Offshore the Law

March 5, 2009

Legal Process Outsourcing is being increasingly talked about as an enterprise management strategy. Broadly, outsourcing has reached to a level of managerial function from where an overall direction is given to the enterprise. The area of taking benefit from major cost efficiencies for businesses through offshore outsourcing has now evolved into a critical management tool to reinvest freed resources into other high value producing activities.

Several of the law firms are already offshore outsourcing their own legal support work. Businesses have traditionally relied on a combination of in-house legal departments and outside law firms for all of their legal work but now smart and business savvy corporate legal buyers are focusing on engaging with LPOs for a lot of legal work.

Globalization with the underpinnings of making the world flat along with maturing processes, technologies and legal-services-delivery-perspectives have created an environment where corporations now have a spectrum of choices from which to source legal services. A consolidation of legal staffers in low cost jurisdictions or outsourcing of legal work to Legal Process Outsourcing (LPOs) at significantly lower costs amalgamating mature legal processes have now made it possible to deliver high quality work from across the globe. Some large law firms have created their own ‘captive' units to offer lower cost legal services to their clients.

But for many corporate legal departments, the prospect of implementing and managing a global legal operation can be overwhelming as skill sets required to redesign business process and outsourced vendor management with respect to the practice of corporate law, may not follow the business process for doing legal work in-house. The legal challenges of privilege, supervision and conflicts may also pose some problems. Working across cultures and time zones with a business in offshore locations add to the complexities.

Thus in the backdrop of consolidation of common legal functions in lower jurisdictions like India it becomes imperative to focus on global sourcing issues. To take advantage of the relatively new legal services outsourcing options like offshore outsourcing, corporations must work towards organizing and optimizing legal services in the same manner when organizing shared corporate services. A corporation having its operation on a global scale may need attorneys in several other jurisdictions, but may choose to concentrate the bulk of its legal team in an offshore location like India thereby taking advantage of resources that costs less. Some organizations may not have sufficient legal work or sufficiently predictable volumes of certain types of work to warrant global shared legal services but situations that create sudden large volumes of documents to review are exactly the circumstances for which LPO vendors are well suited. LPOs have the ability to quickly deploy large teams of young lawyers using the latest technologies to assess the responsiveness, privilege, confidentiality of litigation-related documents or to review the assignments and termination clauses of acquisition.

The availability of global legal processes has arrived. The global recession as well as several Bar Associations authorizing offshore outsourcing of legal services has forced a vigorous evaluation of legal costs than ever before. Given the plain economic drivers and the advantage of moving to new legal sourcing models like corporate global shared service model and the Legal Process Outsourcing, globalization of legal services seems to be getting a significant foothold in 2009.

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