Could 2013 be remembered as the year that LPOs truly came into their own? Anecdotal evidence certainly suggests that the market is maturing, with leading LPOs playing an integral role in the evolution of the legal profession. The industry is also managing to attract highly skilled talent with deep legal expertise. With LPOs utilising state-of-the-art technology and cost-efficient processes, law firms are now beginning to see them as valued partners in the legal eco-system.  

According to Anand Sharma, Director of IP and Legal Support Services at CPA Global, a factor behind this has been the challenging economic climate in recent years has necessitated that businesses innovate to be able to create distinct identities for themselves in the marketplace. “The pressure to do so, coupled with budgetary restrictions, has compelled companies and their internal departments to increase productivity and efficiency with the same or decreased funds available at their disposal to do so,” he says. “Intellectual property and legal functions are no exceptions to this. As a result, corporations and law firms alike are seeing more value than ever in associating with various legal service outsourcing providers to ensure flexible, competent and cost-effective solutions without compromising on work quality and service levels.”

Greater recognition

Over the last 12 to 18 months, a lot has changed in the LPO industry - greater recognition by corporate clients and global law firms, exponential growth because of this increased acceptance, and the efficient use of new technology and improved processes to ensure legal process management. If the situation five to six years ago was about LPOs engaging with major law firms and corporations, then the last two to three years have seen the industry undergo geometrically progressive expansion because of the increased acceptance of legal process outsourcing companies in the market - particularly by the GCs of Fortune 500 companies. “We have been able to show consistently that through the amalgamation of technology and improved, sophisticated processes, we can deliver much more despite having limited resources, and this has helped give tremendous returns to our clients,” says Ram Vasudevan, CEO of legal process outsourcing services provider QuisLex. According to him, the LPO industry has not only grown in size, it has also grown in terms of the quality of work it now handles.

Additionally, corporate legal departments and law firms are increasingly becoming familiar with working in association with legal services outsourcing providers, and LPOs are, on their part, going all out to deliver long-term, sustainable value to their clients. And this familiarity and comfort level are now resulting in corporate clients and law firms looking to get more and more sophisticated work done from their providers. “Numerous corporate legal departments and law firms are now creating panels of legal outsourcing firms whose services they will call upon as required. This is similar to the traditional law firm panel - a sign that outsourcers are becoming more established within the legal industry,” says Sharma. “The increased confidence in outsourcing providers is also helped by the quality and experience of the management teams amongst the leading players,” he adds.

Collaboration and cooperation

With confidence growing, the practice of law firms working together with legal process outsourcers to better manage resources, risks and costs is picking up speed. While the bulk of the business for LPOs used to come from major corporations more than half a decade ago, today several law firms with whom LPOs have been working on a regular basis refer them to their clients. This is, in turn, giving LPOs an opportunity to bring their value-added services to the table and the best possible solution to the client. “Law firms are looking at collaborations on a long-term basis instead on a project-to-project basis as was the case some years back,” says Vasudevan. “This itself speaks volumes about how corporate legal departments and global law firms are now seeing LPOs as an effective way of reducing costs, and yet getting the highest quality of work by employing restricted resources.”

 “Savvy law firms can use outsourcing providers to lower their overall cost structure, which would allow fixed fee arrangements to become more attractive and/or allow law firms to increase their margins,” adds Sharma. He also says that small- and medium-sized firms can engage third-party providers to augment their existing staff whenever they have high-volume projects, such as large documents or contract review projects. This allows smaller firms to compete with the big multinationals, who often are selected because they have armies of young lawyers at their disposal to handle large volumes of such work.

Modernisation for the future

Today LPOs are aiming to exert a permanent pull on clients through the use of sophisticated technology, cost-efficient processes and a committed workforce which is trained constantly, according to Vasudevan. A combination of these three go a long way in maximising output and giving greater returns to the client, thus making LPOs an inseparable part of their clients’ modernisation. Sharma agrees. “Flexible staffing capabilities and the ability to ramp up or down during high-volume projects are seldom possible within a corporate legal department or law firm setting,” he says. “Outsourcing providers have contributed towards doing just that - a general lowering of costs in certain types of legal work. This has allowed clients, especially corporate clients, to get large volumes of legal work finished in an economically efficient manner.”

And with LPOs becoming “mandatorily wanted” by in-house legal departments and law firms, will come the ‘inclusive approach” of working – a mechanism that is not driven as much by cost savings as it is by quality of work, says Vasudevan.

A lot of LPOs started with providing discovery and contract services to several large corporations. These corporations, in turn, started looking at outsourcing their legal work to LPOs to achieve cost savings initially, which was later followed by improvements in processes by LPOs with the advent of more sophisticated and advanced technology.

But with the adoption of the inclusive approach, if corporations see that the quality of work is of the highest standards, yet the cost of getting it done is not great by a large margin, then it would be a very compelling option for them, adds Vasudevan.

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