How will 2011 spell out for LPO business?

How will 2011 spell out for LPO business?

The LPO Program today releases its forecast of the 2011 Legal Process Outsourcing market showing high growth in all areas of the legal community. The main users of LPO continue to be Corporate Law Departments, who are forecast to add $129m of spending in 2011. Law firms are shaking off traditional caution and are fuelling 41% of the projected growth. On these forecasts, it is expected that at least 9 high profile deals will be announced by law firms in the next 12 months.

Public Sector use of LPO is the largest new source of growth in 2011. Political considerations and ongoing caution across all sectors will support the growth of the on-shore delivery market, though India remains the most common delivery location.

Commenting on the forecast, Edward Brooks, of The LPO Program, said "The maturing of the supplier community is perfectly timed for buyers of LPO services. While very attractive cost savings open the door for LPO, the long term strategic advantages explain why a very sophisticated sector is actually signing on the line."

The LPO Program says that the Global LPO market is expected to grow 34% ($217m) in 2011, from a base of $640m, to $857m. Corporate legal departments are the largest drivers of the growth; closely followed by UK-based law firms. US law firms are very active in the market but continue to be cautious relative to their UK counterparts.

Overall the US market continues to be constrained by political considerations. Ongoing discussions in Congress continue to create an environment in which potential buyers of Legal Process Outsourcing services are treading cautiously. This will remain an issue until at least 2012 and is holding back US organizations from getting the full value of outsourcing.

The UK public sector will be the major new growth opportunity for the LPO market as it reacts to extreme cost pressures. While this segment of the market has been a regular user of external legal resources, full scale outsourcing of in-house legal functions is now firmly on the agenda across the UK, in particular within Local Authorities.

Reputation risk and political considerations will benefit low cost, onshore locations, namely Northern Ireland for the UK and relatively low cost US states e.g. Utah, Oklahoma. India continues to be the preferred offshore delivery location, with countries such as the Philippines and South Africa hampered by relatively low volumes of skilled resources.

Edward Brooks continued, "Ongoing economic uncertainty makes any organization wary of adding fixed costs and fixed capacity, and that makes LPO even more attractive. All deals benefit from significant cost savings, but market leaders are taking a strategic decision based on the value of having a variable cost base and a flexible talent pool."

The long term strength of the LPO market also looks very robust. Edward Brooks added, "We have seen a significant increase in the percentage of "Active Observers" in the market. We classify "Active Observers" as being subscribers to The LPO Program who move from being recipients of our free services and newsletters to paying for basic access the Program's Research Services. Active Observers are typically from organizations that are carrying out early stage analysis of their LPO options. Given the complexity of LPO projects, the deals that the Active Observers are contemplating are not likely to hit the market until 2012, but it is a healthy indicator of the future size of the market."

Survey Methodology Summary. The 2011 Projections are based on Total Contract Values of LPO deals that are currently being investigated by LPO Program clients. The LPO Program's client base closely reflects the shape of the legal services market in English speaking countries, so the core data can then be extrapolated across the full market to provide an estimate of the global market. We classify LPO as being where an organization changes how its legal activities are delivered, either to an in-house, captive model or a third party delivery location.

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LPO: Legal Process Outsourcing

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. When the outsourced entity is based in another country the practice is sometimes called Offshoring.

LPO services are a nascent but growing practice, with relatively consistent market growth since early emergence of LPO in 2000/01. LPO providers have established themselves in India, the Philippines, the US, Israel and Latin America. They traditionally offer services in the areas of document review, legal research and writing, drafting of pleadings and briefs, and patent services outsourcing.

According to a research conducted by Evalueserve, there were over 5,200 professionals in the LPO industry, as on April 2010, in India and the Philippines, contributing an annual revenue of USD 300 million, and this is expected to reach 18,000 professionals with an annual revenue of USD 960 million by December 2015. Research by The LPO Program shows the market size hitting $867m by the end of 2011. BPO Watch

Initially, legal process outsourcing gained traction in the Asian subcontinent. However, in recent years the so called "near shore", "back-door" "specialized legal firms" have sprung up to satisfy law firms and corporations that demand quality and confidentiality.

