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Legal process outsourcing, a term referring to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company. Today, through our article, we will be presenting a complete guide about legal process outsourcing, while also discussing how this market performed in the year 2022, and what we can expect from 2023.
To begin, we can establish that the legal field requires too many hours of work, and there are only so much time one can give to their job in a day. To run a successful law firm, lawyers and other legal professionals must perform a list of to-do tasks, but if all the work is performed by them, there are higher chances for the work quality to suffer. To assure that this quality is maintained and that customers are approached and served with utmost care and attention, law firms opt for outsourcing some services, this is known as legal process outsourcing.
Legal process outsourcing is a cost-saving measure. Under this process, discrete legal services are transferred to external companies, local lawyers or maybe paraprofessionals. These allow in leveraging the expert opinions on our important tasks to save time, cut costs and reduce the workload. Legal process outsourcing also enable firms in focusing on their most critical tasks and performing them the best. Running a law firm, just like any other business, involves plenty of tasks, making it overwhelming for employees to prioritize them, making it important for firms to opt for outsourced legal services, such as freelance lawyers or other lower-cost practitioners.
It is not just now, that law firms have realised the necessity of legal process outsourcing. If we look back at the legal industry trends from 2020, there was a clear evidence that law firms were making efforts to move beyond the traditional offering of services and support. With COVID-19 at our doorstep, firms realised that legal outsourcing would not just reduce their workload, but also keep them profitable, which was the necessity for them, and allow them to remain competitive in the market. Also, the market was then estimated to expand at a CAGR of 31.8% from 2019 to 2025.
If we consider the benefits of legal process outsourcing, then at its core, it increases profitability for a firm while increasing their working capacity. However, let us now consider a few other advantages it offers.
There might be a high possibility that our law firm will not have expertise in all fields. In such way, outsourcing of specific law services to contract lawyers can allow us in meeting all of our clients’ needs without having the need to hire a full-time employee.
We can employ freelance attorneys only when we need their help. Legal process outsourcing allows to do so, while providing us the benefit to hire the person whose skill match with our requirement the most. Moreover, hiring employees on freelance basis allows us in knowing the working relationship they have with the firm, hence making us learn if they can commit to full-time or not.
Right now, firms are under high pressure to perform their best. The method of legal process outsourcing brings in the extra help which is required, without providing us with the burden of hiring a full-time associate. It saves most of the lawyers’ time, which they can use up in maintaining their work-life balance.
Moving on, a legal firm can consider an endless list of potential activities when considering to outsource. But before doing so, we should preferably ask ourselves the following. The first, evaluating the firm’s needs. This would include asking ourselves about the tasks which take up a lot of staff time but need not be necessarily performed in-house, or if the person whom we are considering for our law firm needs to be present physically in the office? Do we require any individual to present us in the court? Secondly, after evaluating the areas for improvement within our law firm, we need to identify the companies which can avail us with the services required. Here comes the cost factor too, an efficient firm would be one who will consider outsourcing legal services where vendors can provide flat fees versus hourly rates.
Among the various types of areas where legal process outsourcing can help our firm to become more efficient, a few are mentioned below.
1. Court appearance for appearance counsel and per diems
A non-substantive court appearance may make us wait or ten minutes in front of the judge, or maybe an hour too. This situation has often led to dispute with clients, since for them just that ten minute of time is value added. Here, they often forget the hours that go by, in preparing the case files and performing other case related tasks. Additionally, this time spent can consume a sizable chunk of a flat fee. Instead, law firms can take advantage of the growing market of appearance (or per diems) available. They will appear at hearings in our place for a flat fee or reduced rate. These appearance counsel save our time which can be spent on completing more work.
2. Case and written work
There also exists specialised legal outsourcing companies which are replacing traditional staffing companies. These provide flexible staffing for specific areas, including experienced freelance lawyers. This implies, whether we require a lawyer to be present physically in the office premises, or work remotely, we can easily find such freelance lawyers via legal process outsourcing.
3. Document review
Legal process outsourcing can also provide access to a vast pool of contract lawyers to perform tasks such as document review. Instead of having our full-time workers spend their time on tasks such as scanning, coding or completing document review, we can have it all outsourced at only a fraction of what we’d pay to any full-time employee. Moreover, there are many companies which offer on-site lawyers to review documents physically, while other also provide off-site layers that manage such reviews digitally.
Moving towards the end, a report by the IMARC Group, one of the world’s leading market research companies, read, that the global legal process outsourcing market size had reached US$15.6 Billion in 2022. This was further expected to reach US$73.0 billion by 2028, exhibiting a growth rate of 27.7% during 2023-2028. This high increase in demand was a result of the escalating need for drafting documents, contracts, meeting minutes, letters, etc. Also, the rise in AI and other predictive tools is pushing firms to reduce their turnover time, as an expression of proving their worth over other competitive firms, thereby increasing the market growth rate. Amongst the big players of this industry, the report mentioned the names of Clairvolex, Clarivate, Ernst & Young Global Limited, Infosys Limited, Lex Outsourcing, Morae Global Corporation, UnitedLex Corporation.
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