Score One for Law Firms Over ALSPs


It takes savings of at least 24% to get an executive to even entertain switching providers. You can offer these savings in time or money—but if it doesn’t meet the 24% threshold, you are toast.

How ALSPs Negate Their Own Savings

ALSPs offer raw savings but are getting killed in the client experience. Top legal decision makers report ALSPs are difficult to deal with, deliver a clunky experience, and haven’t embraced client service. And, it’s all about the experience. Any breakdown in client experience costs top legal decision makers their most expensive resource—their time—immediately negating all those cost savings.

Law Firms Beat Out ALSPs in Client Experience

Top legal decision makers, at least the 40% or so who report experience with an ALSP, rank their user experience a 7.2—a good solid C+. These same decision makers say a good primary law firm is ranked an 8.7, while an average law firm earns an 8.2—both well above any ALSP. Only 11% rate their ALSP experience a 10 out of 10, while 50% rate their experience at 7 or below.

The minimum acceptable client experience in the legal world is 8.1. The math isn’t quite working in favor of ALSPs—yet. It’s difficult for clients to see the benefits in the absence of a smooth experience. The clunky ride cloaks everything the ALSP does. Clients tell us the major issues making the client experience rough include:

  • Lack of a single point of contact

  • No clear project leader

  • Continuing stream of change orders

  • Lack of updates and status reports

  • Staff turnover

  • Different interpretations of due dates and deadlines

But the Game Is Still in the Early Stages

ALSPs have been busy perfecting their processes and technology. They realize their market breakthroughs will come from a combination of savvy market development and a good, if not superior, client experience.

The message to law firms is clear: You can only keep the ALSPs at bay if you have the edge in the client experience—or develop your offerings. At some point in every B2B market, client experience rules. We recommend starting the continuous improvement process now—while you still have a substantial lead.


EY Circles Its Legal Prey as It Acquires Riverview

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Another move, another round of guessing. The Big 4 legal services question is no longer if and when—it’s how much and how fast.

How are the Big 4 going to make their law splash known? EY just took another step closer. More of a baby step than PwC setting up a Washington, DC office, but a step none the less. EY’s acquisition of Riverview Law expands EY’s presence in the managed legal services game—a market where they already supply services.

Not Performing as Well as Law Firms

Currently, corporate counsel and legal decision makers rate legal outsource providers a 7.7 out of 10 for overall experience. By contrast, a primary law firm—who provides the same services—earns an 8.7 out of 10 for their client experience. Law firms have an edge, and Alternative Legal Services Providers (ALSPs) still have an uphill battle. This is one place where EY can crush its competitors—the firm’s knowledge of and ability to deliver an exceptional client experience is a differentiating source of advantage.

EY also knows how to scale and leverage technology. This is where their real strength plays out. When and how EY invests to scale will be the event to watch. Otherwise, the Big 4 firm is just another player in an early stage market.

Managed legal services gives EY additional exposure to the GC’s office—a maneuver critically needed to make a full-scale move into legal. EY will use this acquisition to further develop relationships, better understand client needs, and develop client-by-client strategies to sell legal services. This is no different than what the best performing law firms do. Law firms lacking client-specific plans are immediately at risk.

A Wide-Open Market

In the US, only 60% of GC offices have been approached by ALSPs. BTI research shows 39% of corporate legal departments have tried an ALSP in some form. This leaves more than half the US market untested and untapped. This also suggests the ALSP who can scale their sales and marketing first will have a serious advantage—at least in the US.

The decision to use ALSPs in the US sits squarely with the GC. They may get a slight nudge or push to use an ALSP from a CFO—but, few will question the Chief Legal Officer on this one. The CLO owns the risk—they own the decision.

The EY acquisition is one more prod to law firms to rethink their game. They don’t want to leave doors open for the Big 4 by staying out of the managed services game. Law firms can partner with managed service providers or do it themselves. ElevateNext comes to mind as a team talking about this for a long time and consists of Elevate and the founders of Valorem Law Group. But, even the firms not doing anything would benefit from making a formal assessment and decision instead of passively opting out.

The only events which would dampen the Big 4’s encroachment into legal would be an accounting crisis like Sarbanes-Oxley or the loss of a large accounting firm. Both are in the highly unlikely category. The future is now. Baby step or not—the Big 4 are here.

This is a small excerpt from our upcoming report, BTI Innovation Review and Outlook: Corporate Counsel Rank Law Firms and Their Needs 2019, to be released in September 2018. BTI analyzes the ALSP market as well as client innovation and technology needs, and ranks law firm performance—by name.


(Based on more than 400 in-depth interviews with strategically selected top legal decision makers in the US at companies with $1 billion or more in revenue between November 2017 and July 2018.)