Legal Process Outsourcing: Redefining the Legal Services Delivery Model

Abstract

In-house legal departments and their outside counsel are under pressure—and have been since before the global financial crisis in 2008—to do more with less. Much more. The great recession only exacerbated this pressure and led to a surge in the exploration of innovative legal services delivery models. As a result, two key questions came to the fore for in-house legal:

• Can we reduce or eliminate the requirement to undertake certain legal services; and

• For the services we must have, how can we perform them as efficiently and as cost-effectively as possible?

Subsequently, a new legal ecosystem has emerged in which, alongside outside counsel and corporate legal departments, legal process outsourcing (LPO) has arisen to play a crucial role in the transformation, re-engineering and cost-effective delivery of legal services.

This chapter will examine how advances in technology and the growth of LPO are closely aligned. It will hopefully put to rest any mistaken assertions that LPO providers are somehow threatened by technology’s ability to automate processes and reduce the need for human labor. It will then go on to address the journey that the traditional bastion of legal services delivery, law firms, have undergone in exploring the LPO phenomenon and what the profession can expect over the next few years. It is clear that if law firms wish to remain the first port of call for corporate legal departments and the primary conduit for the delivery of legal services, this is predicated on their acceptance of the LPO operating model. In a profession that has historically embraced change at a glacial pace, this acceptance can be characterized as a four-phased process, each of which is covered below.

Finally, this chapter will survey the latest practice frontier being explored by LPO providers—compliance. Much has been written and discussed over the years on the role of LPO in e-discovery, document review and contract lifecycle management. At each and every conference covering these topics, LPO provider sponsors and LPO panel sessions abound. However, given the perilous nature of burgeoning regulation and associated enforcement, it is not surprising at all that the LPO industry has been quick to step up to the compliance plate. However, before diving into these areas, it is important to try to define what the LPO industry actually represents within today’s legal ecosystem.