Legal Services Outsourcing Transforms Into ‘Best Practice’ For Law Firms
August 16, 2011
One of the mainstay outsourcing products that is changing the legal marketplace is LSO, legal services outsourcing.
One thing that has changed the legal industry is the aftermath of the recession of 2008. This was a time when attorneys began to analyze why they were taking on clients. It was a turnaround for corporate counsel. Among the changes? Companies no longer need to hire full fledged law firms like they did in the past. In its place, there were more flexible fee structures, price bids for work done along with an intact LSO specialization system. The concept of obtaining third-party providers has changed the legal industry.
In essence, LSO brings in a practice of creating collaborations with legal service providers who can work together with attorneys directly or in a environment that links both the customer and an external counsel.
Legal Services Outsourcing is an evolving phenomenon and has been influenced by both market demand and its inherent nature to change. A research study by Financial Times Innovative Lawyers Awards pointed out that 72% of law firms, and 43% of corporations polled were either involved in outsourcing or were open to outsourcing in the future.
Some of the work that was outsourced included litigation document review – 33%. A survey done by European Lawyer revealed that 61% of those polled relied on LSO for undertaking work related to mergers and acquisitions. Moreover, some of the main segments for the LSO market are telecommunications; technology;pharmaceuticals; healthcare; and financial services. It is especially true of the financial industry because banks are slashing costs due to huge volumes of litigation-related work.
With major law firms obtaining significant cost savings from LSO, there has been a shift in perception of legal outsourcing. The example that only 3% of companies and 11% of law firms abstain from outsourcing their legal services because of a lack in quality. This testifies that corporations have gained from substantial savings in costs. As a result, LSO has transformed into a best practice for lawyers and law firms, reports Forbes.