Overview: LEGAL OUTSOURCING

Profile of the Author: Manishikha Mondal is a 2nd Year BB.A. LL.B. (H.) student of Neotia University.

Introduction

Legal outsourcing comprises of two words, ‘legal’ meaning ‘related to law’ and ‘outsourcing’ meaning ‘procurement of goods and services from an outside supplier or contracting work out’. It simply means that law firms get their work done by a third party. Legal outsourcing is also called Legal Process Outsourcing (LPO) which is similar to Business Process Outsourcing. It is offshoring when the legal work is outsourced to a different country. Outsourcing was first adopted in India by Bickel & Brewer in 1995. It has become a common practice in many firms as any work can be done inexpensively through this process. LPO is based on the concept of division of labour that already prevails in law firms where time-consuming processes like due diligence are delegated to document reviewers, paralegals, or interns. This helps the firms to concentrate on the intricate legal issues that arise daily so that the firm can function smoothly and efficiently. LPO’s provides various services like legal research, contract management, deposition summaries, document review, patent research, IP services, digital content watching, patent renewal, litigation document, patent analytics, data verification, IP support services, trademark renewal, trademark search, etc.

It is sub-divided into two categories:

1 Man-power intensive functions such as document conversion, document review, legal coding and indexing, legal transcription, etc.

2 High-value services such as general legal research, patent, and due diligence. Patent and legal services include patent portfolio management, patent assessment, freedom-to-operate search, statutory and case law search. Due diligence services involve technical, legal and financial analysis of companies for mergers and acquisitions, content drafting, and reviews of contracts.

Scope

The corporate legal sector is drastically expanding in recent times as it intensified at a growth rate of 8.2 percent annually from 2005-06 to 2011-12. In a country like India labour is available at a cheap rate as more than 2,00,000 law students graduate every year which reduces the cost of importing legal service by 30-80%. India has more numbers of graduates and English-speaking licensed attorneys and other legal workers than most of the other countries that makes India a better option for a high-quality legal service provider. Working as a corporate legal service provider is a good alternative for law graduates as it helps break the stereotypes of being a lawyer post-graduation. It is a platform to provide a safe and healthy workplace to everyone, especially women.

LPO is a modern concept designed to provide legal work services. It provides expertise in the field of law. Subsequent to achieving excellence in BPO, other countries expect India to excel in the field of LPO too. Section 59 of the LLP Act provides that people from other countries can also setup their LPOs in India and do both outsourcing and offshoring from India. During the time of recession, most of the companies outsource to save cost.

LPO is initially a contract between two law firms made with certain considerations. Some methods by which the process of LPO could be initiated are as follows: [1]

1 Direct Contract: This is a simple way of entering a contract. In this process, those firms that need legal services directly approach a legal process outsourcing firm.

2 Required Outsourcing: This form of outsourcing occurs when the firm achieves a certain level of outsourcing in the legal process either to fulfil statutory requirements or to reduce costs.

3 Managed Outsourcing: This is where the firm sets up contact with a law firm for a legal process outsourcing firm and holds a conventional law office to manage the seller’s activities and to guarantee quality control.

4 Multi-sourcing: This includes isolating the work allocated to LPO suppliers to reduce the risk. This methodology is useful in those situations where aptitude is required on issues of jurisdiction. More the providers more are chances of reduction in price for same work. Effectively dealing with various contending suppliers requires solid and viable administration methodology.

Challenges

On the other hand, LPO poses some threats to the privacy of the firm or an individual. A client expects the highest level of confidentiality in the matters. The lawyer needs to protect the contents of a document shared by a client. The communication or document should not be disclosed in the courtroom if it is privileged as disclosure might lead to harm to a party. Initially, numerous law firms were reluctant to delegate their work. Critics highlight that when the correspondence is outsourced to a nation other than India, privacy is breached.

Another issue is that individuals working at LPO’s may not be bound by imperative ethical norms as advocates. In the USA, there is a Model Code of Conduct provided by the American Bar Association (ABA) for people working as legal service providers. Nonetheless, there is a concern that the advancement of LPO’s might break ABA Model Rule 5.4 which precludes lawyers from offering expenses to non-lawyers. Additionally, it denies action on the law by unacquainted non-lawyers.

LPO’s come with their advantages and disadvantages, so the firms should carefully consider them before outsourcing the work.

Disclaimer: This article is an original submission of the Author. Niti Manthan does not hold any liability arising out of this article. Kindly refer to our Terms of use or write to us in case of any concerns.

FAQs

Q1 Does the adoption of Legal Process Outsourcing impact the quality of work?

A1 No, the LPO is based on the concept of division of labour. The law firms outsource or delegate time-consuming processes like due diligence to document reviewers, paralegals, or interns. This helps the firms to concentrate on the intricate legal issues.

References

[1] Narendra Kumar, ‘What is the Scope of Legal Process Outsourcing in India?’ (Enterslice 7 August 2019) <https://enterslice.com/learning/what-is-the-scope-of-legal-process-outsourcing-in-india/#:~:text=The%20following%20are%20some%20methods,the%20legal%20process%20outsourcing%20vendor.&text=Multi%2DSourcing%20%E2%80%93%20The%20multi%2D,in%20order%20to%20reduce%20risk.> accessed in 2020.