Legal Process Outsourcing (LPO) has met and overcome numerous roadblocks since its inception. However, the initial apprehension to outsource by corporate organizations and law firms did not deter service providers. Instead, it served as motivation for them to push through this trepidation and conclusively prove that LPO is an integral part of the legal landscape. While the majority of the initial concerns of organizations were addressed, law firms were still not convinced that LPO was a viable option for themselves or their clients.
Given the recent structural changes in the business of law, legal spend is being monitored a lot more closely. No longer are organizations allowing law firms to command the high billing rates of the past. They are demanding lower pricing by insisting that LPO become part of the equation. Ironically enough, the tide has now turned against law firms, as they begin to face scrutiny from existing and prospective clients for not offering alternative and cheaper delivery models. Buyers deciding on whom to outsource their legal work to will actively seek out those law firms who have partner relationships with LPO service providers.
The majority of law firms that do work with LPOs typically do so on a project to project basis. Nevertheless, given the demand of having a preferred LPO partner necessitates an evolution of this association to a relationship based partnership. Law firms need to strive to make LPOs an extension of their firm much as they are an extension of a corporate in-house legal department. Not only will this allow law firms to offer clients the option of lower billing rates by outsourcing their low value , high volume work, but will also save them additional time and costs by eliminating the need for due diligence to choose the right LPO vendor. Furthermore, the continuous management of the service provider and the quality of work delivered by them can wholly be taken care of by the law firm, eliminating the need for client involvement as part of the work flow process.
Besides, LPOs that are open to working with law firms are willing to do so under the law firm's name and guarantee the same level of quality and value expected of the law firm.
The below graphic aptly illustrates the journey that law firms need to take and their destination, given that the majority of them are transitioning between the second and third stage,
Crafting relationships with LPO service providers will yield dividends for law firms. While these partnerships will still allow for the high value work to be kept in-house, it will also provide law firms the opportunity to offer more economical pricing for outsourced low-value work: a win-win situation for all parties involved - most importantly the client.