Takeaways

Alternative Legal Service Providers (ALSPs) offer flexible, cost-effective legal support for in-house teams. 

Key benefits of using ALSPs include scalability, cost savings, access to specialized expertise, and innovative legal tech—without the overhead of full-time hires or typical law firm rates.

Flexible legal talent providers, legal process outsourcing providers, and the Big Four accounting firms are the three main types of ALSPs.

Picture this: Your company has an upcoming product launch, and your in-house attorneys are swamped with tasks to finish by the end of the quarter. They have to establish the business’s IP rights, secure liability insurance, and check the product’s safety, among other responsibilities. 

Outside counsel could help ease the workload, but firm attorneys typically require a lot of oversight and work slowly because they’re especially risk-averse. Their high fees also significantly cut into the company’s revenue. 

Sound familiar? If you’re a GC or legal operations leader, you’ve likely been in similar situations more times than you care to admit. You’re not alone in feeling frustrated with the traditional law firm model.

Now, imagine another solution—one that could provide the expertise you need when you need it and without breaking the bank.

Enter Alternative Legal Service Providers (ALSPs). In this post, we’ll demystify the term and show you how ALSPs can be a game-changer for your in-house team. We’ll cover:

• The key differences between ALSPs and law firms
• 4 strategic benefits of partnering with an ALSP
• Real-world case studies of in-house teams achieving success with ALSPs

By the end, you’ll clearly understand how ALSPs can help you boost efficiency, access specialized expertise, and lower costs.

What is an Alternative Legal Service Provider?

ALSP is a broad term that refers to any organization providing legal services that isn’t a law firm. 

Outside counsel was the legal industry norm for a long time, but demand for ALSPs grew over the last 10 years as cost reduction became more critical to in-house teams. Reuters’ 2023 report shows that the ALSP market has grown by 145% since 2015, and its 2021 survey found that 71% of corporate law departments rely on ALSPs. 

What are the most common types of ALSPs?  

1. Flexible legal talent providers

Flexible legal talent providers pair temporary legal professionals with corporate legal departments. Organizations like Paragon exclusively offer interim attorneys with years of in-house experience in specialized practice areas, ensuring they can handle complex tasks that require expertise and judgment. They work closely with in-house counsel—participating in meetings, collaborating on projects, and contributing to strategic decision-making. 

Other flexible talent providers focus on staffing for repetitive, high-volume work that doesn’t necessarily require an attorney license. These companies typically provide temporary paralegals and legal secretaries along with attorneys.  

2. Legal process outsourcing providers (LPOs)

LPOs handle repetitive tasks that require minimal expertise—such as document review, data entry, and basic contract management. 

These providers often rely on overseas talent and automation to minimize costs, and they typically work independently with limited direct collaboration with the client’s legal department. This talent solution is best for teams that need support for repetitive legal work at a low cost and don’t need to work closely with the service provider.

3. The Big Four accounting firms

The Big Four accounting firms (PwC, KPMG, EY, and Deloitte) offer routine legal services that complement their primary accounting work. 

These ALSPs attract clients with their multi-purpose offerings. Because their staff includes a variety of business professionals—not just attorneys—these firms can offer diverse service bundles.  However, the Big Four was the slowest-growing ALSP segment in Reuters’ 2023 report, making up just $1.5B of the $20B ALSP market. 

4 Strategic Benefits of Using an ALSP

1. Scalability and Flexibility

Unlike hiring full-time attorneys, ALSPs let you scale your resources up or down based on your legal needs. 

Imagine your legal department only needs 20 weekly hours from an attorney to help with sales negotiations over the next quarter. Instead of bringing on a full-time, permanent employee, you could hire an interim attorney for just that time. You can add or cut hours from your interim attorney based on how your team’s workload changes.

With this scalability, your in-house team can remain nimble when the economy, your business, or your budget unexpectedly shifts.

2. Cost Savings

ALSPs’ flexibility helps in-house teams avoid wasteful spending. Instead of relying on costly full-time attorneys or outside counsel for every task, you can use ALSPs to complete most of your in-house work at a more cost-effective rate (without compromising on quality). 

Imagine you’re a part of a small in-house team for a company that’s about to go through a merger. Your full-time attorneys will need to dedicate significant time to this project over the next year, so you use an ALSP like Paragon to backfill the team’s day-to-day legal work. 

Here’s a breakdown of how much the ALSP route would save your team over a year based on current rates—roughly $150,000 compared to a full-time hire and $350,000 compared to using outside counsel. 

For more cost breakdowns like this one, check out our GC’s Guide to Rightsourcing. 

