍

The report data tells a clear story:
‍

• 62% of firms with their own ALSP affiliates also use independent ALSPs—showing a clear recognition of the strategic benefits of outsourcing non-core legal work.
• Law firms that do not integrate ALSPs into their service models risk losing corporate clients—many of whom are shifting spending away from firms that lack innovative delivery models.
• Only 5% of firms that don’t currently use ALSPs plan to start—indicating a growing divide between firms that embrace ALSPs and those that resist change.
  ‍

Law firms that fail to incorporate ALSPs into their service delivery may find themselves at a competitive disadvantage as corporate clients increasingly prioritize efficiency and cost savings over traditional law firm loyalty.
‍

Generative AI: A Game-Changer for ALSPs

One of the most disruptive forces in the legal industry is generative AI (GenAI). According to the report, both law firms and corporate legal departments believe ALSPs that lead in AI adoption will have a competitive edge.

Some key AI-driven insights from the report include:
‍

• 40% of corporate law departments and 35% of law firms said they view ALSPs with strong AI capabilities as more attractive.
• Firms with ALSP affiliates are significantly more likely to be investing in AI-powered legal services, showing a correlation between innovation and ALSP integration.
• The billable hour model is under increasing pressure, as AI-driven efficiency makes time-based pricing models increasingly obsolete.

This means that ALSPs that effectively integrate AI-powered contract analysis, legal research and process automation will not only increase efficiency but also deliver better client outcomes at a lower cost.
‍

The Bifurcation of the ALSP Market: Early Adopters vs. Traditionalists

The ALSP market is splitting into two distinct groups:
‍

1. Forward-thinking corporations and law firms that are expanding their use of ALSPs to enhance service delivery.
2. Traditionalist firms and corporate law departments that have yet to engage with ALSPs and show little interest in doing so.
   ‍

This divide suggests that companies willing to engage with ALSPs today will gain a long-term business advantage over those that hesitate. The ALSP-enabled company not only manages legal projects and compliance more effectively, but also accelerates deal-making and litigation efficiency, reducing risk and improving business agility. The process insights, scalability and efficiency that ALSPs deliver enable businesses to move more quickly and adapt more responsively to changing business needs.
‍

Corporate legal teams that continue to delay ALSP adoption may find themselves at a disadvantage as competitors become more agile, cost effective and tech driven.
‍

The Future of ALSPs Is Here

The 2025 Alternative Legal Services Report paints a clear picture of a legal market that is moving toward technology-driven, cost-effective legal solutions that improve a company’s ability to succeed. ALSPs are no longer just "alternative"—they are essential.
‍

For corporate legal departments and law firms that want to remain competitive, leveraging ALSPs is not just a smart move—it’s a necessary one.
‍

As a legal services innovator for more than a decade, Agile Leal is uniquely positioned to help clients capitalize on the ALSP evolution. Whether you need regulatory compliance support, litigation support or contract management services, our legal operations management solutions provide the efficiency, cost savings and expertise companies require.
‍

Contact us to learn how our ALSP solutions can help you optimize legal spend, enhance efficiency and stay ahead in a rapidly evolving legal landscape.