Selecting an alternative legal service provider (ALSP), which will often deploy technology more broadly than most law firms, can conjure fears straight out of a 1980s sci-fi film.

"You're putting your case in the hands of a machine, where you really don't know how good it is," says Bassi Edlin Huie & Blum founding partner Fred Blum. "So that always makes me nervous, maybe I've seen too many 'Terminator' movies."

But seeing no Sarah Connor in sight, more corporate legal departments and law firms are seeking out ALSPs for business consultancy, legal process outsourcing, contract services, and tech-powered document analysis, among other services.

Historically, ALSPs were viewed as providers of high-volume, low-risk document review work. However, over the past few years they have expanded their services and grown their clientele. While ALSPs were originally leveraged by corporate clients interested in cost-effective alternatives to some of their outside counsel, more recently, some law firms have also begun hiring ALSPs for client matters.

But despite growing their exposure, ALSPs aren't forced to meet wildly different expectations from their various legal clients. Indeed, many firms and corporations use common criteria to evaluate an ALSP when determining whether to leverage their services. Surprisingly, while these companies are often lauded as cost-effective solutions, pricing isn't the top factor in choosing an ALSP, law firms and corporate legal departments reveal.

Instead, it comes second to an ALSP's ability to meet a client's quality expectation, meaning word-of-mouth, exposure to their work and prior experiences go far in the ­growing ALSP market. If an ALSP can consistently deliver high-quality work, it likely has a long-term advocate that will speak highly of it to peers and send work its way.

While a client's needs and an ALSP's services dictate what other factors are essential during evaluation, technology and scalability are also consistent components reviewed during most vetting processes. However, not included in most sprawling questionnaires sent to ALSPs are questions concerning its diversity and inclusion programs. Despite increasing calls for the retention and inclusion of diverse outside counsel, corporations and law firms aren't holding their ALSPs to the same standard, arguing that an ALSP's hiring practices are out of their hands.

Cash Isn't King

Many law firms and corporate legal departments say if they can't trust the quality of the ALSP's work, hiring them isn't worth their time. The stakes are high when a case can ride on the ALSP's work being leveraged in litigation proceedings, Bassi Edlin managing partner Noel Edlin notes.

But outside the courtroom, law firms also need to trust their ALSP's ability to successfully collaborate with them when creating an end-to-end solution for the corporate client, says former Hogan Lovells innovation and digital head Stephen Allen. (In June, Allen announced he was joining ALSP Elevate as vice president of enterprise solutions.) A lack of understanding regarding quality and a lack of trust can lead to micromanaging by the firm and potential service gaps, he explains, which makes "onboarding projects a nightmare. You have to go over square-by-square each [task] again. You have to agree who will do what and you are retroactively filling that gap."

Based on the service needed, quality is also a key factor when deciding which ALSP is hired in a corporate legal department, says LegalZoom.com Inc. managing corporate counsel Joe Callaghan. "To the extent that what we're looking for is true legal analysis and services, the analysis typically goes: We need a lawyer, what lawyers do we know and trust? And it becomes more of a matter of word of mouth and reputation," Callaghan explains. "What we're looking for is skill sets without having to go through the full hiring process."

To be sure, recommendations are extremely valuable for an ALSP when they're looking to build their reputation and client base, ALSPs say. "Lawyers are skeptical by nature, and a recommendation from a trusted colleague that is aligned with your expectation will carry as much weight as any sales pitch might," says Level 2 Legal client solutions director Daniel Bonner. "Lawyers are there to manage risk—if you enter into an engagement with a client and you solve one of those capacity or capability challenges, it will [serve as] a referral when lawyers are talking to someone you worked with."

Varun Mehta, CEO of fellow ALSP Factor, also notes an ALSP's industry-specific experience is a significant factor considered by clients. "[Clients are] really digging into every detail or metric where they can suss out the actual experience you have in the work, and not just the process of doing the work."

Still, ALSPs are not only evaluated via recommendations. They're also being sized up while working for or against counsel. Hogan Lovells, for instance, prefers to throw its ALSPs into real-life matters and rate their performance simultaneously. "It's only in the heat of that battle that you really see what people are made of," Allen says. "We will work with them live, but we would have a backup." For example, when leveraging a document review team for the first time, he notes the firm would increase quality review before the final product is seen by the client.