3. High-quality, fully-embedded team members

Flexible legal talent providers, like Paragon, have networks of attorneys with diverse backgrounds in many practice areas. Unlike outside counsel, interim attorneys from these providers work directly with your team at the pace your business needs. You can tap into niche legal expertise that may not be available in-house without resorting to costly law firms or new hires. 

Say you need help with a regulatory compliance issue. A flexible legal talent provider can connect you with a seasoned expert in that field, like Paragon’s interim attorney Danny J.

He has over ten years of experience, specializes in compliance, and just spent nine months handling regulatory investigations for a social media tech company. 

4. Access to innovative legal tech

Law firms are often slow to learn and adopt new technologies. They’re worried about these tools’ creating security risks, and they can’t bill their clients for learning how to use the latest software. 

Meanwhile, ALSPs typically create and/or use innovative legal tech to work more efficiently and precisely than competitors. This software ranges from document management systems to contract lifecycle management tools and AI-powered legal research and analytics platforms.

Paragon, for example, recently formed a partnership with Screens.ai, an artificial intelligence-based contract review software for legal teams. Looking ahead, we expect more in-house teams to use tech platforms as AI tools become better at handling legal workflows. 

How In-House Teams are Using ALSPs: 3 Case Studies

To better understand ALSPs’ value, let’s dive into how several companies relied on Paragon as their flexible legal talent provider. 

1. Expanding a Medical Device Company’s Legal Team

Before engaging Paragon, a fast-growing medical devices company faced several major legal challenges. Paragon’s interim attorneys were able to resolve each problem promptly. 

• The business’ in-house global clinical trials attorney was drowning in negotiation work and needed support. Paragon deployed a corporate attorney with 20+ years of experience in clinical trials.
• The medical business’ commercial contracts team didn’t have an effective process for handling its increasing number of procurement contracts. Paragon deployed an experienced contracts attorney who optimized the company’s CLM processes. 
• The medical business needed a privacy law expert. Paragon deployed an attorney with a background in healthcare compliance to ensure the company’s medical devices complied with US and EU regulations. 

The client accessed Paragon’s talent at a combined hourly rate of $605, compared to a law firm completing the same work at an estimated $2,000 per hour. Altogether, the switch to interim counsel saved the business over $2.3 million in one year.

2. Conquering Overflow Work for a Software Giant

A Fortune 500 software company faced unpredictable spikes in legal work due to rapid growth, new product launches, and regulatory changes. They needed highly skilled, flexible help to address overflow work in commercial transactions, procurement, antitrust, privacy, and marketing.

Paragon provided the business with experienced interim counsel who handled a variety of tasks, including: 

• Outbound commercial transactions
• Contract review and negotiation
• Antitrust regulations  
• Privacy regulatory investigations
• Product marketing campaigns
• Procurement concerns
• Adtech and marketing issues

These attorneys seamlessly integrated with the software company, impressing the legal team with their communication skills and ability to work autonomously. 

The successful engagement led to an ongoing relationship, with the client engaging Paragon 20 times over the last four years and converting three interim attorneys to full-time employees.

3. Supporting a Cybersecurity Startup During Transitions

Synack, a Series D cybersecurity startup with a two-person legal team, faced a challenge when its corporate counsel went on maternity leave. Steve Soper, Synack’s Vice President of Legal, turned to Paragon for an interim counsel solution.

Paragon matched Synack with David, an experienced lawyer who quickly integrated with the team. David oversaw contract issues, provided legal support on employment and corporate matters, and ensured the team met their internal SLA for contract review response times. He worked twenty hours per week, billing only for the time engaged.

After David’s initial engagement ended, Steve reached out to Paragon to engage him for a second time on short notice. The company’s corporate counsel had just quit her role, so David’s prior experience and knowledge of Synack’s business were invaluable. 

Synack eventually hired a new corporate counsel, but Steve noted he wouldn’t be surprised if he re-engages David or another Paragon attorney. 

“Given his knowledge of the company, it’s just super-nice, from my perspective, to be able to say, ‘Hey David, can you come back for a couple weeks to look at some contracts?’” said Steve. 

Manage your team’s overflow work with ALSPs

Whether you need to expand your team’s capacity, fill a temporary gap, or access niche expertise, ALSPs are worth considering as an alternative to outside counsel or full-time hiring. They help in-house departments reduce costs, work more efficiently, and keep stakeholders happy. 

If you’re considering leveraging ALSPs, Paragon Legal can help. We provide legal departments with tailored interim counsel solutions using our extensive network of experienced attorneys. 

Contact us today to learn how we can help you rightsource your way to legal department success.