Legal Research

Trend Setting

By Gavin Birer

Fronterion, a consulting firm for outsourced legal services, recently revealed the Top 10 legal process outsourcing (LPO) trends for 2011 and released its second annual report outlining the prospects for the LPO industry in the coming year. 

The Top 10 LPO Trends for 2011 are: 

1) A Fundamentally Changing Legal Profession. Continued downward pressure on costs and the globalisation of legal services provide a perfect environment for LPO. Those who refuse to engage with LPO will increasingly become a minority – the industry can no longer be ignored.

2) Enterprise Approach. Many firms already outsource legal work at partner or department levels. However, LPO is more effective and efficient when a firm implements a firm-wide or ?enterprise? approach, led by senior management. 

3) Onshore Expansion. The growth in onshore and hybrid on-offshore delivery solutions will begin in earnest in 2011.

4) Expanding Client Geographic/Jurisdictional Reach. Demand for LPO services will spread to new markets.

5) Progressive Value Proposition. LPO providers will have to offer more services and a more progressive value proposition to remain competitive. Alongside traditional litigation support, LPO vendors may also have to offer contract portfolio servicing, compliance, diligence, human resources, medical and broader legal support functions. 

6) Increasing Technology Applications. As a result of the growing importance of technology, LPO vendors will use technology as a key selling point. Technology platforms will be used to offer diversified services and as a means for vendors to further embed themselves in client organizations. 

7) Dynamic Vendor Landscape. The unprecedented growth and industry consolidation initiated in the fourth quarter of 2010 will continue to shape the dynamic LPO vendor landscape in the coming year. Overall, these consolidation trends are positive for the industry as vendors emerge stronger, more capitalized and, most likely, considerably larger. 

8) Public Acknowledgement. The growing acceptance and adoption of onshore and offshore LPO will become more visible in the coming year. 

9) Divergent Vendor Approach. Competition means that LPO vendors will have to differentiate themselves from each other in terms of services offered and delivery models. No dominant model exists (yet) and a range of different approaches will emerge next year. 

10) Ethical Guidance. Regulatory bodies start to address the changing legal landscape. In the US, ethical commentary is expected from the ABA?s Commission on Ethics 2020. In the UK, announcements are expected from the SRA and the Law Society. Other jurisdictions that have been silent so far may follow suit, such as Australia, Canada, and South Africa. 

Whilst the research conducted by Fronterion was primarily focussed on the trends in the US and UK, the trends in Canada are very similar. Of the 10 trends mentioned in the report, three are worth highlighting. 

There is clearly a fundamentally changing legal profession in Canada, brought on by continued downward pressure on costs and the globalisation of legal services. Law departments and many law firms are acutely aware of this and are driving the hybrid on-offshore approach to legal services. For example, consider a scenario where a Canadian law department partners with both an LPO and a Canadian law firm for purposes of e-discovery document review. The LPO provides first level document review services. The law firm provides second level document review services; quality control; as well as traditional advisory services. This is a real life example of how LPO services are currently permeating the Canadian legal landscape.

Technology is (and will continue to be) a key selling point, both from a service delivery and a security point of view. Technology platforms are being used to offer diversified services and as a means for vendors to embed themselves in client organizations. 

At the end of the day though, LPO services (and the vendors of these services) will ultimately succeed only if they can deliver quality legal services at low costs. That?s an ?old-fashioned idea? delivered in a whole new way. 

Full post as published by Slaw.ca on March 10, 2011 (boomark / email).