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Legal outsourcing

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This is an old revision of this page, as edited by Virtualpractice (talk | contribs) at 11:57, 15 June 2012 (I have added an overview and editied parts of the introduction that i felt were unnecessary . i have tried to make the article more informative. i have added sources , mainly external links to companies that are in the field of LPO). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

Legal Process Outsourcing (also known as 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. This process has been marked by the practice of [(Outsourcing)] any activity except those where personal presence or contact is required i.e appearances in court, face to face negotiations. This process is one of the incidents of the larger movement towards outsourcing[1] . The most commonly offered services have been document review[2] , legal research and writing[3] , drafting of pleadings and briefs[4] , and patent services [5].

This phenomena has been a part of the legal experience since the 1950's , where it was restricted only to patents[6] .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.[7]. One remarkable trend has been that Legal Process Outsourcing has been predominantly to countries that had ,previously taken advantage of the[{ Business Process Outsourcing}] wave. LPO providers have established themselves in Canada, India, the Philippines, the United States, Israel and Latin America.


Overview

The concept of Legal Process Outsourcing is based of the division of labour princple ,prevalent in law firms, where various time consuming and onerous processes like due diligence are delegated to paralegals,document reviewers or interns.[8] 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 the firms. The following are the various methods by which a the process could be initiated.[9]

1) Direct Contract -This is the most straight forward means of establishing contact , here the firm needing legal services directly approaches the Legal Process Outsourcing vendor.


2) Managed Outsourcing -This is a case where the firm establishes contact with a Legal Process Outsourcing vendor and retains a traditional law firm to co ordinate the vendors activities and to ensure quality control.


3) 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.

4)Multi-sourcing- This involves segretating the work assinged to LPO providers in order to reduce risk and take advantage of each provider's strengths. This approach is helpful is cases where expertise is required on matters or 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 some other approaches. Successfully managing multiple, competing providers always requires strong and effective governance procedures.[10]

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 $150–350 dollars/hour when performing rote services, legal process outsourcing firms can often charge a fraction of this. It has attracted major corporations to outsource specific work outside their legal departments.

In Gurgaon and Bangalore, India the industry has benefited from the Global Financial Crisis, due to the increasing number of litigations and bankruptcies. [2]

Teams of Indian lawyers have achieved notable success providing legal research and drafting services in high-profile U.S. litigation matters.[11]

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." [12]

As noted 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." [13]

Criticisms

One of the major concerns with legal outsourcing is the potential for breach of clients confidentiality. Secondly, another concern is that the people performing legal work may not be bound to the necessary ethical standards.[14]

However, there have been ethics opinions from various local bar associations (New York [15] San Diego [16]) and recently, the American Bar Association [17] that discuss ethical legal outsourcing and how to achieve it.

Finally, there is criticism that LPO's are in effect practising U.S law without a licence/U.S law degree. (e.g.writing memorandum, briefs, etc). Work traditionally given to a junior associate in a law firm.

LPO Industry and the Recession

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 U.S. Their expectations have not been met.[18] The major reason for this is that U.S. lawyers themselves have started looking at alternative fee structures due to the recession and job losses.[19] In spite of some setbacks, the LPO industry has seen growth of about 40-60% in the last one year. 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, among others, have gained ground, resulting in a good amount of business directed to LPO firms in India.

Issues of Confidentiality and Attorney–Client Privilege

Legal outsourcing is entirely a different game. In other forms of outsourcing, there are issues like client confidentiality and data security. However, legal process outsourcing has more complicated issues such as the liability of service providers and violation of the attorney–client privilege. During the early years of legal process outsourcing, many law firms hesitated to outsource their work.[20] 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.

Similarly, those people who are against legal process outsourcing claim that since communication is being sent to a country other than United States, the confidentiality is broken; hence, the privilege has been waived. However, American Bar Association clarified this in 2008, clearing the way for the development of legal process outsourcing.[21]

"The Global Lawyers"

India has become one of the most popular destinations for companies wanting to outsource legal work. This is so because there are certain very obvious advantages like availability of English speaking, US and UK graduated, qualified lawyers working at less expensive rates. Besides the Indian legal system is based on English common law, much like the US, UK, and Australia. The other major LPO hubs are in Japan, France, Australia, South Korea, China, Argentina and the Philippines. Some companies are also looking at setting up their own establishments in these countries to save costs. Many LPO providers are even using US-licensed attorneys residing in foreign countries who are willing to work at discounted rates.[22] Countries like China and Sri Lanka are also stepping in as tough competitors to India. However, Indian legal professionals seems to be the most suitable ones due to their legal education system.[23]


References

  1. ^ http://legallyours.blogspot.in/2011/03/plenty-of-career-opportunities-in-lpo. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  2. ^ http://www.documentreview.bizandlegis.com/. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  3. ^ http://www.bizandlegis.com/legal-research/. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  4. ^ http://www.bizandlegis.com/legal-documents/. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  5. ^ [1]
  6. ^ http://www.cpaglobal.com/about_cpa_global/history. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  7. ^ "Legal Recruitment and Outsourcing" 'Canadian Lawyer, October 2000, Volume 24, Issue 10'
  8. ^ 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/. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  9. ^ http://www.sddglobal.com/lpo-legal-outsourcing-dynamics.htm. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  10. ^ http://www.abanet.org/dch/committee.cfm?com=IC100123. Retrieved 15 June 2012. {{cite web}}: Missing or empty |title= (help)
  11. ^ "SmithDehn Beats Back Libel Suit in Win for Da Ali G Show" 'Am Law Daily'
  12. ^ "Indian Lawyers Handling Outsourced Work Do More Than Document Review" 'ABA Journal'
  13. ^ "More Legal Legwork Gets Outsourced to India"'USA Today' October 14, 2008
  14. ^ Call My Lawyer ... in India - TIME
  15. ^ New York Bar Association Opinion
  16. ^ San Diego Bar Association Opinion
  17. ^ ABA Ethics Opinions Allow Foreign Legal Outsourcing
  18. ^ LPO Industry to Suffer From Economic Downturn for Short Term (The Economic Times, November 29, 2009)
  19. ^ Is the Billable Hour Dead? (Utah Business, March 1, 2010)
  20. ^ Newman McIntosh v/s George Bush
  21. ^ ABA Opinion on Legal Outsourcing
  22. ^ http://veritaslegalweb.blogspot.com/2010/08/expat-outsourcing-next-india.html
  23. ^ India's edge in legal process outsourcing
  • "Outsourcing the Lawyers" by Krysten Crawford CNNMoney.com [3]
  • [4] "It's India for Legal Services" by Abdul Latheef Naha The Hindu, November 26, 2007
  • "U.S. Legal Work Booms in India" by Rama Lakshmi Washington Post, May 11, 2008) [5]
  • "U.S. Corporates Outsource Legal Work to India" by Anjali Prayag The Hindu Business Line[6]
  • "LPOs Add More Punch to India Action" by Sushmita Mohapatra & P P Thimmaya The Economic Times[7]
  • "Indian Legal Expertise Wins U.S. Court Battle" by Mini Joseph Tejaswi Times of India, April 22, 2009 [8]
  • "Hollywood's Legal Work is Done in Mysore" by Mini Joseph Tejaswi Times of India, November 13, 2007 [9]
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