U.S alone accounts for a large share of the $250 billion global legal market. Out of this huge chunk, it is generally estimated that 3 to 4 billion can easily be outsourced. Except for the courtroom representation and agreement, all other legal activities can be outsourced. Hence it need not be mentioned that the potential of this industry is immense. The percentage of the distribution of lawyers in U.S is also equally interesting. According to U.S Info, 73% of the lawyers in U.S are employed in private practice and 10% are working in the legal department of the corporate world and these two are the major segments addressable for outsourcing.
For example, in India few of the LPO companies have started doing what the BPO or KPO were doing, prioritize their area of operation and target their prospective clients. The primary reason for this being the limitation of the availability of skilled manpower. The scenario is similar to the one faced by the BPO industry after its rapid growth: lack of skill workforce. A report by NASSCOM said, the number of law graduates from different Law Schools in India is around 15000 every year. Out of this number, hardly 1000 students enter LPO every year. This may be because the industry is still in its nascent stage. Language also acts as a constraint in some cases as the attorneys working for LPO should have a sound knowledge on English.
Although this number is sure to grow in future, it might not be enough. It is thus important for the LPO industry to decide from the very beginning on which area of operation it wants to focus. An effort to tap all possible fields will make its resource thin thereby increasing its vulnerability to the competitors. In a survey in U.S, 24% of CEOs showed their concern over the ever mounting litigation cost. So companies will be keen in identifying areas where they can outsource their legal work and bring down their litigation cost. Considered this perspective, the corporate sector is the prime target for LPO. Corporate industry is one of the many industries that are conducive to the concept of outsourcing.
One thing that the LPO needs to adapt directly from KPO and BPO is a regular maintenance of on-site resources. Since the industry is at its nascent stage, it is important that it gets regular nurture and care from offshore as well as on-site entities. Any LPO player genuinely interested in expanding its business should have 20% of its resource on-site. This can be a combination of local law school hiring or a combination of H1-B1-L1 visas. Whatever may the approach be, a successful LPO needs to maintain an on-site resource that will directly interact with the clients and a strong team offshore that will work for the client. Only a successful combination of these two can ensure the prosperity of a Legal Process Outsourcing unit.
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