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The UK legal market was valued at £35.1bn in 2018. The main legal spend is for business
and commercial work, and nearly 47 percent of that revenue is with the largest law firms.2
However, within this, the ALSP market has been growing at a rapid pace. In just two years, it has
seen an increase in revenue from $8.4 billion in 2015 to about $10.7 billion in 2017.3 ASLPs as a
subsector are now making a considerable dent in the market, especially as there continues to be a
drive for in-house legal teams to monitor and curb their external spend and look for greater
efficiencies.
While traditional law firms service customers in industry, ALSPs often service two sets of
customers: the in-house legal teams of industry customers and traditional law firms, partnering
with both to provide strategic resourcing solutions. The fact that ALSPs support traditional law
firms surprises many who might consider the two entities to be competitors, but it should not.
Traditional law firms are built on talent and have resourcing requirements just like any other
business. However, the way ALSPs deliver to each of those customers is aligned with each
operating model.
Legal Services Resourcing Models for Business
In-Source
The first phenomenon in response to the growing needs of business and limited choice in
legal service provision was to in-source. Hiring lawyers to work directly for and within a business
gave cost certainty and more flexibility. Initially, lawyers were often hired on the basis of the
particular practice area with which a business needed the most help at the time: M&A,
employment, or commercial contracts, for example. This method has been a success. The
continued growth of in-house legal teams over the last decade has been largely driven by cost
pressures, as corporate executives look for ways to reduce external legal spend. In fact, in-house
legal teams have more than doubled over the last 15 years from nearly 13,000 in 2002 to almost
28,000 in 2017.4 The scale of growth is considerable.
There are distinct skillsets that in-house legal teams bring to their internal stakeholders,
such as the ability to work with commercial teams on the ground as well as the ability to work with
businesses to provide operating and strategic advice. This commercial and operational experience
is invaluable, and the training is hard to replicate within a traditional law firm. The benefit of a
General Counsel (GC) working within and for a business directly is the added efficiency gained
by having a trusted advisor available to support the business and understand the commercial
drivers for decisions, the operational realities of a particular course of action or inaction, and the
environment in which the business is operating. The GC can become preventative rather than
reactive. Helping to organise and prepare business colleagues and navigate a way through the legal
framework helps avoid the need for a specialist until absolutely necessary. In an added dimension,
the GC can also add value by providing strategic advice on business decisions. The skills gained
by in-house lawyers are invaluable, and the cost effectiveness of having a lawyer in the business
is evident.
2 Laura Wood, UK Legal Services Market Trends Report, 2019, BUSINESS WIRE (March 4, 2019),
https://www.businesswire.com/news/home/20190304005549/en/UK-Legal-Services-Market-Trends-Report-2019.
3 Alternative Legal Service Providers 2019, THOMSON REUTERS, https://legal.thomsonreuters.com/content/dam/ewp-
m/documents/legal/en/pdf/reports/alsp-report-final.pdf?cid=9008178&sfdccampaignid=7011B000002OF6AQAW&chl=pr.
4 Legal Innovation, RACONTEUR (Nov. 2018), https://www.raconteur.net/legal-innovation-nov-2018.
159
and commercial work, and nearly 47 percent of that revenue is with the largest law firms.2
However, within this, the ALSP market has been growing at a rapid pace. In just two years, it has
seen an increase in revenue from $8.4 billion in 2015 to about $10.7 billion in 2017.3 ASLPs as a
subsector are now making a considerable dent in the market, especially as there continues to be a
drive for in-house legal teams to monitor and curb their external spend and look for greater
efficiencies.
While traditional law firms service customers in industry, ALSPs often service two sets of
customers: the in-house legal teams of industry customers and traditional law firms, partnering
with both to provide strategic resourcing solutions. The fact that ALSPs support traditional law
firms surprises many who might consider the two entities to be competitors, but it should not.
Traditional law firms are built on talent and have resourcing requirements just like any other
business. However, the way ALSPs deliver to each of those customers is aligned with each
operating model.
Legal Services Resourcing Models for Business
In-Source
The first phenomenon in response to the growing needs of business and limited choice in
legal service provision was to in-source. Hiring lawyers to work directly for and within a business
gave cost certainty and more flexibility. Initially, lawyers were often hired on the basis of the
particular practice area with which a business needed the most help at the time: M&A,
employment, or commercial contracts, for example. This method has been a success. The
continued growth of in-house legal teams over the last decade has been largely driven by cost
pressures, as corporate executives look for ways to reduce external legal spend. In fact, in-house
legal teams have more than doubled over the last 15 years from nearly 13,000 in 2002 to almost
28,000 in 2017.4 The scale of growth is considerable.
There are distinct skillsets that in-house legal teams bring to their internal stakeholders,
such as the ability to work with commercial teams on the ground as well as the ability to work with
businesses to provide operating and strategic advice. This commercial and operational experience
is invaluable, and the training is hard to replicate within a traditional law firm. The benefit of a
General Counsel (GC) working within and for a business directly is the added efficiency gained
by having a trusted advisor available to support the business and understand the commercial
drivers for decisions, the operational realities of a particular course of action or inaction, and the
environment in which the business is operating. The GC can become preventative rather than
reactive. Helping to organise and prepare business colleagues and navigate a way through the legal
framework helps avoid the need for a specialist until absolutely necessary. In an added dimension,
the GC can also add value by providing strategic advice on business decisions. The skills gained
by in-house lawyers are invaluable, and the cost effectiveness of having a lawyer in the business
is evident.
2 Laura Wood, UK Legal Services Market Trends Report, 2019, BUSINESS WIRE (March 4, 2019),
https://www.businesswire.com/news/home/20190304005549/en/UK-Legal-Services-Market-Trends-Report-2019.
3 Alternative Legal Service Providers 2019, THOMSON REUTERS, https://legal.thomsonreuters.com/content/dam/ewp-
m/documents/legal/en/pdf/reports/alsp-report-final.pdf?cid=9008178&sfdccampaignid=7011B000002OF6AQAW&chl=pr.
4 Legal Innovation, RACONTEUR (Nov. 2018), https://www.raconteur.net/legal-innovation-nov-2018.
159
