Activity in the LPO space is increasing. Wipro is the latest company to provide legal process outsourcing services to Microsoft. For those who haven’t heard of Wipro, let me enlighten you. Wipro is a $5.7 billion revenue IT and Business Process Outsourcing (BPO) organization with a presence in over 50 countries. What’s an IT/BPO giant like Wipro doing in the LPO space you might ask? It’s a good question. But if I were to guess, one has to think that they see the opportunity to service the growing demand for low cost, quality legal services. Wipro are reportedly planning to provide LPO services to Microsoft’s intellectual property and licensing group worldwide.
If you thought that Wipro was alone in its foray into LPO, think again. Infosys and Tata Consulting Services – two other IT/BPO giants – have also launched LPOs.
Elie Mystal, an editor of Above the Law, recently stated in his article Outsourcing: It’s Not Just About the Money, that while some law firms are committed to fending off outsourcing until the bitter end; others are preparing themselves for the fight to remain the primary legal advisor to their clients. I for one have stated repeatedly, that LPOs should focus on the “lower end” work; while allowing local lawyers to focus on the “higher end” work. By doing so, everyone gets what they want. Clients will be happy because they are getting quality services at lower rates. Law firms will be happy because they are billing high rates for “higher end” work – for which clients will gladly pay. And associates will be happy because they are not forced to do the repetitive work anymore. Sound idealistic? I don’t think it is.
There is no question that LPOs are forcing change. Early adopters have already shown that there can be many benefits. As business conditions remain uncertain, legal departments will need to look for cost savings and flexibility. LPO remains an attractive option.
Jordon Furlong shared some interesting insights recently in his article The evolution of outsourcing. In his view, there is an acute need to bring innovation to how legal services are carried out — a need that LPOs have helped to highlight. LPOs are re-engineering the means by which legal work is done. I share the same view.
Evalueserve, a global research and analytics firm, recently conducted a study of the LPO industry. Key findings of the study include:
- The LPO industry is the fastest growing sub-sector in the Knowledge Process Outsourcing domain.
- Almost all of the offshore outsourcing work is being sent from corporate counsel. Law firms have been hesitant.
- Knowledge management will be a growth area for the LPO industry.
Although law firms have been hesitant to embrace LPO, I predict that you will see a marked increase in the use of LPO services by law firms in two areas. The first is in the area of non-billable work. Examples include research work. The second is in the area of contingency fee work. Examples include plaintiff side personal injury work.