{{Short description|Using an outside provider for legal services}} '''Legal outsourcing''', also known as '''legal process outsourcing''' ('''LPO'''), refers to the practice of a [[law firm]] or [[corporation]] obtaining legal support services from an outside law firm or legal support services company (LPO provider). When the LPO provider is based in another country, the practice is called [[offshoring]] and involves the practice of [[outsourcing]] any activity except those where personal presence or contact is required, e.g. appearances in court and face-to-face negotiations. When the LPO provider is based in the same country, the practice of outsourcing includes agency work and other services requiring a physical presence, such as court appearances.<ref name="LawPro Magazine">{{cite web|title=Strategic resourcing: Thinking differently about delivery of legal services|url=https://virtualassociates.ca/wp-content/uploads/2024/03/LawPRO-Magazine.pdf|publisher=LawPro Magazine|accessdate=15 November 2012}}</ref> This process is one of the incidents of the larger movement towards outsourcing. The most commonly offered services have been agency work, document review,<ref>{{cite web|url=https://www.elvidence.com.au/demystifying-the-ediscovery-process/ |title=Demystifying the eDiscovery Process |publisher=elvidence.com.au |date=2014-10-17 |accessdate=2014-10-19}}</ref> legal research and writing,<ref>{{cite web|url=http://www.bizandlegis.com/legal-research/ |title=Legal Research |publisher=bizandlegis.com |date= |accessdate=2012-06-19}}</ref> drafting of pleadings and briefs,<ref>{{cite web |url=http://www.bizandlegis.com/legal-documents/ |title=Online Legal Document Services |publisher=Bizandlegis.com |date= |accessdate=2012-06-19 |archive-url=https://web.archive.org/web/20120625111547/http://www.bizandlegis.com/legal-documents/ |archive-date=2012-06-25 |url-status=dead }}</ref> and patent services.<ref>{{cite web|url=http://www.bizandlegis.com/services/intellectual-property/ |title=IP Legal Services by Intellectual Property Attorneys and Lawyers |publisher=Bizandlegis.com|accessdate=2012-06-19}}</ref>
Outsourcing is often used by companies to reduce operational costs and access labor markets in other countries, while also creating employment opportunities in recipient nations. Outsourcing is explained as turning over a project to an exterior provider that will execute the project on behalf of the central companies.<ref>{{Cite book|last=Peng|first=M.W.|title=Global Business|pages=102–104}}</ref>
This phenomenon has been a part of the legal experience since the 1950s, where it was restricted only to patents.<ref>{{cite web |url=http://www.cpaglobal.com/about_cpa_global/history |title=History of CPA Global |publisher=Cpaglobal.com |date= |accessdate=2012-06-19 |archive-url=https://web.archive.org/web/20120508155321/http://www.cpaglobal.com/about_cpa_global/history |archive-date=2012-05-08 |url-status=dead }}</ref> Later, firms began to contract certain services to back door firms. The process of subcontracting part of the legal process to different countries is at a nascent stage, with relatively consistent market growth.<ref>{{cite journal |last=Spencer |first=Beverly |title=Legal Recruitment and Outsourcing |journal=Canadian Lawyer |date=October 2000 |volume=24 |issue=10 |url=http://www.virtualassociates.ca/links/PDF/Cdn%20Lawyer.pdf |accessdate=19 June 2012}}</ref> Legal process outsourcing has predominantly been to countries that had previously taken advantage of the [[business process outsourcing]] wave. LPO providers have established themselves in [[Canada]],<ref name="LawPro Magazine" /> [[South Africa]],<ref>{{cite web|url=https://www.investcapetown.com/opportunities/business-process-outsourcing/legal-bpo/|title=Cape Town offers cutting-edge LPO solutions|website=www.investcapetown.com/}}</ref> [[India]],<ref>{{cite web|url=http://www.bizandlegis.com/india-desk.htm|title=Corporate Lawyers - Biz and Legis Law Firm - Litigation Lawyers|website=www.bizandlegis.com}}</ref> the [[Philippines]],<ref>{{cite web |last=Engardio |first=Pete |url=http://www.businessweek.com/magazine/content/06_38/b4001061.htm |archive-url=https://web.archive.org/web/20061106125709/http://www.businessweek.com/magazine/content/06_38/b4001061.htm |url-status=dead |archive-date=November 6, 2006 |title=Let's Offshore The Lawyers |website=journalist |accessdate=20 June 2012}}</ref> the [[United States]], [[Israel]],<ref>{{cite web |last=Easton |first=Jonathan |title=Legal Outsourcing to Israel is Professionally Wise and Economically Sound |url=http://exactlegalreview.com/legal-outsourcing-to-israel-is-professionally-wise-and-economically-sound/ |website=legal, journalism |accessdate=20 June 2012 |archive-url=https://web.archive.org/web/20121119215321/http://exactlegalreview.com/legal-outsourcing-to-israel-is-professionally-wise-and-economically-sound/ |archive-date=19 November 2012 |url-status=dead }}</ref> and [[Latin America]].<ref>{{cite journal|last=Breijer|first=Marieke|title=The Hired Help|journal= Latin Lawyer |date=2 July 2012 | volume=11 | issue=5 | pages=5}}</ref>
==Overview== The concept of legal process outsourcing is based on the [[division of labour]] principle, prevalent in law firms, where various time consuming and onerous processes like [[due diligence]] are delegated to paralegals, document reviewers or interns.<ref>{{cite web|url=http://www.abanow.org/2010/08/legal-process-outsourcing-and-%E2%80%98fly-infly-out%E2%80%99-lawyering-addressed-at-ethics-2020-commission-hearing-in-san-francisco/ |title=Legal Process Outsourcing and 'Fly In/Fly Out' Lawyering Addressed at Ethics 20/20 Commission Hearing in San Francisco |publisher=Abanow.org |date= |accessdate=2012-06-19}}</ref> This allows the firm to address the various legal issues that arise on a daily basis while being able to streamline productivity.
The process involves a contract, with due consideration, between both firms. The following are the various methods by which the process could be initiated:<ref>{{cite web |url=http://www.sddglobal.com/lpo-legal-outsourcing-dynamics.htm |title=The "Nuts And Bolts" of Legal Process Outsourcing |publisher=Sddglobal.com |date= |accessdate=2012-06-19 |author1=Mark W. Heaphy |author2=Sarvesh D. Mahajan |archive-url=https://web.archive.org/web/20130123211147/http://www.sddglobal.com/lpo-legal-outsourcing-dynamics.htm |archive-date=2013-01-23 |url-status=dead }}</ref>
*Direct Contract – This is the most straight forward means of establishing contact. The firm needing legal services directly approaches the legal process outsourcing vendor. *Managed Outsourcing – This is a case where the firm establishes contact with a legal process outsourcing vendor and retains a traditional law firm to coordinate the vendor's activities and to ensure quality control. *Required Outsourcing – This form of outsourcing occurs when the firm mandates a certain level of outsourcing in the legal process, either to reduce costs or to fulfill statutory requirements. *Multi-sourcing – This involves segregating the work assigned to LPO providers in order to reduce risk and take advantage of each provider's strengths. This approach is helpful in cases where expertise is required on matters of jurisdiction and merits. Having more than one provider "on deck" also allows a service recipient to obtain more favorable pricing. On the other hand, multi-sourcing can be more complicated than other approaches. Successfully managing multiple, competing providers requires strong and effective governance procedures.<ref>{{cite web|url=http://www.abanet.org/dch/committee.cfm?com=IC100123 |title=Section of International Law |publisher=American Bar Association |date= |accessdate=2012-06-19}}</ref>
===Reasons=== Among the leading proponents of this process have been corporate clients concerned with rising legal expenses. The legal departments of corporations began using the services of such providers. Soon these corporations began to pressure their legal representatives to outsource certain legal processes to cut costs.<ref>{{cite web|url=http://apps.americanbar.org/lpm/lpt/articles/mgt02081.shtml |title=Legal Process Outsourcing (LPO): 2007 and Beyond |publisher=American Bar Association |date=2007-10-30 |accessdate=2012-06-19 |author=Mark Ross}}</ref>
