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Legal Process Outsourcing (LPO): What is It?

Working in the legal industry is a fulfilling way to spend your working life -  but can be very taxing due to the complex nature of work performed.

There are multiple clients to look after, deadlines to be met, and reports to be filed. It can be challenging to keep up with the work, particularly if you are a smaller firm that doesn’t have an in-house legal team to satisfy your legal demands.

This is where legal process outsourcing (LPO) can be a real lifesaver - it can help take on some of the workload so that you can focus on other aspects of your business.

In this article, we will discuss legal process outsourcing in further detail, including what it is, how it works, various third-party considerations, and the benefits that your business can reap from utilising this type of service.

Definition of Legal Process Outsourcing

LPO can be defined as the contracting out of law-related services and processes to a third party provider.

This usually involves sending work overseas to be carried out by lawyers in another country, who can often provide a more cost-effective service.

LPO is not a new concept — it has been used by law firms for many years as a way to reduce overheads and increase efficiency. In recent years, however, the LPO industry has grown exponentially, with an increasing number of firms looking to outsource their work.

The global LPO market was estimated to be worth $11.6 billion in 2021, and is expected to grow to $61.7 billion by 2027 — a Compound Annual Growth Rate of 30.5%.

It’s something that isn’t going away anytime soon, so it’s vital for businesses to understand how it works and the benefits that it can bring.

Example of Legal Process Outsourcing

Imagine you are a law firm based in the United States. You have been approached by a client who wants you to handle their divorce case.

This is a complex case that will require significant amounts of research, document drafting, and court appearances. It’s the kind of case that would typically be handled by a team of lawyers, paralegals, and support staff.

Unfortunately, your firm is already stretched thin and you simply don’t have the capacity to take on this case. This is where LPO comes in.

You could outsource the case to a third-party provider, who would be responsible for carrying out all the work on your behalf.

This would free up your time so that you can focus on other cases, and also save you money as you wouldn’t have to hire extra staff to help with the workload.

There are many different types of LPO providers, who can offer a range of services. Some will simply carry out the work on your behalf, while others will also provide additional support, such as project management, document drafting, and court appearances.

It’s important to find a provider that you can trust and who has the experience and expertise to handle your specific case type. Once you’ve found a reputable provider, you can start reaping the benefits of LPO.

Once you have outsourced the work, all that remains for you is to keep a watchful eye on the third-party provider so that you can ensure that they are meeting your expectations.

This can be done by setting deadlines and checking in on the progress of the work on a regular basis.

Assuming all goes well, you will have successfully outsourced the work and freed up valuable time and resources that can be better utilised elsewhere.

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Which Situations are Most Relevant for LPO?

There are a number of different situations where LPO can be beneficial. Here are some examples:

You Need Extra Support During a Busy Period

Let’s say you’re a law firm that has just won a large contract. You will need to increase your workforce to meet the demands of the new work, but only for a short period of time.

In this instance, LPO can be used to supplement your in-house team and help you get the job done without incurring the cost of hiring full-time staff.

You Need Specialist Expertise

If you require specialist legal knowledge for a particular project, it can be more cost-effective to use an LPO provider than to hire someone in-house.

You’re Expanding Into New Markets

If you’re looking to expand your business into new markets, LPO can be used to set up a local presence quickly and efficiently.

If any of the above resonate with you, then LPO could be the answer.

It’s important to remember, however, that LPO is not a one-size-fits-all solution — you need to carefully consider whether it’s the right option for your business before making any decision regarding the matter.

What to Look for in a Third Party Provider

When considering legal process outsourcing, it’s important to choose a reputable and experienced provider that you can trust. After all, you will be entrusting them with important work that needs to be carried out efficiently and effectively.

Here are some key things to look for when choosing an LPO provider:

  • A proven track record in delivering quality services: there is nothing like past experience and a solid history of happy clients to inspire confidence in a provider.
  • A robust infrastructure: you need to be confident that the provider has the necessary resources in place to carry out the work, including experienced staff, up-to-date technology, and secure data storage facilities.
  • Flexibility: look for a provider that is able to offer a bespoke service that can be tailored to your specific requirements. This will ensure that you are getting exactly what you need, rather than a one-size-fits-all solution.
  • Cost-effectiveness: of course, you will need to consider cost when choosing an LPO provider  –  but beware of providers that offer rock-bottom prices, as this could be a sign that they are cutting corners somewhere.
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Tasks Able to be Outsourced

There are a wide range of tasks and processes that can be outsourced to an LPO provider. This includes, but is not limited to:

  • Document review
  • Drafting pleadings and other legal documents
  • Legal research
  • Deposition summaries
  • Discovery responses
  • Patent applications
  • Contract management

Essentially, any task or process that can be carried out remotely can be outsourced. This allows you to free up time and resources so that you can focus on other areas of your business.

It is usually the case that simpler tasks that can be completed by anyone are outsourced. The more complicated tasks are usually kept in-house to ensure that they are performed to the highest standard.

3 Benefits of LPO

There are many benefits that your business can reap from utilising LPO services. Here are three of the main ones:

1. Cost Savings

One of the biggest benefits of LPO is the cost savings that it can bring. By outsourcing work to another country, you can often reduce your costs by up to 60%.

This is because lawyers in other countries often charge much less per hour than their counterparts in developed nations.

2. Increased Efficiency

Another big benefit of LPO is increased efficiency. When you outsource work to another country, you can get the work done much faster than if you were to do it in-house.

This is usually the case since there are often more lawyers available to work on the project, and they can often work longer hours than lawyers in developed nations.

3. Improved Quality

One final benefit of LPO is the improved quality of work that you can expect to receive. This is because LPO providers are often very experienced and have a wealth of knowledge to draw upon.

They also have access to the latest technology and resources, which can help to improve the quality of the work that they produce.

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3 Challenges of LPO

Despite the many benefits that LPO can bring, there are also some challenges that need to be considered. Here are three of the main ones:

1. Language Barriers

One challenge that can arise when outsourcing work to another country is the language barrier. This can make communication difficult, and may result in misunderstandings or errors.

It’s vital to ensure that your LPO provider has good English skills, or alternatively, you may need to provide them with translators.

2. Cultural Differences

Another challenge that can arise from LPO is cultural differences — which can make it difficult to understand each other’s working practices and expectations.

Combat this by making sure both sides are aware of these differences, so you can both try and bridge the gap by communicating effectively.

3. Time Zone Differences

Finally, time zone differences can also put you in a sticky situation.

When tasks are required to be completed at very short notice, it might be night-time where the third-party provider is located. This can make it very difficult for urgent tasks to be completed on time.

4. Legal System Differences

This one might be obvious, but offshore outsourcing means the third-party might not be familiar with your local legal system.

They may be proficient in the legal system in their own country, but inexperienced in dealing with yours — which can lead to lower quality work.

To avoid this issue, consider nearshore outsourcing as an alternative.

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Final Thoughts

Despite the challenges, LPO can be a great way for businesses to save money, increase efficiency, and improve the quality of work. If you’re considering outsourcing some of your work, be sure to weigh up the pros and cons carefully to ensure that it’s the right decision for your business.

The benefits show that LPO can be an extremely helpful way to manage your workload, save costs, and gain access to specialist expertise. If you think it could be beneficial for your business, get in touch with a reputable LPO provider today.