With a continuously shrinking world ruled by globalization, international law firms and legal departments of big corporate houses need to think strategically and act quickly in order to stay ahead of the competition. Outsourcing / Off shoring your high-end and routine legal work to reliable industry leaders will help you to improve the quality of the final output and also control inflated expenses incurred by essential legal support services.

Due to the desire of law firms to become a part of the global business, legal process outsourcing or LPO, is widely spreading and is becoming a hot favorite. Operating from its facilities in India, LPO India offers a great combination of legal expertise along with business acumen and superior quality services to deliver not only innovative services but also cost-competitive legal support services.

• Intellectual Property Right Services
• Para Legal Services
• Litigation support
• General Legal Research & Review
• Corporate Law
• Real Estate Law
• Family Law
• Contract Review, Amendments & Proofing

 

• Intellectual Property Right Services

In the ever-changing realm of trade & commerce, international markets have been flooded with new products and services emerging in the market place which require patent and trademark protection. Intellectual Property Rights aim at safeguarding your ideas and inventions from plagiarism and unauthorized use, so that you may align your Intellectual Property with the relevant commercial context and gain substantially in the process. LPO recognizes that Intellectual Property support not only requires knowledge of the law and complex technical issues, but also the skills and resources needed to manage the crucial work.

Protecting your intellectual property assets

Patent and trademark search

Patentability & infringement assessment

Application drafting

Status tracking

• Para Legal Services

paralegals are highly qualified professionals, they provide excellent services to clients by managing various aspects of any case, including interrogating witnesses, handling preliminary investigations, organizing and handling documents and databases, drafting documents, and preparing exhibits for use at client presentations, depositions and trial.

• Litigation support

Legal documents can become very messy when it comes to managing. Law firms across the globe necessarily have to appraise huge amounts of paper work, containing amorphous information. The discovery process requires valuable time, and the scrupulous attention of analytical minds to capture, streamline, arrange, understand, and present vital, case-specific information. 

kinds of services

• Data acquisition, conversion, & retrieval
• Objective coding
• Subjective coding
• Duplication identification & removal
• Accession numbering
• High volume printing & publishing of electronic files to CD.
• Text retrieval & searching
• Database management
• Optical character recognition
• Web & extranet enablement for multiple user access to information from multiple locations
•  leased line connectivity for quick & secure exchange of large volume data

• General Legal Research & Review

Legal research requires extreme levels of patience and requires one to be extremely argus-eyed. However, faced with resource crunches, tight budgets, and time pressure, most of the global law firms and corporate counsel find it mandatory to speed up their legal research activities. On the other hand, hurried research may result in missing out on crucial information and compromise in quality. Outsourcing your legal resea rch activities to LPO is a remedy and solution to overcome these problems.

• Real Estate Law

extensive consultancy in the buying of the property, from examining permits to develop the property, obtain environmental site assessment, warranties, ordering a title commitment, form of deed to insurance. Leasing a commercial space instead of committing yourself to owning commercial real estate can be an excellent move. But there are fewer tenant-friendly laws when it comes to commercial leases, and no standard lease agreements. Our lawyers help to negotiate and finalize the best deal on a commercial lease. Whether you are building a factory, warehouse, multi-storey complex or first time home, our lawyers help you in drafting separate contracts with an architect and a builder. We provide the following services, Check for seller actually owning the property, Check for restrictions that prohibit commercial usage, Find out if there are any municipal or homeowner association rules, property may be subject to covenants that dictate the size and type of home that can be built , lot served by utilities, Statutory warranties from the builder etc. The power of government to take private property and use it for public use is defined in eminent domain. If your property is subject to eminent, our eminent lawyers will guide you and your interests in public hearings and governmental procedures.

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. 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. 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.

The recession has put pressure on law firms to reduce their overheads related to marketing and sales, general administration, Information Technology, accounting, clerical, paralegal, and knowledge management. These overhead expenses account for about 17% of the total overhead expenses (of approximately 41%) that a typical law firm with 20 or more lawyers incurs in the U.S. By moving most of this work, which is non billable, offshore, these firms can reduce this cost to approximately 7%.

"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 attorneys working at less expensive rates. Besides the Indian legal system is much like its counterparts in the West. The other major LPO hubs are in Japan, France, Australia, South Korea, China, Argentina and the Phillipines. 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. 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