Outsourcing Legal Services

Legal Outsourcing Services are not new in the market, but one of the fastest growing trends in the legal profession is the outsourcing of services through Legal Process Outsourcing (LPO) companies. This is one way for firms to lighten their workload and potentially cut costs.

Legal Process Outsourcing has helped legal firms have the best of both worlds. Investing in this process, legal firms outsource their requirements to external partners. The third-party service provider offers extensive support with a back-office set-up at significantly lower costs. This provides legal firms with a range of benefits and also helps them overcome the challenges associated with operating in their own country.

As LPO becomes more common, in businesses having their in-house legal departments, it’s natural to wonder what outsourcing legal work looks like in 2023? especially if you are considering handing off a special project or legal work to an external contracted legal team. 

Today, we're portraying an overview of legal outsourcing as it stands today, along with our predictions for the upcoming five years.

Why Outsource Legal Services?

•  Cost-Effectiveness

One of the main reasons companies consider outsourcing legal services is to cut costs dramatically and effectively. This is usually the driving force behind people’s decisions when outsourcing. When you outsource legal services, you can benefit from lower costs by only paying for the services you need. By outsourcing legal services, you can receive more significant cost savings because you can scale your investments accordingly as your needs fluctuate.

• Reduced Turnaround Time

When it comes to important legal projects, time is essential. Having both on-site and off-site teams working on a case round the clock will increase efficiency in completing demanding legal projects. One of the benefits of outsourcing is the ability to circumvent time zones so that the projects can be completed before time. For example, U.S. legal work outsourced to India allows 24 x 7 availability, hence extending productive business hours.

• Easy Access to Sophisticated Technology

In this technology-driven age, established legal firms and independent practices require high-end technologies to get things done promptly and accurately. Some of the technologies include tools for document management, document indexing, data extraction, data protection, transcription and many more. An external third-party company specializing in outsourcing of legal services leverages advanced technologies to streamline back-office tasks. Turning to such service providers eradicates the need to invest in high-end technologies and helps stay up to date with tech changes in the legal industry.

• Tax Advantages

If you outsource to a Legal Process Outsourcing agency outside the country where you operate, there are foreign tax credits available. This will also reduce your payroll taxes.

• Improved Focus on Core Operations

By outsourcing time-consuming legal tasks, your law firm can focus on core operations that will ultimately lead to a better client experience. This includes attending trials and interacting with clients to understand cases better.

• Improved Client Satisfaction

A legal firm must work towards maintaining great client relationships. Providing clients with timely updates and answering their queries without delay, are some important requirements that need to be met for cementing strong client relationships. Legal service outsourcing can help legal firms focus on client relationships in better ways. Besides providing updates, outsourcing can also help firms set client expectations right.

What to Keep in Mind Before Outsourcing Legal Services?

•  Hidden Costs

While cost-effectiveness is one of the primary benefits of LPO, there can be hidden costs such as rising operating costs, employee turnover, and vendor profit margins that are usually ignored. Law firms should ensure they get a detailed list of costs from the LPO partner.

• Attorney–Client Privilege and Confidentiality

Concerns about Attorney-Client privilege and data breaches prevent lawyers from trusting an external service provider. Do your research and background checks to make sure that the company has a proven track record of safeguarding confidential information. Also, check how communications between counsel and the legal process outsourcing providers are within the Attorney–Client privilege.

• Local Laws

Local laws may have strict privacy policies and data protection laws, the service provider and the purchaser are bound to share legal obligations. To avoid getting penalized, it is recommended that law firms analyze a country’s local and international laws before choosing an external service provider.

 Outsourcing Legal Services is Not Just for the Big Firms…

Outsourcing is more defined as using resources outside the internal operations of a business to keep things running smoothly. Small firms, in particular, might find themselves stuck with a time-draining case that will demand all hands-on deck for some time. But what happens to other clients while the entire in-house staff is focused on that one case?

At such times, outsourcing provides flexibility and costs savings over hiring additional staff to keep the small and big firms up and running efficiently.

Conclusion

As it can be noted, outsourcing legal services can be extremely helpful for your company and include various advantages such as cost-effectiveness, increased flexibility, and 24/7 service. If you are still in doubt whether to opt for legal outsourcing or not, here are a few questions you should ask yourself to make the right decision. 

• Are there legal tasks that take up a lot of your time but don’t require to be completed in-house?
• Does the worker need to be physically present in your office?
• Do you require someone to go to court?
• Is remote working required?

If one or more answers to these questions are “yes,” you should consider outsourcing legal services.

In today's competitive world, legal firms need to maintain the right balance between cost-cutting and competency on one hand and flexibility and accuracy on the other. Outsourcing definitely comes as a boon and brings each of these competing needs into the realms of possibility. The advantages that outsourcing offers are overflowing, offering maximum flexibility, efficiency, and scalability for your firm.

When you are ready to transform the way you manage your firm, get in touch with an LPO agency to ensure smooth and effective management of the business.