Cost saving is the biggest attraction for the western firms that outsource their legal work. India's legal services are widely considered affordable, efficient, and above all, skilled. For a legal job outsourced in India, the U.S. firm pays hardly one-fourth or one-fifth of what it has to pay in the U.S. for the same work.<ref>{{cite news|url=http://www.thehindu.com/todays-paper/tp-features/tp-educationplus/its-india-for-legal-services/article2266364.ece|title=It's India for legal services|newspaper=The Hindu|date=26 November 2007|publisher=|via=www.thehindu.com}}</ref>
==Advantages== Most firms and corporations outsource primarily to save cash, and this is considered the biggest advantage for legal outsourcing. While an attorney in major legal markets such as the US may charge from $150 to $500 per hour when performing rote services, legal process outsourcing firms generally charge a small fraction of that price. It has attracted major corporations to outsource specific work outside their legal departments. Many destinations for outsourcing have benefited from the upsurge in bankruptcies and litigations after the [[2008 financial crisis]].<ref>{{cite web|url=https://news.bbc.co.uk/2/hi/business/7968138.stm |title=India boom threatened by slowdown |publisher=BBC News |date=2009-03-27 |access-date=2012-06-19}}</ref><ref>{{cite web|url=http://amlawdaily.typepad.com/amlawdaily/2009/04/smithdehn-beats-back-libel-suit-in-win-for-da-ali-g-show.html |title=SmithDehn Beats Back Libel Suit for Da Ali G Show, Channel 4 |publisher=Amlawdaily.typepad.com |last=Triedman |first=Julie |date=2009-04-22 |accessdate=2012-06-19}}</ref> As reported in the ''ABA Journal'', "[t]he market for outsourced legal work is booming in India. While lawyers there are doing a lot of routine work, they are also handling some interesting legal matters, including work for the makers of movies and television shows."<ref>{{cite web|url=http://www.abajournal.com/news/article/indian_lawyers_handling_outsourced_work_do_more_than_document_review |title=Indian Lawyers Handling Outsourced Work Do More Than Document Review |publisher=ABA Journal |date=2008-05-12 |accessdate=2012-06-19 |author=Debra Cassens Weiss}}</ref> As stated in ''USA Today'', "'[y]ou could call it "Outsourcing 2.0" or maybe even "3.0." Now firms are increasingly trying to leverage expertise,' says Saikat Chaudhuri, an assistant professor in the business school at the [[University of Pennsylvania]]. Legal Outsourcing is 'growing very, very quickly.'"<ref>{{cite web|last=Leinwand |first=Donna |url=https://www.usatoday.com/money/economy/employment/2008-10-14-outsource_N.htm |title=More legal legwork gets outsourced to India |publisher=Usatoday.Com |date=2008-10-14 |accessdate=2012-06-19}}</ref>
===LPO industry and the 2008 financial crisis=== LPO firms in India had predicted an annual growth of 200% due to recession related litigation and the increased need to save costs in the US. Their expectations have not been met.<ref>{{cite web|url=http://economictimes.indiatimes.com/Infotech/ITeS/LPO-industry-to-suffer-from-economic-downturn-for-short-termReport/articleshow/5281754.cms |title=LPO industry to suffer from economic downturn for short term |publisher=Economictimes.indiatimes.com |date=2009-11-29 |accessdate=2012-06-19}}</ref> The major reason for this is that US lawyers themselves have started looking at alternative fee structures due to the recession and job losses.<ref>[http://www.allbusiness.com/legal/legal-services-law-practice-firm-billable-hours/14253614-1.html]{{Cite web |last= |first= |date= |title=Legal Process Outsourcing – Outlook and Opportunities |url=http://sundaytimes.lk/120115/BusinessTimes/bt12.html |accessdate=2014-10-19 |website= |publisher=}}</ref> In spite of setbacks, the LPO industry has seen growth of about 40-60% in the last year.{{citation needed|date=June 2012}} Although some areas of practice, such as real estate, have drastically collapsed due to the recession, some areas such as litigation, document review, and corporate compliance have gained ground, resulting in business directed to LPO firms in India.
