India Has Large Advantage Over China

While China has become a powerhouse of outsourced manufacturing, India still retains a commanding lead in the outsourcing of services and business processes like LPO.  This will remain true for a number of structural reasons.   For starters, the English language is the dominant language of services outsourcing and clearly, India has a much larger number of English speakers.  But other factors will also continue to hinder the growth of BPO and LPO in India including concerns about data security (in China, the central government still exercises a lot of control over all forms of communication and data storage.)  For more on the subject, click  here.

Offering an Offshoring Option=Marketing Opportunity

There is some evidence that law firms have been adopting legal outsourcing at a slower pace than their own corporate clients.  There are a variety of reasons for this;  most obviously, lawyers are not eager to send billable work to another provider, even if the client will save money.   As one partner articulated to me in a recent meeting, sending even commodity work to an offshore vendor is a win, win, lose proposition for a law firm (where the corporate client saves on legal fees, the vendor generates the fees the law firm used to generate  and the law firm loses revenues but retains the risk associated with the engagement).

Americans Need Apply

While the Great Recession continues to send more U.S. lawyers packing, the job market in India offers some opportunities.   As the LPO industry expands in India, the need for U.S. trained lawyers (who are able to manage and train Indian lawyers in some of the nuances of American practice and American lingo) is growing.

Are U.K. Firms Adopting LPO More Quickly than U.S. Firms?

An article in the London Evening Standard suggests that many Magic Circle firms have already sent legal work to India and South Africa (e.g. Allen & Overy, Clifford Chance, Eversheds, Lovells and Simmons & Simmons.)  The article reports that 1000 more legal jobs may be sent to India by the end of the year.

While the article does not provide a lot of concrete evidence that this is actually occurring (it mainly quotes various individuals in the legal and LPO industries), I am left with the impression that the U.K. is taking more quickly to outsourcing legal work to India.  I cannot recall seeing an article which lists as many American law firms adopting the practice.

If it is really the case that U.K. firms are taking more quickly to offshoring legal work, perhaps this is because of the strong colonial history between England and India.  There is a large population of Indian immigrants in the U.K., particularly in London,  and I suspect that your average English solicitor or barrister has more contact with professional Indians than you average American lawyer.

Integreon Weighs in on LPO Report

An interesting analysis of recent ValueNotes research appears on Integreon’s blog.

Back in May, ValueNotes issued a report which concluded that LPO penetration had been relatively weak at law firms (only  3% of the surveyed firms had worked with an LPO.)  ValueNotes is one of the few companies that has conducted research on the LPO industry.  While Integreon suggests that this can be explained by factors other than a wholesale rejection of the concept (LPO is a nascent industry and lawyers are very slow to change), the  post suggests that under-reporting may be at play.  In short, individual lawyers may not be aware of what is happening at their firms. 

Free Ethics Seminar on LPO-With CLE Credit

Mark Ross of LawScribe, an LPO that provides services in several areas including e-discovery, IP, corporate transactions and legal research, is offering a free Webinar on ethical issues in outsourcing legal work.  I’ve heard Mark’s past presentations and they are very worthwhile.  Below is a description.

CPA Global Scores Large Outourcing Deal

Yesterday I noted that it is very difficult to evaluate the actual size of the LPO industry. Nonetheless, there are continued signs that the industry is growing.

Today, for example,  the Times Online reports that Rio Tinto, one of the largest mining companies in the world, is setting up a team of lawyers in India to complement their in-house team.

According to the article, this deal represents a much deeper commitment to working with talent in India:

Assessing the State of the LPO Industry

For several months, I have been looking for hard evidence that the LPO industry is continuing to grow and benefit from the global recession.  While there have been many articles in the legal and business press touting the notion that we have crossed the Rubicon (i.e.  that corporate law departments are now truly willing to embrace this new model and law firms are starting to go along for the ride),  I’ve reached the conclusion that no one really has a good handle on the actual numbers.

Learning to Think Like a Lawyer But Bill Like a Consultant

Billing by the hour (or fraction of the hour) has been common practice in the legal profession for half a century.   Until recently, many law firms had little reason to set fees in any other way.  Clients complained, but nothing really changed.

As hourly rates have continued to climb year after year, clients are now pushing back harder, particularly since the Fall of 2008 when the recession kicked into full gear. Corporate counsel are now demanding more certainty about what an engagement might cost—i.e. rather than simply hoping for the best.  The challenge for most lawyers, however, is that they are unaccustomed to thinking this way.

Latest Value Notes Study on LPO Use at Law Firms

Is the LPO glass half empty or half full

As reported by Mark Ross of Lawscribe, a West Coast LPO, Value Notes has released a new survey about the legal process outsourcing industry.  According to the report, fewer than 3% of the respondents are using LPO (the survey respondents were from mid-sized and large law firms.)  The study also reported that the principal concerns of the lawyers who have elected to use LPO is security.  The principal concern of lawyers who have elected not to use LPO is quality.