Increased regulations and litigation costs are some of the reasons that make legal firms think about legal spend reductions. Many firms are seeking to operate more effectively and efficiently at reduced rates and less overheads. Corporate legal departments are embracing legal process outsourcing (LPO) as an effective option to address these concerns. However, the prime thing is that before implementing LPO, corporate legal departments should determine the areas they need to outsource and the right time to implement such a solution.
Which Legal Services to Outsource?
Assessing whether a legal process is core or non-core to the organizations legal department is necessary in determining whether it is to be outsourced or not. This appraisal can be done by evaluating the sourcing of a particular service.
Examples of core processes in a legal environment include corporate legal representation and M&A (Mergers & Acquisitions) activities. Even though core activities are best carried out in-house, their specific components or supporting tasks can be outsourced. For example, transactional elements in core activities such as patents and trademarks can be outsourced to an external vendor.
Non-core activities that require less specialized knowledge (transactional in nature) tend to be outsourced most frequently to outside partners. When outsourcing supporting activities such as document review, contract/IP management and paralegal support, legal departments can determine those functions and processes that are mature enough to make a transition.
Mostly Outsourced Legal Processes
Legal processes that are commonly outsourced can be classified into five distinct headings such as the following.
Administrative support that include:
* Data extraction and data entry
* Electronic document management
* Legal billing services
* Paralegal services
* Secretarial services
Litigation support including:
* Document discovery
* E-discovery compliance
* Database creation and maintenance
* IP portfolio management
* Patent drafting and review
* Patent proofing and docketing
* Cease and desist notices
* Contract due diligence
* Contract management
Legal Research & Analysis
* Legal coding and indexing
* Statutory/case law research
When to Outsource Legal Services
When to outsource is a complicated question for many business owners. Corporate legal departments can fix the time to outsource, once they have decided on the services that can be assigned to a vendor. Before outsourcing, the company should evaluate whether the process is ready for outsourcing and whether it requires some change within the organization to make it ready.
Other situations when legal processes are outsourced include:
* Lack of skillful employees, technology/tools to carry out a specific task.
* The type of litigation services is another determining factor. For example, if a company faces greater need for litigation services, driven by a sense of emergency, they can seek the support of legal outsourcing services. On the other hand, if a company has a steady transactional workflow, they can consider an option between outsourcing and in-sourcing.
Legal departments can check out LPO strategies and providers with a view to find out the benefits of partnering with an outside agency. They can consider outsourcing a low risk legal function or a particular legal matter.
Moreover, while selecting legal services, legal firms should consider the guidelines laid down by the American Bar Association (ABA). The service provider should be evaluated for qualifications, security considerations, confidentiality, experience in dealing with the given process, and other regulatory requirements.