Innovations Fresh Thoughts For Managing

AI Can Revolutionize Legal Service Providers — If Used Strategically

Alternative legal service providers (ALSPs) have pioneered the legal sector’s push toward making its processes and workflows more efficient. They have played an essential role in pushing this highly traditionalist industry to embrace globalization, legal transformation and strategic outsourcing for contract review, legal research, litigation support and other high-volume work. 

Tariq Hafeez

The same can be said for generative artificial intelligence (AI) today. AI is nothing new to the legal profession. Law firms, and even alternative legal service providers, have already been integrating machine learning tactics and AI tools into their services and legal tech solutions for years. However, the launch of OpenAI’s ChatGPT and other consumer-focused generative AI tools are making AI easily and affordably accessible to any professional.

Unsurprisingly, what was once a stealth offering could turn into a disruptive force for ALSPs. One recent Thomson Reuters survey found that 82% of in-house counsel surveyed felt they could apply ChatGPT and generative AI in day-to-day legal work. At the same time, roughly 1 in 5 corporate legal departments want to either decrease their ALSP spending or reevaluate their spending plans.

However, despite the dim picture legal industry doomsayers are painting, there is still a role for the ALSP in furthering legal services and expanding opportunities. ALSPs can and do play an important role in helping train AI models with data and feedback to help bring about greater accuracy. Increasingly, legal tech companies are looking to partner with ALSPs to create AI-powered tools and solutions. Moreover, modules rooted in generative AI can help the ALSP sector streamline services, promote more efficient matter staffing and streamline the way ALSPs accomplish high-volume legal tasks.


The mission of any ALSP is to help legal and in-house department clients scale, optimize and adapt to new technology — all while saving costs and promoting efficiencies. Generative AI will — and should — push ALSPs to reassess how they approach these objectives. Standalone generative AI programs could render an ALSP’s automation-focused advantages redundant, considering how AI can accomplish much of the same tasks as an entire review team with a fraction of the staff output. Naturally, the speed at which AI can categorize contracts, point out redlines, compile legal research and more would enable ALSPs to complete projects with greater accuracy, and at a fraction of the speed expected with human-powered teams. This could upend how ALSPs approach their pricing and business models. Given the process-based shortcuts AI offers, increasingly cost-conscious clients may raise red flags about not getting billed appropriately.

“Generative AI can also help legal management professionals and their teams quickly identify responsive documents in e-discovery, particularly by whittling down the number of responsive documents legal teams should review.”

However, current-generation AI programs are still imperfect. Even though generative AI programs and associated large language learning models (LLMs) have gotten remarkably close to mimicking the quality of human-generated responses, counsel and research findings, in-house departments still risk receiving inaccurate or made-up feedback. For in-house departments, the risks of following advice grounded in AI-induced “hallucinations” can compromise an in-house department’s objectives.


The way ALSPs can maximize AI’s potential while preserving their value proposition is to fill the gap between AI’s aspirations and current capabilities. When ALSPs combine the strengths of their niche knowledge and human intelligence with AI’s power, they can fulfill their objectives much more quickly and efficiently.

Consider contract review, long a staple offering of ALSPs. Once an AI module has undergone machine training, it could automate up to 60% of the work an ALSP team could produce. It could even offer redlines, execute playbooks of fallback clauses, summarize execution timelines and renegotiation schedules, and even synthesize business data with contractual terms to assess grounds for renegotiation. While humans will remain a key cog in driving effective negotiations and relationship-building initiatives, ALSPs must repackage their offerings to reflect the heightened speeds at which AI can work through agreements.

Generative AI can also help legal management professionals and their teams quickly identify responsive documents in e-discovery, particularly by whittling down the number of responsive documents legal teams should review. While an attorney would still need to make critical judgment calls around evidentiary privilege considerations, introducing the technology could represent the difference between having an ALSP review millions of disparate documents or billing for concentrated review sessions of highly responsive documents.

There are many other AI use cases for an ALSP to explore, including using it to expedite legal research, run predictive analytics on potential judge rulings and identify red flags in a company’s compliance initiatives. So long as they consider the benefits and drawbacks of the technology — and the continued importance of human legal teams — ALSPs should consider test-driving and embracing AI technology soon. It’s a move that will not only help the legal management community streamline their day-to-day work, but also further an ALSP’s standing as a trusted partner for legal management professionals for decades to come.