Myths and Realities of Legal Offshoring

Legal offshoring is a fast expanding industry worldwide; however several myths surround the concept. The significance of the legal provision demands addressing these issues. The emerging business volumes in the LPO industry stand testimony against the charge. The myths sometimes form a hurdle in off shoring legal work. In fact offshore outsourcing is an essential part of globalization that ensures an upper edge for many reputed legal firms in the very competitive world.

One of the primary concerns of outsourcing is the quality and the confidentiality maintained. Contrary to the myth, offshore legal service providers maintain a high quality of standards in paper work; they employ professional trained lawyers and paralegal staff and have a systematic approach to the work. The offices are maintained with necessary security systems from CCTV cameras, biometrically operated doors to secure computer networks. Confidentiality is greatly regarded by these firms to maintain the reputation in the industry. Firms offshoring work can also get the work insured against any malpractice.

Violation of Attorney-Client Privilege was a cause of apprehension in the initial years of legal outsourcing; as law accepts Attorney-Client confidentiality and exempts disclosure even in the Court of law, it was thought to breach the agreement on disclosure to a third party. Conversely various US based Bar Associations have maintained the creditability in outsourcing making the system ethical.

Many legal firms alarm of facing competition from the companies once they have access to the database of its clients. But these firms do not eye the market, they rather prefer to clench to their market of supporting the legal firms abroad. Their business infrastructure is persisted to suit the way.

Another baseless fear in the industry is about the loss of jobs. The panic could be well compared to the situation in the beginning of industrial revolution, the employment of automated machines, computers. It was well seen that such adventures lead to more jobs through methodical work. Offshoring helps legal firms to concentrate on core job increasing their efficiency and business thereby creating more employment.

Looking towards the realities over the myths of legal offshoring, it is a very important process every legal firm has to adopt to keep itself at the top of the market, sustaining themselves in the changing legal business models.

LPO = Good for Big and Medium Sized Organizations

To remain competitive, medium-sized firms in U.S and U.K are considering outsourcing their work to countries that can provide services at a lower cost, without compromising on quality. Medium-sized firms face major competitions from their respective industries and to survive among them, the key solution is to offer services at affordable cost. When the lawyers in their own countries charge exorbitant rates, achieving their target of affordable services is a far away dream unless they arrive at a suitable solution. It is at such turn of events, even medium-sized organizations consider outsourcing their work.

The basic legal services like document review in U.S law firms are expensive and costs minimum $150-$200 an hour. For the same or better quality of work, companies in countries like India charge around $20-$70 per hour. When services are available at such a fraction of the cost, we shouldn’t be surprised to see U.S and U.K based medium-sized organizations outsourcing their work to India. Especially in the case of a small or medium firm, when they are trying to provide a competitive service in their industry and the best way to reduce their cost is to outsource their work to a country, where the cost is considerably low.

When the attorney and lawyer fees within U.S are becoming increasingly unaffordable and the same high-value service is available at 20-30% of the cost, the tendency to outsource work to other countries counts as a natural phenomenon.

Medium-sized firms are happy for cutting short their expenses, otherwise spent for skilled managerial and technical resources, overhead costs and office maintenance costs. Outsourcing work helps the small and medium size firms be exposed to highly efficient and flexible talent pool, well versed in their attorney and law skills, English skills that can meet client requirements and help them sustain and grow their businesses.

We invite you to take part in the Global LPO Conference 2010 and meet your suitable vendor(s) for your small or medium-sized business. With our Breakfast Meeting, One-On-One Meeting and opportunity to evaluate vendors using Pilot Project Models, treat this opportunity as the best platform to find a cost-saving scheme for your business.

LPO Growth in Small Destinations

Small destinations are set to become major destinations for the legal offshore outsourcing industry in the future. The firms in these countries are fast developing to meet the newly found demand in the legal industry.

