Outsourcing strategies for legal teams in 2025

Law firms vs. ALSPs: choosing the right partner

When legal departments seek external support, they predominantly turn to law firms. A significant majority (86%) of respondents said they have engaged with a law firm in the past year and dedicated an average of 37% of the budget to outside counsel. Law firms are particularly favored for high-stakes areas such as litigation (42%) and intellectual property (18%).
Alternative Legal Service Providers (ALSPs), on the other hand, are engaged far less frequently, with only 32% of legal teams utilizing them. Of those respondents that engaged with an ALSP, they reported allocating just 21% of their budget. While ALSPs are growing in prominence, particularly for more commoditized or scalable legal tasks, law firms still dominate due to their established relationships, specialized expertise, and brand trust.

Benefits of outsourcing to external counsel and ALSPs

Outsourcing has become a common strategy when legal departments need help managing their workloads. Here are the core benefits outsourcing offers:

1. Access to expertise
   The main reason for outsourcing to law firms (cited by 70% of respondents) is the lack of specialized expertise in-house. For example, intellectual property disputes or niche regulatory requirements often require external specialists, which law firms can provide.
2. Scalability
   ALSPs excel at scaling resources for routine tasks like document review or e-discovery. This flexibility ensures in-house teams can stay focused on strategic priorities without hiring extra headcount.
3. Cost optimization
   While legal departments prefer law firms for complex matters, ALSPs often provide a cost-effective alternative for operational tasks like contract management or compliance monitoring. Carefully dividing tasks between these two types of providers can substantially reduce overall legal spend.
4. Faster turnaround
   External resources often have dedicated teams ready to address challenges immediately, reducing time-to-resolution and helping legal departments meet tight deadlines.
5. Innovative technology access
   ALSPs increasingly leverage advanced legal technology, such as AI-based tools for contract review and analytics, allowing legal teams to work more efficiently without requiring significant upfront investment.

Frameworks for smarter resourcing decisions

To remain agile, legal teams need a framework for determining what to outsource, how to choose the right external partner, and when keeping work in-house is the smarter option.

Key considerations for outsourcing

• Complexity of the matter: For routine and repetitive tasks, ALSPs offer a cost-efficient solution. High-stakes, complex matters should remain with law firms, especially when there’s nobody in-house that has the right expertise.
• Budget constraints: Evaluate the cost-effectiveness of using ALSPs for tasks that don’t require niche expertise.
• Internal expertise: Tasks requiring knowledge not present in-house should be outsourced to save on execution time.

When NOT to outsource

Some tasks are better managed in-house to ensure tighter control and alignment with organizational goals. For example:

• Contract Lifecycle Management (CLM): With 81% of legal teams managing contracts internally (89% if the legal team is equipped with CLM software), investing in CLM technology can reduce reliance on outsourcing.
• Compliance and data privacy: Areas where intimate knowledge of company-specific processes and sensitive data is required should typically be handled internally.

Best practices for legal outsourcing

To ensure a successful outsourcing strategy, legal departments should follow these best practices:

1. Define clear objectives: Articulate what you need from external parties and align goals with measurable outcomes.
2. Vet your partners: Conduct due diligence to assess experience, success stories, and technology capabilities before engaging external providers.
3. Monitor performance: Establish KPIs and regular check-ins to track progress and value delivered by external vendors.
4. Leverage technology: Deploy tools like Legisway for better communication, tracking, and collaboration across internal and external teams.
5. Assess ROI regularly: Review outsourcing expenses and evaluate outcomes on a regular basis to refine your resource allocation strategy.

The future of legal outsourcing

Outsourcing is becoming more about forging strategic partnerships that enhance the overall performance of in-house teams. Advancements in legal tech are transforming how legal services are delivered, providing legal departments with more options to balance cost, quality, and scalability. By adopting technology to streamline processes, legal teams can reduce costs while maintaining high standards of service.