They may take away our lives, but they’ll never take… OUR LAWYERS!

It’s remarkable how quickly an outsourcing concept can spiral from concept to reality, when the ability to achieve real cost-savings is augmented by accessing insights and flexible resources. And that’s exactly what’s been going on with Legal Process Outsourcing (LPO) since we first broached the concept here two years ago.

Since then, we have witnessed a remarkable confluence of forces establishing the field of Legal Process Outsourcing (LPO):

*A maturing supplier market that cemented confidence in the theory of LPO;

*A growing volume of LPO supply that puts downward pressure on prices but confirms the wisdom of the early movers;

*Law firms remaining under margin pressure;

*In-house legal departments in the public sector and private sector facing significant cost pressure.

They may take away our lives, but they'll never take… OUR LAWYERS!

At HfS, we came across a stray Scotsman wandering the streets of Manhattan, eager to espouse the virtues of LPO to anyone who wanted to hear them – and, guess what, we did.  Ed Brooks joins the HfS contributing analyst stable, having had 11 years in the outsourcing and offshoring sector leading over $5 billion worth of deals for the likes of Accenture, EDS and more recently TPI, in areas as diverse as Finance and Accounting, HR, Clinical Research, Customer Services, and Legal Process Outsourcing. Today, Ed runs his own expert program to support LPO buyers, discretely named “The LPO Program“.

Ed has contributed his first RAPIDInsight for HfS, entitled  The Legal Process Outsourcing Landscape in 2011, that sets the scene for the industry.  He begins with the edict:

LPO:  Act Fast; The Offer Ends Soon; First Come, First Served

Anecdotally, these movements are summed up by two specific events in late 2010. First, in November, Thomson Reuters acquired one of the major LPO providers, Pangea3, buying out the same VC firm that had invested early in YouTube, Oracle, etc. While LPO has been around for many years, this was a major global corporation buying into this sector, giving it a new level of validity. No one would have been surprised if a traditional outsourcer like Accenture, IBM, or Wipro had been the buyer, but Thomson Reuters is a data and information company that sees the value of the “Knowledge” more than the “Process Outsourcing.” Combined with the astonishing number of LPO suppliers (we are currently tracking 135 on our LPO Market Watch database), this demonstrated genuine supply-side maturity.

Second, around the same time, at a conference in the Scottish town of Stirling (think Braveheart and you are in the right place), a survey showed that 15% of local authorities were considering outsourcing their legal departments. Public sector cost pressures in the UK are well documented, so the attraction is obvious. The surprise is that the legal department ranks as high as fourth in the priority of functions companies consider outsourcing.

Ed Brooks, Contributing Analyst for Legal Process Outsourcing Strategies, HfS Research

In the wider context it now appears that the Public Sector “gets” LPO, in-house legal departments “get” LPO, and our research shows that even the 83% of law firms that “would not comment” on their use of LPO are at least investigating it. If the Pangea3 deal confirmed the supply-side maturity, this fully confirms the demand-side market maturity.

You can download a freemium copy of full RAPIDInsight entitled over at our published research library.

Ed Brooks (pictured) is an HfS Contributing Analyst covering the field of LPO and leads his own expertise program The LPO Program.  He can be contacted via email here.

Posted in : Business Process Outsourcing (BPO), Outsourcing Heros, Sourcing Best Practises