Developments in the “Alternative” Legal Services Market

Developments in the alternative legal service provider (ALSP) space move at breakneck speed. New ALSPs seem to be popping up each day. Some expand while others go out of business—or get into new businesses. Some mature while still others are bought up by larger, more developed players. Indeed, in the past few months alone, the market has been churning with mergers, acquisitions, and announcements of new offerings. For example, at the end of June, Eversheds announced the launch of Konexo, its own self-described ALSP that rolls up a number of its other services including consulting, managed services, and others. Earlier in the month, Ernst & Young announced it had completed its acquisition of Pangea3, a managed legal services entity that began as a legal process outsourcer in 2004 and later integrated into media giant Thomson Reuters for nearly a decade before its most recent transition (see “The Changes Keep Coming” for a conversation with Thomson Reuters’s COO, Brian Peccarelli). In an interview with Bloomberg Law, Integreon CEO Bob Rowe said he fully expected this type of consolidation to continue, citing the 2016 merger of DTI and Epiq as emblematic of the accelerating challenges to come. Rowe, who came from Huron Legal before it was acquired by Consilio, explained his reasoning in terms of a maturing market:

If you look at industries as they mature, you typically see small companies entering and then as the industry matures, it takes additional investment dollars to compete. These companies get bought up and there is a hope of buying customer lists and market share and if you get market share without eroding the price, that’s good for shareholders. This industry is no different from other industries as it evolves and goes from segmented industries to one with a couple eight hundred pound guerrillas [sic].

The sheer quantity developments in the ALSP market—amid an already rapid pace of change—is breathtaking. And it is happening in real time. Thus, any aspirationally complete understanding of the ALSP ecosystem requires a close monitoring of what’s “in the news.” Yet, despite all the fluidity in the market, as Wilkins and Esteban underscore, these “alternatives” are here to stay—at least in some configuration. Research like Wilkins and Esteban’s or Thomson Reuters’s recent ALSP report help provide a foundation for understanding how ALSPs fit into the wider legal services market. Nevertheless, this picture is constantly in motion, meaning that part of the larger story of ALSPs is in the news.