The monetary difference isn’t the only reason for the movement, the quality of work and the standards maintained are at par with the industry. With the advent of Information Technology, it made little distinction to outsource work to firm in the same country or overseas where the cost is far less. Many legal firms have now joined hands with global LPO companies in a bid to stay competitive reducing their overhead cost. And the recent economic recession have speeded up the decisions for the tie up.

Well trained talent pool along with the different working hours also help. Moreover, the small destinations that are taking a leap to the legal outsourcing industry also have a strong English speaking and well-educated population. They aim to serve primarily US and UK markets for legal offshoring services.

Some of the works outsourced are contract drafting and management, litigation support including e-discovery, document review and management, patent drafting support, transcription of legal data, legal research etc .

India is a major hub for legal outsourcing, said to be holding around 85 percent of the market share and the trend is tremendously growing. The present infrastructure of the legal industry in India easily adapts to the demand. A good number of efficient lawyers and paralegal staff add to its leverage. Seventy percent work for LPO firms in India comes from USA; Indian lawyers are preferred to do the paper work for their graze in grammar and writing skills. The legal system in India is based on British system enabling ease in handling technical legal work.

Philippines and India, have led the global legal outsourcing industry in the past year. And in the last one-year alone, the industry has seen a 40-50 percentage growth.

South Africa is rising to be an alternate center to India in the area of legal process outsourcing. It also projects the same advantages of the LPO industry in India.

Mauritius takes advantage of its multiple linguistic skills – English and French. Already, established in the BPO industry, and the strong workforce in both outsourcing industries, lawyers and good governmental support in their ventures, Mauritius will soon emerge as leading destination in LPO.

Governments across these countries have identified LPO as a major source of revenue and is supporting for its development. Kenyan government has initiated setting up of parks and special economic zones.

In the coming years, India is likely to face challenges from the emerging LPO destinations such as Philippines, Kenya, Mauritius and South Africa. However, the continuing demand will keep all the countries involved to have a steady growth in business. At Global LPO Conference 2010 – Buyers and Vendors Meet, buyers will have opportunity to meet vendors from these countries and find the best vendor for their business.

Outsourcing is here to stay …

Outsourcing as a trend has caught the imagination of world but like every successful thing it has its own critics.

In recent times there has been much of speculation about Mr Obama’s policies and its impact on outsourcing. But should we really need to be worried about it? Should we ring the danger bells? Is it a bubble which will burst or is it a flash in the pan?

I believe the answer to all these questions is a big No ...

There is a strong case for the outsourcing industry to stay and in fact grow at a very fast pace. Recent trends show an exponential growth in outsourcing especially in newer areas like legal outsourcing.

So, why am I bullish on the outsourcing industry and particularly legal outsourcing industry? Here is my rationale based on facts: Mr Obama’s comments are more towards IT and software industry and does not affect the legal process outsourcing. In fact American companies generate more than 50 per cent of their business outside the US. To be globally competitive, they have to depend on globally shared services.

Outsourcing started as a way of obtaining services from outside supplier at a cheaper cost than possible in one's own organization or country. It still is the primary motivation but is it the only one? Companies have realized that Outsourcing not only helps in achieving the cost advantage but also provides a quality and timely services.

The compulsion of US to outsource work is also an admitted fact by Mr Obama by the remark that "…. but not enough talent at home”. Hence, to carry out growth, the US companies will be requiring talents from outside.

Infact several researches show that Outsourcing has a beneficial impact on the outsourcing client company. It is no surprise that the biggest employers of the local talent are the companies who are the largest outsourcers.

Trends in the legal outsourcing are even more encouraging with big legal support service providers like Integreon and CPA Global signing up multi million dollar deals with the giants like Rio Tinto and Cameron McKenna respectively. They are also partnering with magic circle law firms notably Clifford Chance, Eversheds and Pinsent Masons showing keen interest in the legal outsourcing. Recently, Slaughters and May has also expressed a keen interest in outsourcing some of its operations to big Indian LPO’s like CPA to reduce its cost.

With trends like this I can say with conviction “Outsourcing is here to stay”.