Outsourcing is the process of contracting non-core aspects of a business to third party organization, which can be domestic or off-shore. Traditionally, outsourcing was associated with the information technology industry or business processing functions such as payroll or billing.
This trend is now firmly part of the legal industry. Legal outsourcing (also referred to as legal process outsourcing or LPO) is when a lawyer, law firm, or a legal department outsources certain functions to an outside firm. Generally, any function that does not involve appearance before a court or client discussions can be outsourced. Due to high overhead costs and clients’ demands for quality legal services at lower fees, legal outsourcing is becoming an increasingly attractive option for solo practitioners, lawyers, law firms, and in-house counsels who outsource repeatable, high-volume transactional projects.
Though lawyers have expressed hesitancy about legal outsourcing assignments to third parties due to quality control and client confidentiality, these concerns can be addressed effectively between the lawyers and outsourcing companies resulting in a win-win, long-term partnership.
Legal outsourcing’s main advantage to lawyers and law firms is the greater efficiency realized in terms of time and cost due to lower labor costs and overhead expenses of the third-party firms.