Legal Outsourcing is the term that defines the concept wherein a law firm avails certain legal services from other law firms or firms providing such support services. Thus the term embodies the concept of sub contracting the work that was traditionally done by the law firm to another firm. If such support services are sought from a firm based in a country other than that of the seeking firm, the process is termed as off shoring. With globalization, technological evolution and increasing cross border transactions, the entities seeking such support has expanded to include individuals, corporations, firms, lawyers or any such person or institution that requires such support. The main services rendered by such firms include legal research and documentation, drafting memorandums or briefs, preparing due diligence reports, reviewing documents, intellectual property services, electronic discovery etc.
History of Legal Process Outsourcing
The demand for LPO’s have increased over the last few years with the increased awareness amongst law firms in the United States as well as the European Union that LPO’s would be able to provide quality work at fraction of the rates charged by their law firms. This is the most attractive feature of LPO’s. Another positive feature, at least with respect to India is that its legal system is similar to the UK common law system thus making it compatible with US and UK systems. Furthermore an advantage to the foreign firm seeking support services is that the quality of final work produced by them will be exceptional. This can be attributed to the fact that LPO’s generally spent more time and use more personnel with respect to the concerned task as opposed to a scenario wherein the complete supervision of the case rests in the hands of a single attorney. Thus the attorneys in such foreign firms are now in possession of such time that they could utilize in other value added legal services or in assisting the clients better. Furthermore the time gap between the countries have provided an additional advantage to legal professionals as there will always be a team working on some aspect of the case in a 24 hour period. Therefore the response time vis-a-vis a client would be reduced. An additional benefit that is put forth by supporters of the LPO boom is that such an arrangement reduces the need to hire junior attorneys, thus reducing the cost of firms with respect to training of fresh graduates who most firms are unable to hold on after the first year of work. All the above features and the fact that it offers a large pool of English speaking professionals ,in addition to its previous success in the fields of Business Process Outsourcing and Knowledge Process Outsourcing, has made India the primary destination for Legal process outsourcing.
Importance of outsourcing legal works and legal service
Law is sine qua non in every aspect of individual and business transactions. From time immemorial, people have fought the law for the protection of their rights and interests. With a rising awareness regarding legal complexities, there is now an everyday increase in the number of entities seeking legal counsel and remedies. Be it an individual or a multinational corporations, the need for timely legal advice, legal answers and action has become essential for survival and success.
The major functionaries who met the above needs were lawyers. After a certain point law firms also entered this domain. Multinational corporations devised their own method of seeking legal advice by attaching legal departments to their framework (in house legal departments). For years now lawyers, law firms and in house counsels have governed the area of legal transactions.
The last decade, however, has seen a rather interesting development in this field- the establishment of legal process outsourcing firms, popularly known as LPO. Though such a process was initially met with resistance, it has been observed by various agencies that this stream has witnessed steady growth since its conception. The fact that the growth of LPO’s was not hampered by the recent global financial crisis itself makes the industry an interesting study.
Growth of Legal Outsourcing and Scope
However there have been some concerns over the development of these industries especially with respect to the ethics involved in such outsourcing. Many believe that such a practice is in clear violation of attorney-client privilege. Others point out that the legal work is being done by those personnel who are not qualified to work either in the United States or the United Kingdom and are therefore not bound by the rules prescribed for legal professionals under the laws customs of these countries. Furthermore questions of data privacy and confidentiality have also risen. These questions have been carefully considered by several Bar Associations in United States who have concluded that such a process is ethical as long as certain standards and limitations prescribed are adhered to and certain precautions are undertaken.
Despite these concerns, many studies have conclusively shown that the growth of LPO’s in the past decade has been substantial, and predict a steady or exponential growth in the future. Forrester Research in a study concluded that India would receive legal work amounting to four billion dollars in 2015 alone. Furthermore, during the global financial crisis, the LPO industry witnessed a substantial growth in direct contradiction to the growth ratings of many other industries. The contract entered between Microsoft and Integreon Managed Solutions is further testimony to the fact that there is now global recognition and acceptance for these services. Furthermore several private equity firms have started investing in the LPO industry.
The LPO industry which was earlier limited to domestic firms has now progressed to being international in nature. Unlike its prior form, where it handled minimal legal work, LPO’s now carry out a whole range of legal activities and are gaining acceptance both amongst the legal and business community. All these factors are indicators to the fact that the LPO industry is here to stay.