==Criticisms== One of the major concerns with outsourcing is the potential for breaches of client confidentiality. In legal process outsourcing the issue of client confidentiality assumes utmost importance. The [[attorney–client privilege]] is a doctrine that says anything conveyed between an attorney and his client shall be treated with utmost confidentiality and is exempted from disclosure even in a court of law. However, when either party discloses confidential information to a third party or the opposite party, the privilege is deemed to be waived. During the early years of legal process outsourcing, many law firms hesitated to outsource their work.<ref>{{cite web |url=http://www.jenner.com/files/tbl_s69NewsDocumentOrder/FileUpload500/5253/Newman%20v.%20Bush.pdf |title=Archived copy |accessdate=2010-07-06 |url-status=dead |archiveurl=https://web.archive.org/web/20110716083609/http://www.jenner.com/files/tbl_s69NewsDocumentOrder/FileUpload500/5253/Newman%20v.%20Bush.pdf |archivedate=2011-07-16 }}{{Cite web|url = http://www.patentbaristas.com/archives/2010/06/03/legal-process-offshore-outsourcing-lpo-and-the-great-recession/|title = Legal Process Offshore Outsourcing (LPO) and the Great Recession|date = 2010-06-03|accessdate = 2014-10-19|website = |publisher = |last = |first = }}</ref> Critics and opponents state that, since communication is being sent to a country other than United States, the confidentiality is broken; hence, the attorney client privilege has been waived. However, [[American Bar Association]] clarified this in 2008, clearing the way for the development of legal process outsourcing.<ref>ABA Opinion on Legal Outsourcing</ref>{{full citation needed|date=November 2012}}
Another criticism is that people performing legal work may not be bound to necessary ethical standards.<ref>{{cite web |last=Barlyn |first=Suzanne |url=http://www.time.com/time/magazine/article/0,9171,1727726,00.html?imw=Y |archive-url=https://web.archive.org/web/20080406093955/http://www.time.com/time/magazine/article/0,9171,1727726,00.html?imw=Y |url-status=dead |archive-date=April 6, 2008 |title=Call My Lawyer ... in India |publisher=TIME |date=2008-04-03 |accessdate=2012-06-19}}</ref> The process of Legal Outsourcing has come in conflict with the Model Code of Conduct issued by the American Bar Association.<ref>{{cite web |url=http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_5_5_unauthorized_practice_of_law_multijurisdictional_practice_of_law.html |title=Rule 5.5 Unauthorized Practice Of Law; Multijurisdictional Practice Of Law |accessdate=20 June 2012}}</ref> However, there have been ethics opinions from various local bar associations (New York,<ref>{{Cite web|url=http://www2.nycbar.org/Ethics/eth2006.htm |title=The Association Of The Bar Of The City Of New York Committee On Professional And Judicial Ethics |publisher=New York City Bar |accessdate=17 November 2014}}</ref> San Diego<ref>{{Cite web|url=https://www.sdcba.org/index.cfm?Pg=ethicsopinion07-1 |title=Ethics Opinion 2007-1 |publisher=San Diego County Bar Association |accessdate=17 November 2014}}</ref>) and recently the [[American Bar Association]]<ref>{{cite web|url=http://www.abanet.org/litigation/litigationnews/2007/july/0707_article_outsourcing.html |title=Ethics Opinions Allow Foreign Legal Outsourcing |publisher=American Bar Association |date=2008-08-28 |accessdate=2012-06-19 |author=Steven J. Mintz}}</ref> that discuss ethical legal outsourcing and how to achieve it. However, there is criticism that the use of legal outsourcing creates a breach of ABA Model Rule 5.4 which prohibits attorneys from sharing fees with non-attorneys and, also, the prohibition on the practice of law by foreign non-attorneys.