However, while quality is important, some note the type of work needed dictates what they look for in an ALSP. Callaghan explains, "In the past, if we needed to do volume work, document review or contract analysis, in those situations speed, volume and efficiency start to creep toward the most important priority, in which case reputation, pedigree and the ability to perform legal analysis become less important. That's when technology starts to creep up on my priority scale."

Tech's Revolving Seat at the Table

An ALSP's technological abilities are important for some, but not for all. Contract staffing, for example, requires less emphasis on technology, while contract and workflow review may require a tech-heavy response, explains Hogan Lovells alternative delivery solutions head Rachel Dabydoyal. She adds that ALSPs that do leverage technology in their infrastructure must meet the firm's information security requirements.

"We need to be able to ensure our clients and regulators that the people we work with operate at the standards we operate at," Hogan Lovells' Allen explains. The law firm's security vetting process includes an ALSP filling out a multi-page questionnaire and sitting down with the firm's chief information security officer to confirm its cybersecurity claims.

However, Blum at Bassi Edlin notes that while understanding an ALSP's technology is important, it can be challenging. "They all have black box technology. It is always proprietary, and they won't tell you how it actually works and the actual mechanics of the algorithms," he says. But the concerns can be pushed aside if the software is accurate, industry-tested and user-friendly, adds Edlin. "In my mind, it's not the superiority of the technology but how user-friendly it is."

Big Law's Hogan Lovells and boutique Bassi Edlin exemplify a shared concern across legal to protect client data. However, the two firms' differing technology demands underscore the varying questions ALSPs face when approaching potential clients for work. "Certain buyers ask very specific questions about processes or features that will be key to their workflow. Others may only have a particular platform in mind or are solely focused on results, not the inputs or tools used," Level 2 Legal's Bonner says.

For some companies, technology is more about culture and not a specific workflow or product. "Even when we're looking at pure legal services, legal analysis, counsel, things like that, we're a relatively tech-forward company so we need someone who is willing to work within our system," LegalZoom's Callaghan says. "To the extent someone needs to have a sit-down conversation every day and walk through paper and things like that, that's just incompatible with our company culture and with the direction that our department is heading.

What Clients Aren't Asking For

While legal departments and firms' tech culture grows at varying stages, the legal profession has struggled to foster diverse and inclusive work settings. And if their ALSP selection process is any indication, it's unlikely they're making enough progress in that sector either. Despite a push for diverse outside counsel from corporate legal departments, ALSPs aren't required to retain diverse candidates in its ranks. Instead, some corporations and law firms say an ALSP's hiring and inclusion programs are out of their purview.

"It's a factor that we look at when we hire in-house. And then I rely on those people to choose the vendors appropriately. So I wouldn't say it's a criteria [for vendors] I have on a checklist," Callaghan says.

Law firms may also make it a point to hire qualified, diverse candidates in its organization, but their influence in an ALSP's hiring processes is very limited, notes Buchanan Ingersoll & Rooney litigation section director Michael Etkins.

"In terms of reviewers, if we are picking the reviewers we are certainly looking at that [diversity] in the résumés," Etkins says. "In managed review, the vendor is picking the reviewers, we do not have impact on picking the reviewers there."

To be sure, Hogan Lovells for one says it does inquire about an ALSP's staffing of ethnic, female and disabled employees to match the firm's culture initiatives. But overall, diversity and inclusion stats aren't a driving factor in the hiring of ALSPs.

"A lot of clients ask for supplier diversity requirements, [but] not as much as you would imagine," notes Level 2 Legal's Bonner. "The delivery of services should look like the consumer of the services and we take that very seriously."

Still, even when a legal client finds an ALSP that meets all of its diversity, quality, cost or tech requirements, it's not always a guarantee that the service provider will be a good fit. Instead, what's more indicative of if clients picked the right ALSP is whether everyone is on the same page.

"If there's a feeling we're all in alignment, they get it, they understand they are an extension of the team. Often the difference from an average or mediocre ALSP is in that experience—knowing you're all going in the right direction," Bonner says.