In Asia, Alternative Legal Service Providers (ALSPs) emerged in countries such as India and the Philippines more than 15 years ago, originally in the form of legal process outsourcers. This was soon followed by the establishment of ALSPs that offered flexible staffing of lawyers for in-house legal teams. Today, ALSPs continue to change the Asian legal landscape as they gain prominence in different countries from Hong Kong to Indonesia, complementing the traditional legal advice offered by law firms.
The global ALSP market grew 145% from 2015-2021 alone, to over $20 billion. Top challenges for companies operating in Asia mirror the challenges faced by companies globally including cost pressures and increased regulation. In fact, Asia arguably faces greater cost pressures as the budget extended to Asia is shared between multiple countries with differing legal systems within the region. It is no great surprise that we expect alternative legal services will continue to develop and evolve in the region to meet the challenging headwinds that in-house legal teams are facing.
We launched our interim resourcing business in Hong Kong and Singapore over eight years ago primarily to provide full-time interim lawyer support to in-house legal teams for periods between six to 12 months. Since then, our interim resourcing capability has grown and adapted; our clients now require more flexibility when engaging an in-house lawyer, sometimes needing support for a set number of hours per week or even on an ‘on-demand’ basis at an agreed hourly rate. We have evolved our business to ensure we are able to cater for these requirements.
We have seen similar interest in and growth of our legal managed services, provided by our team in Malaysia which has grown from five FTE to forty over a period of four years – a testament both to the strength and quality of the team, and the demand for this service in the region. For example, a global bank operating in Asia initially required our support with banking work but over time there was growing appetite to outsource additional work-types and an increased confidence from other jurisdictions to follow suit after seeing success. In more recent times, we are managing more complex work-types for multiple clients and responding to the need for Chinese language capabilities to cater for the growing surge of Chinese language contracts.
The oft-cited benefits of using ALSPs have been widely written about and mostly relate to value. Amongst other things, an in-house legal team’s ability to leverage the ALSP’s technology instead of having to procure tech or tools themselves, allows them to obtain data without additional cost. Achieving agility and scalability without incurring long-term fixed costs by using interim lawyers and outsourcing routine work to focus on strategic business matters is allowing in-house legal teams to retain their talented lawyers by providing more varied and high quality work. But, we see additional benefits for our clients.
As alluded to above, just as “work begets work”, outsourcing begets outsourcing as a service provider becomes more familiar with the client organization and the work. Clients routinely using interim resource look to keep the same consultants engaged with their companies for other projects as these individuals have a strong working knowledge of the organization, internal processes and key stakeholders. In fact, in Asia, these seasoned consultants are sometimes able to take the place of the in-house legal teams to train additional interim consultants. Organizations spread across multiple jurisdictions trying to get buy-in to outsource work to an ALSP gain the sceptic’s confidence through proven success in jurisdictions that already use the outsourcing model. Having one ALSP providing the same managed legal service across multiple jurisdictions drives both efficiency, accuracy and consistency, points which remain high on the in-house legal agenda.
Asia is a region made up of many different countries with diverse cultures, languages, legal systems and risk appetites. What is clear, however, is that because of cost pressures, permanent headcount restrictions and the desire to use sophisticated technology, there is now a steady convergence towards using alternative legal services, particularly in more established markets such as Hong Kong and Singapore.
For further information, please contact:
Joan Oh, Konexo
joanoh@konexoglobal.sg
