Legal Services

Are you considering offshoring your legal services? With the increasing pressure on firms to cut costs, improve services, and boost efficiency, legal process outsourcing (LPO) is becoming a popular option. However, before you make any decisions, it’s important to understand what’s involved.

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Legal Services

Legal Process Outsourcing and Offshoring: What You Need to Know

Introduction

Are you considering offshoring your legal services? With the increasing pressure on firms to cut costs, improve services, and boost efficiency, legal process outsourcing (LPO) is becoming a popular option. However, before you make any decisions, it's important to understand what's involved.

The Need for Change

According to a joint report by Thomson Reuters and the Center on Ethics and the Legal Profession at Georgetown University Law, legal firms are "vulnerable" and need to change their operating model. The report highlights competition as a game changer, with alternative legal service providers (ALSP) becoming formidable competitors in what is now a buyer's market.

To remain competitive, firms need to think differently about their business structure. "Firms wanting to be vital and solvent are overhauling how they do business. Smart firms have already retooled," writes Legal Marketing & Business Development Consultant Heather Suttie.

The Role of Technology

With the downward fee pressure faced by smaller firms, technology can be a valuable tool to improve efficiency and reduce costs. For example, artificial intelligence (AI) can be utilized to conduct document reviews that previously took junior lawyers many hours of work.

However, as Mark Johnson, chairman of Innosight, a strategic innovation consulting, and investing company points out, "new technology alone, no matter how transformative, is not enough to propel a business forward." Firms need to think about their business structure and how they can adapt to changing market conditions.

Conclusion

In conclusion, legal process outsourcing and offshoring can provide firms with cost savings and improved efficiency. However, it's important to consider the impact on the firm's operating model and the role of technology in achieving these goals. With the right approach, firms can adapt to changing market conditions and remain competitive.

The Importance of Client-Centered Legal Services

The Shift Towards Client-Driven Legal Industry

Legal business consultant Mark A. Cohen emphasizes that the legal industry is being driven by legal buyers, not firms. Whether you operate in a law firm environment or as an alternative legal services provider, survival into the next decade requires providing truly client-centered services.

Strategic Spending and Cost-Effectiveness

Legal buyers are becoming increasingly strategic about how they spend their money. They want to separate legal practice from legal services, use data, and take a broader perspective when it comes to utilizing people with necessary skills such as process, project management, technological, and business skills. They also expect cost-effectiveness from their legal service providers.

While clients don’t mind paying for high-value legal advice, they don’t want to pay top dollar for process work. Therefore, low cost centers have become a major factor in law firms wanting to win new clients and retain current ones. According to Ms. Suttie, clients now expect that a firm will have a low-cost center, either on-shore or offshore, operating as a back office for commodity work.

Offshoring for Lower Cost of Doing Business

Many firms have disaggregated services, taking components such as finance, IT, compliance, and process-based legal tasks to offshore locations. Offshoring level services allows them to lower the cost of doing business, maintain profit margins in an increasingly competitive market, and deliver on clients’ expectations.

Why is the legal services industry suited to offshoring?

The legal services industry is well-suited to offshoring for a number of reasons:

Long history of outsourcing in the legal sector

Legal process outsourcing (LPO) is not a new concept. In fact, the legal sector has been outsourcing tasks such as document review and patent searches for over 50 years. As a result, outsourcing is culturally accepted and supported by peak professional organizations.

Technology facilitates offshoring

Although technology alone cannot solve all the problems of offshoring, it can certainly facilitate the implementation of a wide range of strategies. Most legal service providers already use legal sector software, document automation, and secure communication infrastructure, which makes the physical location of certain teams largely irrelevant.

High level of cybersecurity and privacy measures

Successful offshore providers prioritize cybersecurity and privacy measures as part of their business model. This further minimizes the risk of data breaches and protects the sensitive information that legal service providers handle.

Flexible work hours

A lot of legal work can be done at any time, not just during business hours. Good offshore providers can provide access to people who can work outside of traditional business hours.

Offshoring makes good business sense

Legal process outsourcing makes good business sense because it can reduce costs, increase efficiency, and provide access to a wider pool of talent.

Frequently offshored legal services roles

Some of the most frequently offshored legal services roles include:

Legal Transcriptionist
Paralegal
Legal Secretary
Lawyer (Corporate, CPA, General Practitioner)
Legal Assistant
Liaison Officer.

Legal Services: List of Services/Tasks

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