==New frontiers== India is considered to be a major destination for legal outsourcing due to its availability of affordable English-speaking lawyers, some of whom are UK and/or US educated, and due to a legal system that is based on [[English common law]]. Recently, new frontiers for legal outsourcing have emerged in geographic areas closer to their target client markets. Other established LPO providers can be found in Argentina, Australia, China, France, the Philippines, Singapore, and South Korea, each offering unique advantages concomitant with their distinctive geographic location, language capabilities and regional expertise. "There is natural arbitrage between the excellent talented and low cost professionals in India, compared to the US and other developed jurisdictions, especially in the litigation management space", believes [[Zia Mody]], managing partner [[AZB & Partners]], one of the biggest law firms in India.<ref>{{cite web|url=http://barandbench.com/content/212/conversation-zia-mody-senior-partner-azb-partners#.U34C9vmSyRh|publisher=Bar and Bench|title=Conversation with Zia Mody Senior Partner of AZB & Partners |date=8 March 2011 }}</ref> Argentina, for example, is an increasingly desirable LPO centre for the U.S. client market due to its proximity in terms of its western hemisphere location, time zone similarity, and cultural ties to the United States.<ref>{{cite journal|title=Destination Latin America: A Near-Shore Alternative|journal=AT Kearney|year=2007|pages=2}}</ref> Sri Lanka, as an additional example, is an Indian competitor<ref>http://www.pwc.com/ca/en/media/release/2010-02-04-global-outsourcing.jhtml {{Dead link|date=February 2022}}</ref> whose success has come from a familiarity with British law, a strong economic infrastructure, online freedom, and marketing by Indian policymakers.<ref name="indiaedge">{{cite web |url=http://www.chinadaily.com.cn/bw/2009-08/10/content_8547375.htm |title=India's edge in legal process outsourcing |publisher=Chinadaily.com.cn |date=2009-08-10 |accessdate=2012-06-19}}</ref> LPO providers in India and in these new frontiers are increasingly utilizing onshore and offshore US and UK-licensed attorneys as part of their outsourcing offering<ref>{{cite web|author=VeritasLegalWeb |url=http://veritaslegalweb.blogspot.com/2010/08/expat-outsourcing-next-india.html |title=VeritasLegalWeb: Expat Outsourcing: The Next India? |publisher=Veritaslegalweb.blogspot.com |date=2010-08-24 |accessdate=2012-06-19}}</ref> as a means to create greater quality controls, expand into more sophisticated offerings, and instill higher confidence in the ethical treatment of client sensitive data.<ref>{{cite journal|last=McAfee|first=David|title=More Companies are Outsourcing Legal Work|journal=Los Angeles Daily Journal|date=30 March 2012}}</ref>
==See also== *[[Outsourcing|Management service organization (MSO)]] *[[Knowledge process outsourcing]] *[[Recruitment]]
==Notes== {{reflist}}
