Challenging Trends in LPO Industry

Outsourcing has been there for more than two decades. Some say that the process of Legal and Knowledge Outsourcing has been an intrinsic business offshoot when the regular and high end Business Process work was low or completely dried up. However, this is not the sole reason why LPO is considered a green pasture for the existing and upcoming service providers. What has made LPO business lucrative is the cost benefits and effectiveness of knowledge intensive high-end work. Best utilization of people assets is an essential strategy. With markets tightened and volatile, companies have relied much on acquisitions to drive growth and to this extent outsourcing has turned out to be a proven tool for improving services and containing their ever increasing operating costs.

The University of NSW survey has considered the three distinct categories of cost, innovation and risk factors as drivers for outsourcing and established their relevant importance in the decision making process. Law firms have finally woken from their slumber to face the reality that there are increasing array of legal work to be outsourced offshore. The exorbitant hourly rates simply do not wash any more with clients when it comes to routine level legal support work. Outsourcing their legal work has surely taken away the burden of ever increasing and nightmarish litigation and legal costs off the shoulders of Corporate Americans. On the other hand outsourcing their legal work has helped the U.S. attorneys and law firms reduce their establishment and professional costs without compromising on quality and professional timeline that is the foremost concern in the legal business. The New York, Florida and San Diego Bar associations have all concluded that subjected to certain safeguards there is no reason why a law firm cannot outsource offshore both support and higher value legal work.

Considering the high margins of profit, some of the big players of the industry are showing their affinity to tap these markets as well. Needless to say, that the technology plays a significant role in outsourcing offshore. It has a two-fold effect. Firstly, it enables the performance of increasingly more complex legal tasks at the simple push of a button and secondly, it has opened a vast pool of common law trained legal talent internationally, who are now available to assist law firms and legal departments in the U.S. and the U.K. Today legal outsourcing is considered a management strategy, very crucial to the corporate output and practice sustainability. It has matured much beyond purely cost reduction to a flexible business model and drive innovation. A recent study by PricewaterhouseCoopers, "Outsourcing comes of age: the rise of collaborative partnering", showed that three quarters of worldwide organizations say access to talent is an important or very important reason why they outsource. Last year we saw some crucial level of VC investment enabling the world's largest BPOs to enter the legal outsourcing business that has placed legal outsourcing companies in the scaled up position.

It is difficult to find a composite of legal aptitude in every law student. Hence the LPO companies are required to diligently impart training following similar methodologies and rigor to maintain quality control. In India the list of LPO players includes on the top, companied like LawScribe, Pangea3, or Quislex, to name a few are the market leaders. The advantage that they utilize in their favor are a band of skilled attorneys and paralegals training resources, legal tools, stability of their on-site office location and wide access to world wide legal research platform, which makes them trust worthy for the clients/law firms.

Apart from the United States and U.K., the most mature outsourcing region in Europe is Scandinavia, with Norway and Sweden the undisputed leaders. Language sensitivity is one reason why European companies often choose near shoring as compared to off shoring. There are, for example, many outsourcing suppliers in Romania and Northern Africa who offer services in French. In Germany, people largely prefer shared services, although outsourcing is popular in the manufacturing industry. That is now gradually being reversed. Legal Outsourcing too is a management science and the issue that is crucial here is one of change management for sure, lawyers historically are not the best managers. The issues pertaining to performance metrics and benchmarks may sound as Hobbit terms to most attorneys.