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Challenges faced by LPO industry

May 26, 2009

Legal Process Outsourcing (often abbreviated as LPO), is a section of the outsourcing industry that is gaining popularity quite fast.
In Legal Process Outsourcing, the legal documentations required by an outsourcer, such as preparation of deeds, business agreements, business transaction details, etc., are handled by an independent outsourcing service provider located in a different country. This type of outsourcing is mostly put to use by US and European companies, in order to cut down on the attorney costs.

As much as the industry may seem to be highly profitable, it is not without its drawbacks. It can never be ignored that the LPO industry is still in its early years, and the possible complications that can occur, keeps prospective clients away from this otherwise profitable practice. Besides, many outsourcers are in two minds about how much cost the practice could actually cut down in reality, and are still hesitant about adopting the practice.

There are other complications faced by the industry as well, such as:

1. Conflicts of client’s interest(s) – This can occur when the law firm providing outsourcing service to a client takes up a project, either intentionally or unintentionally, which is opposed to the interest of the client. There are certain ethics that law firms have to be careful never to breach. For instance, a law firm representing one client in a case must make sure that another branch of the same firm is not representing the opposing party. A law firm carrying out such practices, even inadvertently, will suffer a major blow to its reputation, and will probably also face a lawsuit from the jilted client.

2. Confidentiality issues – When one organization is shipping its legal work off to a law firm located in a faraway country, it is risking a breach of confidentiality. The law firm handling the operations must have strict guidelines in place and provide proper training to employees to ensure that they understand the requirements of the client. The firm must also have a stringent background screening procedure in place, to ensure that only honest and dependable employees are hired.

3. Using properly tested legal software – When the legal work is being carried out by using special software packages, the software needs to be checked properly for quality issues. There should be a searchable database that is constantly updated with categorized details about the client operations handled by the law firm, including the billing information. LPO services can be quite expensive compared to other fields of outsourcing. Clients do not take it kindly if they find out that they have been overcharged.

In spite of these drawbacks, the LPO industry is gaining popularity in Asian and South American countries and many organizations in the US and Europe are willing to give this new industry a try, in order to keep their all time agenda of cutting costs and multiplying profits moving on the right track.

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Written by kavita · Filed Under LPO Blogs 

Comments

3 Responses to “Challenges faced by LPO industry”

  1. Babu on May 28th, 2009 7:01 pm

    Hi,
    I’d like to to know more about LPO and how is market for the LPO services from in US and UK? Is there a scope for a LPO startup from India?

  2. user on June 4th, 2009 11:59 am

    There are good opportunities for LPO vendors in the near future. Tasks like contract review, general contract drafting, Legal research have good scope.

  3. The long and winding road before Indian LPOs | Outsource Portfolio on June 22nd, 2009 7:38 am

    [...] clients. Due to the sensitive nature of work that a lawyer handles, this in fact is a more serious challenge in the LPO space than with other [...]

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