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Legal process outsourcing (LPO) is a strategy that involves obtaining outside legal assistance, above and beyond the resources that are already in house. This type of outsourcing may occur with corporations who maintain a legal team as part of the corporate structure, but who may require some additional assistance with certain matters. Even other legal firms may utilize LPO from time to time to help with complicated cases or just to farm out some of the workflow when the firm is inundated with work for clients. In all incarnations, the idea is to engage outside legal services that are competent and capable of managing the cases or projects in a manner that benefits the entity outsourcing the work.
There are several benefits to the idea of using LPO to manage various types of legal services. One of the more common advantages has to do with managing legal costs. In many cases, corporations can outsource relatively uncomplicated legal matters to outside legal firms for a fraction of what it would cost to have the higher paid in-house legal team handle those matters. What this does is create a situation in which the outside firm, possibly an offshore legal team, manages the more simplistic issues for a lower rate while the in-house legal team focuses on the more comprehensive and often complicated matters facing the corporation. The end result is that all the tasks are addressed in a reasonable time frame and overall cost the business less to complete those tasks.
In like manner, a legal firm may use the same basic approach to LPO by engaging the assistance of other firms who charge a lower billing hour rate and are capable of managing certain cases or at least certain tasks such as taking depositions and other matters on behalf of their client. This leaves the attorneys at the firm able to focus attention on more high-profile cases that are anticipated to generate more income for the firm, even while making sure that less profitable legal issues are resolved for their clients in a reasonable period of time.
Along with benefits, there are also a few potential liabilities associated with the concept of LPO. One has to do with competence and proficiency. Since the work is outsourced, the client does not have direct control of the outcome of those cases or assignments. This means that if the firm receiving the outsourced work does not employ the same level of expertise to the projects, it can reflect badly on the client firm. This in turn can result in a loss of reputation among current and potential clients that would in turn negatively impact the cash flow of the firm over the long-term.
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