By Dan Berthiaume
The US legal industry is being reshaped by four outsourcing-related trends: globalization, alternative legal providers, and legal process outsourcing. As detailed in a new infographic created by call center solutions provider TelAssistant (and reproduced in the Wall Street Journal), these trends are benefiting both law firms and their clients.
A brief review of the four outsourcing-related legal trends identified by TelAssistant will be instructive:
Globalization – Domestic law firms are increasingly expanding across borders, collaborating with foreign counsel and merging firms based in other countries. This trend has been around for some time, but TelAssistant identifies factors such as the growth of the Internet, increased automation of legal processes, improved data security and the availability of advanced technology tools as accelerating it. Law firms will continue to move toward global operations as all these factors keep developing.
Alternative Legal Service Providers – In addition to growing reliance on non-lawyer legal professionals such as paralegals, legal document preparers and self-help legal sites, TelAssistant also cites the increased reliance on virtual legal assistant tools and offshore legal service vendors as changing the nature of the US legal industry.
Virtual Law Firms – Enabled by mobile technologies, SaaS and secure Web links, an increasing number of US lawyers are engaging in a form of “insourcing” by remotely offering their services from home or virtual offices. Benefits include lower operating costs and flexible work hours.
Legal Process Outsourcing – An emerging business model known as legal process outsourcing (LPO) directly shifts the work of domestic attorneys and associated professionals to onshore and offshore third-party vendors. Much like BPO and related outsourcing models practiced in other industries, LPO can help law firms minimize cost and increase flexibility while expanding their capabilities and possibly gaining access to expertise and knowledge not available in-house.
These trends are producing significant benefits for US legal services customers and providers. According to TelAssistant, these include:
Cost Savings – Potentially significant differential between in-house and outsourced wages can produce major labor arbitrage savings which a law firm can then pass on to clients, increasing its competitive standing with rival firms.
Access to External Talent – As mentioned above, outsourcing can allow law firms to gain access to high-level talent and specific areas of expertise which may not be available in-house. This can make outsourcing especially valuable to smaller firms or firms that focus on a narrow practice area.
Reduced Turnaround Time – External personnel expand internal bandwidth and can shorten the amount of time needed to complete projects. In addition, by strategically using offshore personnel in different areas of the world, law firms can use a “follow the sun” strategy where projects are completed on a 24/7 basis by lawyers working during normal business hours in various time zones.
Flexibility – Outsourcing allows law firms to easily adjust workflow capabilities according to fluctuating client demand. Smaller firms may especially benefit from increased flexibility.
TelAssistant predicts that as a result of continued growth in legal outsourcing, more lawyers will establish small boutique firms that focus on one specific area of the law. These firms will be able to compensate for potential disadvantages relating to their size and scope through the use of global outsourcing and automation.
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