When examining whether legal process outsourcing (LPO)—or a particular LPO provider—fits a company’s legal needs, leaders should consider three key areas:
1. Current legal needs. A company should evaluate its overall legal needs and its use of legal services to see which services, if any, are suitable for LPO. Factors to consider include the extent to which the services relate to core versus non-core business functions, the extent to which the services recur and the current internal and external spending for the services. Services that frequently recur (such as preparing patent applications) or that are high-volume (such as litigation document review) may be considered for outsourcing to a lower-cost LPO provider.
2. Inherent risks. Organizations need to consider confidentiality risks when sending legal work to an LPO provider, particularly an offshore provider. Companies should confirm that the LPO provider has the required security and risk management protocols in place, including the necessary training and screening of its personnel. Companies also need to be confident that the LPO provider is not administering services to other clients that may create a direct legal or other conflict of interest in the litigation at hand. Given the potential legal implications, an LPO provider should agree not to engage such clients in the future.
3. Cost, quality and capacity. In terms of cost, an LPO provider can offer companies individualized, flexible price arrangements tailored to the size and type of a specific legal engagement. Cost, however, should not be the sole criterion for selection; quality is just as important. An LPO provider should commit to providing a specific level of service based on concrete metrics for assessing the LPO’s performance and the quality of the product. Finally, companies should look for an LPO that has the flexibility to build capacity at a moment’s notice—an increasingly common need in the fluctuating environment of corporate litigation.
Questions to ask when considering corporate LPO include:
• Is my organization seeking to reduce internal and/or external legal spending?
• Does my organization have high-volume or regularly recurring legal work?
• Have potential LPO providers adequately addressed my security and risk concerns?
• Would my company benefit from scalable pricing arrangements for legal work?
• Would the potential for flexible staffing create new efficiencies in my legal group?
• Could measurable service levels help my organization to establish a higher standard of quality in our legal work?
• Does my approach to legal service delivery appropriately balance insourcing and outsourcing?
Across the globe, corporate legal departments are recognizing an immediate need to reassess their internal and external legal spending. Legal executives should carefully examine the LPO business model to determine whether they can capitalize on the potential cost savings and related benefits provided by the resurgent LPO industry. After all, the volume of corporate litigation may be growing, but that does not mean that your budget has to follow suit.