A recent report published by Acumen Research And Consulting states that – the size of global legal process outsourcing will exponentially rise to a massive US$ 136.9 billion by 2032. Taking that into account, the supposed CAGR would stand at 27.7% – a major rise between the time period (2024 – 2032). Hence, one can state with utmost clarity that the outsourcing of legal procedures is on the rise!
This immediately brings forth the question of why legal outsourcing is on the rise. Also, are there any challenges or risks associated with this process? What do the future trends predict? Lastly, how important is choosing the right legal partner? We bring you the answers right here for you!
How crucial is legal process outsourcing in this industry?
With economic downturns and cost-cutting by firms being the norm of the day, especially after the effects of Covid-19 pandemic marred the world – LPO emerged as a much needed relief.
For the unversed, legal process outsourcing is a specific business model wherein – both corporations and law firms assign certain legal tasks or processes to service providers outside their domain. A wide range of tasks are entrusted to the concerned parties – from general research and drafting of contracts to complicated issues like that of intellectual property management.
They also provide litigation support and take care of certain regulatory tasks as well. On the whole, the aim in this case is to – let them sort non-core legal issues, while the in-house specialists can focus on more complicated cases.
Though the legal industry has been quite resistant to change, unlike other practices, it did accept LPO, given its assumed potential at a nascent stage. What started as a mere format of economic efficiency – soon turned into a specification wherein experts could categorically concentrate on high-value tasks. This led to a scenario wherein legal firms tapped into unrecognized potential and specialized legal expertise, giving them a chance to streamline their work and focus on the core competencies at every step.
Why is outsourcing legal work on the rise?
Given that you are still hovering on the page, one may assume that you have understood the basic concepts of outsourcing legal work. Let us now look at the precise reasons as to why this legal outsourcing process has been gaining traction in recent times –
1. Providing a cost effective solution
The primary reason why legal work outsourcing has become a major reformative aspect in the legal domain is – due to the fact that it provides a cost-effective solution. Outsourcing or extending work to third-party sources naturally comes at a lower cost.
Every legal firm functions within a tight budget, and despite the expertise, people to whom the work has been outsourced work for a lower rate (vis-a-vis the regular legal assistant). Therefore, the overhead expenses are drastically cut off, and the finances of the firm are utilized efficiently and in the right direction.
2. A drastic drop in administrative burden
Outsourcing legal work is not just about cost-benefit analysis but also brings respite to the administrative section of the firm. To explain things simply, when talking of outsourcing – in most cases, random and monotonous jobs are outsourced. Though these are crucial parts of a legal firm, not that much talent investment is required in this case.
Therefore, the legal associates who are attached to the firm can automatically concentrate on the important aspects of the case and leave aside these regular jobs to be outsourced.
3. Including a diverse talent pool into the work domain
When a firm is outsourcing legal work, by virtue of the process, it gets to tap into a diverse talent pool. Since this process is all about extending work to the concerned individuals who have the required degrees and specialization but all outside the firm’s immediate domain – this offers a chance to connect with experts who are adept at solving the critical problems that come across.
These collaborations not only help finish the project on time but also assist in addressing those talent shortages that are so prominent in this field. Once connected, retaining these talents is equally important, given that this amplifies the strength and capacity of the concerned law firm.
4. Improving the range of legal services
One of the biggest positives of outsourcing the legal processes is – enhancing the variety of legal services offered. As mentioned before, outsourcing is done primarily for cost analysis and to streamline the work.
In this process itself what happens is – certain specific skill sets are brought to the forefront. When that happens, clients are served better, which improves both the satisfaction of clients and gives the firm (which has outsourced the work) a certain competitive edge.
It is courtesy to these reasons that the extension of the legal work procedures has gained such popularity in today’s times.
Are there any challenges associated with this process?
Just like every work, even legal process outsourcing is not free from challenges. So, what are the risks associated with this process? Let us quickly provide you with the insights –
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Providing unauthorized access to third-party sources
For starters, the moment any work is outsourced, it so happens that the work is handed over to third parties. With that said and done, the concerned individual, courtesy of the nature of the job, gets access to crucial files, which is one of the biggest risks associated with this job profile.
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Maintaining the quality of work is an issue
Given that there is a third-party involved, maintaining the quality of work becomes quite difficult. Whether it is challenges in communicating or cultural practices followed at a certain place – there are chances that the work’s quality is affected.
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International laws comes with its own set of specifics
As you must be aware, there is a certain level of compliance that one must meet when working on outsourced projects. Now, it is common knowledge that different countries have their own set of laws, navigating which can potentially be a cause of concern. Therefore, one must always be concerned about the same and try to adhere to the regulatory measures.
Once you deal with these challenges, rest assured, the outsourcing process will become easier to deal with.
How important is choosing the correct outsourcing partner?
Despite the challenges associated with outsourcing legal work, it is, without a doubt, expanding in terms of usage in today’s times. Hence, you need to choose the correct legal partners/associates to ensure that your work is done in the best possible manner.
- The first point to note is their – specialization and expertise in the field. You must choose a service provider who has an in-depth understanding of that field to avert any possible glitch in the work process.
- Secondly, when picking a service provider, make it a point to ensure that they have the required capacities (in terms of infrastructure) to deal with the multiple demands associated with outsourcing legal work.
- Checking out the reputation of the concerned entity through online reviews and customer testimonials is another standard checking process that you must follow.
- Lastly, you must define the agreements signed and the ethical standards offered at work while looking for outsourcing of the work. This is an important factor to note when it comes to choosing an outsourcing partner.
It is only when the concerned outsourcing partner fulfils these obligations that you must go for them. At the end of the day, in the legal domain, more than anywhere else, security and trust matter, and you must take care to ensure that it remains as stringent as ever.
What do the future trends predict for this legal arm?
With the popularity of outsourcing legal work increasing with every passing day, the future, as mentioned before, looks promising. This industry, which was valued at – US$12.8 billion (in 2022), is looking to escalate to a massive US$100 billion and over (by 2032). Hence, the future is no less than spectacular.
With time, the technological advancements in this domain are increasing. With AI and automation coming into full force, efficiency and accuracy are touted to reach massive heights. Also, LPOs will soon emerge as a potential area of legal practice. With the complexity of legal issues rising, there is an incessant rise for such ‘expert outside advice’ that can precisely target and solve the problem categorically.
Parting thoughts
Assuming you have read this post well, you have gained clarity about legal process outsourcing and its extended usage in current times. With the evolution of technology, quite like others, even legal practices have undergone a paradigm shift. With cost-efficiency and improving the standard of work being the fundamental drivers, rest assured – this legal arm is here to stay for a long time now. As an aware individual, if you are seeking this service, you must opt for credible law firms that are qualified enough to deal with the intricacies and challenges that this field brings forth.
