Evalueserve, a global research and analytics firm, conducted a study on the state of the Legal Process Offshore outsourcing (LPO) industry, forecasting the industry’s revenue and growth potential in its white paper titled “Legal Process Outsourcing – Hype vs. Reality”.  They now have an update on the current landscape and the potential of the LPO industry, especially in light of the recent developments mentioned above.

The key findings of the present study are as follows:

  • The LPO industry is growing fast, and it is already the fastest growing sub-sector in the Knowledge Process Outsourcing (KPO) domain. Even during the Great Recession, the LPO sector grew by 40% each year. Revenue growth between 2010 and 2015 is expected to be approximately 26%. Currently, there are over 5,200 professionals in the LPO industry in India and the Philippines, contributing an annual revenue of USD 300 million, and this is expected to reach 18,000 professionals with an annual revenue of USD 960 million by December 2015.
  • Almost all of the offshore outsourcing work is being sent from the U.S. and the U.K. More than 90% of the LPO work is either being directly outsourced by Corporate Counsels or on behalf of Corporate Counsels (by their preferred law firms). So far, law firms have been hesitant to offshore outsourcing.
  • Due to the impact of the Great Recession, there will be pressure on law firms to reduce their overheads related to marketing and sales, general administration, Information Technology, accounting, clerical, paralegal, and knowledge management. These overhead expenses account for about 17% of the total overhead expenses (of approximately 41%) that a typical law firm with 20 or more lawyers incurs in the U.S. By moving most of this work, which is non billable, offshore, these firms can reduce this cost to approximately 7%. Currently, almost no law firm in the U.S. is considering this option.
  • The implementation of Clementi proposals in the UK is expected to boost the LPO industry because law firms are likely to be more efficient. In fact, many law firms have started implementing new models for pricing, designing, and managing better legal work processes; modifying and re-using existing work products and templates; partnering with other legal service providers to provide the entire array of services; and beginning to outsource functions (offshore) that include creating marketing and sales brochures, accounting, Information Technology, clerical, paralegal, knowledge management, secondary research, and legal and library information research.
  • Knowledge management (KM) will be a growth area for the LPO industry through which LPO firms can help their clients grow better and faster. In particular, LPO firms can help the in-house KM teams of law firms—especially those with dispersed offices—to consolidate and manage all the available resources into an electronic repository to save cost and increase efficiency.

The above is from the article, “LPO and the Great Recession,” and is used by permission.  Evalueserve provides knowledge services to a global client base of Fortune 5000 companies. Evalueserve’s expertise covers areas such as Financial and Investment Research, Business Research, Market Research, Intellectual Property, Data Analytics and Knowledge Technology Services.  The sole owner of copyright is Evalueserve and use of the protected material is by permission only.

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4 Comments

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    Finally, Finally…I’ve been looking for this information for a long time. Thanks

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    Based on the revenue projections, it looks like the average cost per hour is a little under $30. This likely covers a range of services from low end to intermediate. For the same rate, it’s possible to source American paralegals living in Israel and bar-admitted lawyers starting at around $50.

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    […] This post was mentioned on Twitter by IPwars (wrothnie), Genlyn Incorporated. Genlyn Incorporated said: LPO & the great recession http://www.patentbaristas.com/archives/2010/06/03/legal-process-offshore-outsourcing-lpo-and-the-great-recession/ […]

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    It has been seen that outsourcing in any sector (IT, law etc.) starts with lower-end work. But, this trend is currently changing and more clients are seeking high-end specialised services too in all sectors of the BPO industry. LPOs are a part of the whole BPO industry. Like other sectors in the BPO industry, the legal outsourcing sector shall continue to grow, going by the current shift in the demands of the market. The legal outsourcing industry is still new and has not fully developed. We have very few offshore legal service providers that provide specialised high end legal services. Once this trend of specialised high-end legal outsourcing gains more pace, greater amount and variety of legal work will be outsourced.
    Abhinav
    http://www.sddglobal.com
    High end legal outsourcing