Dec 4, 2017
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Legal Process Outsourcing

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Legal Process Outsourcing

What is legal process outsourcing?

Legal Process Outsourcing means exporting legal aid to foreign countries. Hence,the growth in Legal process outsourcing has also been boosted by the global economic slowdown.

”Law firms and corporate legal departments face mounting pressure to cut costs, an increasing number are choosing the Indian option”

The Economist Article named, ” The growth of legal outsourcing-PASSAGE TO INDIA” retrieved on 4th December 2017, original Article by RITU SOLANKI.

Law firms and other organisations  outsource legal aid from other legal support service companies. It is based on labour division. Trainees, document reviewers or interns are given lengthy and burdensome processes (i.e due diligence). It also include Legal services like litigation research, drafting contracts, patent services etc.

As a result the western firms started using legal process outsourcing as to save the time and money. They started outsourcing their legal work. India’s legal services are affordable and efficient. U.S. companies only pay one forth or one fifth of what it has to pay in U.S. for same work, to Indian outsourcing companies.

What are the methods of outsourcing?

The following are the various methods:

  • Direct Contract – In this contract, firm  wants legal services directly contacts legal process outsourcing vendor. There is no mediator.
  • Managed Outsourcing – In this outsourcing, there is a law firm in middle to keep a check on Vendor’s activities and equality of work as a mediator.
  • Required Outsourcing – In this form,  firms or organisation also outsources their work for cost cutting and to fulfill some of the legal requirements.
  • Multi-sourcing – This involves dividing the legal work between legal process outsourcing providers. It reduces the risk and takes advantage of each provider’s strengths. This method is also used when specialization is needed on matters of jurisdiction etc. It is also used for getting reasonable prices.

Why used?

One of the leading supporter of this process are corporate clients who are concerned about the rising legal expenses. The legal department of corporate entities also started using services of such providers. It controls the increasing legal cost.  Corporations normally uses it to outsource their small and not so sensitive legal work.

What are the benefits?

The corporations also outsource their legal work to Legal aid providers. This in turn helps them to reduce the legal cost and save the time. This is the biggest benefit for them. The attorney in major legal markets such as U.S, may charge from $150 to $500 per hour for legal aid while legal process outsourcing charges in small fractions. Legal departments of corporations also outsource their legal work. Now firms are also increasingly trying to provide expertise. The increase in bankruptcies and litigation gave a boost to legal process outsourcing in world. The  Global Financial Crisis reported that the market for outsourced legal work is booming in India.

 “It’s a very obvious way to cut costs and it is hard to refute once you have seen the good work that is being produced,”

The Economist Article named, ” The growth of legal outsourcing-PASSAGE TO INDIA” retrieved on 4th December 2017, original Article by RITU SOLANKI.

Legal process outsourcing firms in India can have also a annual growth of 200% due to increased need to save cost in U.S. Legal Outsourcing is growing rapidly in India.

What are disadvantages?

Cultural Differences:  There can be cultural and language  problem which can obstruct communication between onshore and offshore terms. Due to this, corporation suffers problems.
Confidentiality:  There can be confidentiality issues. Outsourcing sensitive legal information across the globe gives overseas vendors access to confidential information.
Communication Barriers: There can also be communication barriers because of unclear expectations, poor vendor responsiveness, a lack of understanding and ineffective governance. Companies with multi-shore operations must also dedicate time and resources to managing the offshore relationship, diverting attention from core business functions.
 Hidden Costs:  Hidden costs  include vendor management, quality control, contract management, employee turnover, vendor profit margins and increased operational costs.
Geographical Hurdles: Especially, relinquishing control of complex legal processes to a party across the globe can result in a loss of managerial control over people and processes. The practice of employing remote workers also can increase certain costs such as travel and training.

Services

Some of the services are provided by LPO:

  • Legal Research.
  • Reviewing Documents
  • Patent Drafting.
  • Simple legal filings.
  • Proof Reading.
  • Litigation Support.
  • Bankruptcy filing outsourcing
  • Legal Research Outsourcing etc.

 

 

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The Companies Act, 2013

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