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and document-review solutions. Lawyers are also needed to provide the input that trains the AI
tools to become more powerful.
Most importantly, even with the introduction of artificial intelligence in the legal industry,
the heart of a lawyer’s work — legal reasoning, crafting strategy, negotiating with counter-parties,
arguing in court, and more — remains largely untouched by technology. Indeed, technology-driven
ALSPs are not replacing law firms, but rather: 1) reducing the cost of certain services and 2)
allowing them to make more informed strategic decisions. In this sense, ALSPs have advanced
beyond LPOs, which were initially aimed exclusively at the first goal. But in another sense, the
introduction of AI is similar to the arrival of LPOs: It is a disruption to which some law firms will
react better than others. The history of law firms’ reaction to ALSPs, which follows, shows us as
much.
Redefining the Law Firm Delivery Model: a Journey of ALSP Acceptance
In order to survive in today’s economy and to thrive in the future, many law firms are
actively rethinking their business models. This rethink frequently includes an embrace of ALSPs
and a reexamination of the traditional pyramid structure as the usual modus operandi for legal
services delivery.
Although some believe ALSPs will increasingly contract directly with corporate clients, it
is important to consider that they do not practice law and therefore cannot replace law firms
entirely. A more natural fit for ALSPs is to supplant the base of the law firm pyramid. This is not
to suggest the only benefit of ALSPs is labor arbitrage. As discussed above, we have ample proof
this it is not. What ALSPs are doing is leading the way in incorporation of technology into legal
services delivery.
Figure 1: Law Firm Adoption Timeline for ALSPs
Kicking and Screaming
In or around 2006, it was not law firms but corporate legal departments that were the first
proponents of ALSPs. Back in these early days, a cocktail of incredulity with a dash of disdain
was the tipple of choice for many a law firm partner when confronted with the ALSP elevator
pitch. Big Law executives would protest that ALSPs were win-win-lose: win for the firm’s clients,
win for the ALSP, and yet lose for the law firm.
This viewpoint presupposes the adequacy of two hypotheses that simply do not hold water
any longer: the zero-sum game (the more the client loses, the more the law firm wins) and that
every penny of revenue generated by an ALSP is a penny of revenue lost by the law firm.
154
tools to become more powerful.
Most importantly, even with the introduction of artificial intelligence in the legal industry,
the heart of a lawyer’s work — legal reasoning, crafting strategy, negotiating with counter-parties,
arguing in court, and more — remains largely untouched by technology. Indeed, technology-driven
ALSPs are not replacing law firms, but rather: 1) reducing the cost of certain services and 2)
allowing them to make more informed strategic decisions. In this sense, ALSPs have advanced
beyond LPOs, which were initially aimed exclusively at the first goal. But in another sense, the
introduction of AI is similar to the arrival of LPOs: It is a disruption to which some law firms will
react better than others. The history of law firms’ reaction to ALSPs, which follows, shows us as
much.
Redefining the Law Firm Delivery Model: a Journey of ALSP Acceptance
In order to survive in today’s economy and to thrive in the future, many law firms are
actively rethinking their business models. This rethink frequently includes an embrace of ALSPs
and a reexamination of the traditional pyramid structure as the usual modus operandi for legal
services delivery.
Although some believe ALSPs will increasingly contract directly with corporate clients, it
is important to consider that they do not practice law and therefore cannot replace law firms
entirely. A more natural fit for ALSPs is to supplant the base of the law firm pyramid. This is not
to suggest the only benefit of ALSPs is labor arbitrage. As discussed above, we have ample proof
this it is not. What ALSPs are doing is leading the way in incorporation of technology into legal
services delivery.
Figure 1: Law Firm Adoption Timeline for ALSPs
Kicking and Screaming
In or around 2006, it was not law firms but corporate legal departments that were the first
proponents of ALSPs. Back in these early days, a cocktail of incredulity with a dash of disdain
was the tipple of choice for many a law firm partner when confronted with the ALSP elevator
pitch. Big Law executives would protest that ALSPs were win-win-lose: win for the firm’s clients,
win for the ALSP, and yet lose for the law firm.
This viewpoint presupposes the adequacy of two hypotheses that simply do not hold water
any longer: the zero-sum game (the more the client loses, the more the law firm wins) and that
every penny of revenue generated by an ALSP is a penny of revenue lost by the law firm.
154