==References== *{{cite web|last=Crawford|first=Krysten|title=Outsourcing the Lawyers|url=https://money.cnn.com/2004/10/14/news/economy/lawyer_outsourcing/?cnn=yes|archive-url=https://web.archive.org/web/20041117084033/http://money.cnn.com/2004/10/14/news/economy/lawyer_outsourcing/?cnn=yes|url-status=dead|archive-date=November 17, 2004|publisher=CNNMoney.com|accessdate=19 June 2012}} *{{cite web|last=Naha|first=Abdul Latheef|title=It's India for legal services|url=http://www.hindu.com/edu/2007/11/26/stories/2007112650610300.htm|archive-url=https://web.archive.org/web/20071203111355/http://www.hindu.com/edu/2007/11/26/stories/2007112650610300.htm|url-status=dead|archive-date=3 December 2007|accessdate=19 June 2012|work=[[The Hindu]]|date=26 November 2007}} *{{cite news|last=Lakshmi|first=Rama|title=U.S. Legal Work Booms in India|url=https://www.washingtonpost.com/wp-dyn/content/article/2008/05/10/AR2008051002355.html|newspaper=The Washington Post|accessdate=19 June 2012|date=May 11, 2008}} *{{cite web|last=Prayag|first=Anjali|title=US corporates outsource legal work to India|url=http://www.thehindubusinessline.com/todays-paper/tp-corporate/article1661215.ece?ref=archive|publisher=The Hindu Business Line|accessdate=19 June 2012|date=June 16, 2007}} *{{cite web|title=LPOs to add more punch to India action|url=http://articles.economictimes.indiatimes.com/2007-06-25/news/28388663_1_lpo-matthew-banks-indian-bpo-players|archive-url=https://web.archive.org/web/20121005032458/http://articles.economictimes.indiatimes.com/2007-06-25/news/28388663_1_lpo-matthew-banks-indian-bpo-players|url-status=dead|archive-date=October 5, 2012|publisher=The Economic Times|accessdate=19 June 2012|author1=Mohapatra, Sushmita|author2=Thimmaya, P.P.|date=Jun 25, 2007}} *{{cite web|last=Tejaswi|first=Mini Joseph|title=Indian Legal Expertise Wins U.S. Court Battle|url=http://epaper.timesofindia.com/Repository/ml.asp?Ref=VE9JQkcvMjAwOS8wNC8yMiNBcjAxNzAw&Mode=HTML&Locale=english-skin-custom|archive-url=https://web.archive.org/web/20110706024426/http://epaper.timesofindia.com/Repository/ml.asp?Ref=VE9JQkcvMjAwOS8wNC8yMiNBcjAxNzAw&Mode=HTML&Locale=english-skin-custom|url-status=dead|archive-date=July 6, 2011|publisher=Times of India|date=22 April 2009}} *{{cite web|last=Tejaswi|first=Mini Joseph|title=Hollywood's Legal Work is Done in Mysore|url=http://timesofindia.indiatimes.com/Hollywoods_legal_work_done_in_Mysore/articleshow/2536733.cms|publisher=Times of India|date=13 November 2007}} *{{cite web|last=Vikas|title=LPO means business and opportunity|date=10 March 2014 |url=http://www.financialexpress.com/news/lpo-means-business-and-opportunity/1232329/0|publisher=The Financial Express|accessdate=10 Mar 2014}} *{{cite web|last=Vikas|title=LPO Industry in India: A ready reckoner|url=http://www.connect-goal.com/resources/thoughtwares/61-lpo-industry-in-india-a-ready-reckoner.html|publisher=The Global Outsourcing Association of Lawyers (GOAL)|date=13 Mar 2014|access-date=13 March 2014|archive-url=https://web.archive.org/web/20140313124642/http://www.connect-goal.com/resources/thoughtwares/61-lpo-industry-in-india-a-ready-reckoner.html|archive-date=13 March 2014|url-status=dead}} *{{cite web|last=Vikas|title=The Rise of LPO Business Model and its Impact on Legal Industry|url=http://www.hitechlpo.com/blog/the-rise-of-lpo-business-model-and-its-impact-on-legal-industry/|publisher=Hi-Tech LPO|accessdate=11 Feb 2014}}
[[Category:Legal professions]] [[Category:Outsourcing]]