Yes, as Jeremy mentioned, you can change the location to an external drive. Just select your library and change the location in the inspector.
And honestly, that slowdown issue when you put everything in the library is a myth.
This is another folder at the end of the day. The main factor for slowness is the computer’s power and the hard drive speed, and the space left. Right now, all the computers have SSDs, and external drives are SSDs, so it shouldn’t be a problem.