Legal Process Outsourcing (LPO) Seen As a “Permanent Trend” in the Legal Industry
Posted: Oct 03, 2013
Legal consulting firm Altman Weil released its fifth annual Law Firms in Transition Survey, which revealed that since the survey's inception in 2009, there has been wider acceptance of legal outsourcing as a business driver. In the survey, nearly 50% of law firm leaders believe that outsourcing legal work is now a "permanent trend", which is up significantly from just over 10% in 2009. The adoption of LPO is even greater among large firms. For example, almost 20% of firms with 250 or more lawyers are "currently pursuing" legal outsourcing (up from about 6% in 2010). And, the use of contract lawyers is even higher - 87% of large firms are "currently pursuing" the use of contract lawyers, which is up from 57% in 2010.
Outsourcing Experiences a Growth Spurt
In general, the goals of outsourcing have always been to improve efficiency, reduce costs and gain a competitive advantage. With this in mind, law firms have been outsourcing non-legal work, such as IT support, finance and accounting and helpdesk operations, for many years. Since the Great Recession began in 2009, law firms and in-house legal departments alike have been exploring Legal Process Outsourcing (LPO) as a strategy to achieve these same goals. Among the most commonly outsourced legal services are document review, legal research and writing, and patent services.
Now on-shoring has emerged as a new twist on the traditional LPO model. Some large law firms based in high-cost major metropolitan areas have begun relocating a variety of their back-office or support operations and employees to less expensive regions of the US that offer a lower cost of living and wages as well as access to pools of potential new hires. This new strategy is helping law firms to operate more efficiently and cost-effectively, which is the ultimate goal for most large firms, particularly those that experienced huge setbacks during the economic downturn.
Law Firms Need to Be "Lean and Mean"
Today, most law firms would cite profitability as their most challenging issue. By properly leveraging the best talent in house and outsourcing the balance of non-core services, law firms can focus on core competence, control expenses, eliminate waste and provide higher value to clients. If the right Legal Process Outsourcing provider is found - whether on- or off-shore - a firm can develop a long-term, symbiotic relationship that positively impacts the bottom line. As firms continue to think creatively about outsourcing as a business tool, legal outsourcing is bound to continue its evolution from "permanent trend" to "permanent strategy".
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