Offshore LPO News - Making Headway

The number of law firms to engage in legal process outsourcing (LPO) is still relatively low but is growing. In a recent survey by Legal Week, 15% of law firms said they use LPO services, with half believing that number would grow over the next year.

But while law firms weigh up their options, numerous corporations (including some of the largest global corporations) have clearly moved ahead by entering into their own LPO arrangements.

UK construction giant Carillion, employing 50,000 staff and with an annual revenue of around £5bn, has entered into a relationship with a UK LPO provider to conduct lower-level legal work in India, including due diligence. According to Carillion’s head of legal Richard Tapp

We are trying not to see outsourcing as a revolution but as an extension of how we expect the network to operate. If we get caught up on labels, one of the problems is the LPO label frightens people.

The Canadian Lawyer magazine recently ran an article titled Time to get on board. The captioned headline read: The legal process outsourcing ship has sailed and Canadian law firms need to make sure they’re not left behind by clients seeking more cost-effective legal services. 

According to Jordan Furlong, of Edge International Inc.,

LPO is not a threat to law firms, but it is a threat to the way law firms traditionally have gone about their business because what LPOs bring to the equation is efficiency, a focus on process, and a much more streamlined approach to the creation and delivery of legal work.

 

Hilary Clarke, a senior partner at McMillan LLP acknowledges that the firm has used an Indian firm to handle routine repetitive tasks in a cost-effective way, “to great advantage”

LPO is no longer a future promise. It is now a practical solution offered by Canadian-based companies with overseas operations that offer the cost advantages of offshore outsourcing while providing the reassurance of oversight and management by Canadian-based lawyers. 

LPO is a solution that has already been adopted by large Canadian banks and many corporate legal departments. Whether LPO is a perceived threat or a new opportunity for law firms, it is generally agreed that LPO represents acceptable change in the legal landscape.

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Comments

  1. Thanks for a very succinct summary of the current market.

    Regardless of whether you are pro or anti outsourcing, there is a market realignment going on. As with most major changes, this is the combination of many different factors e.g. changes in the economy, financial pressures, comfort with the outsourcing model (gained from outsourcing other areas), maturity of the internet…to name but a few. It is hard to fight against one of these factors, let alone their combined forces.

    When working with firms and departments to shape their LPO strategy, we always remind them that saying “no” to LPO is, in itself, an LPO Strategy if you can clearly articulate to your clients and internal leadership as to why this is the right strategy for you. At the very least all firms/departments should go through this exercise (the sooner the better) to evaluate how they can get LPO to work FOR them, not AGAINST them.