The most popular Legal Process Outsourcing (LPO) destinations include China, Israel, Philippines, Sri Lanka and, of course, India. For a decade, India has reigned as the world’s premier outsourcing destination because of its favorable time zone, the better quality of experts from the country, foreign educated professionals, language and the similarity to English common law systems. Despite India’s supreme reign, LPO is moving beyond India’s borders into new countries and with new strategies.
As the LPO industry matures and expands, corporate legal departments and law firms alike are becoming more open-minded about the types of legal processes to outsource and where their LPO providers are located. The trend today is to think about outsourcing in its broadest terms as “to outsource any legal work — including from one law firm to another law firm — in any geographical location, for example from the UK to Kenya, India to Uganda and so on.”
This new mindset is leading to a surge in new destinations and operating models for LPO work. Examples of new LPO locations include the UK, Chile, Ghana, Jamaica, Poland, Romania, Russia, South Africa, the Philippines, and Vietnam. These regions share several important attributes: they offer a rich pool of multi-skilled talent with a high work ethic. They also have cost advantages, sound IT and telecom infrastructure, good connectivity, ease of travel, government support, business-friendly policies and cultural compatibility.
Relocating Legal Process Outsourcing
The concept of “near-shoring” is also gaining global acceptance. The term describes any outsourcing location “near” its primary market (for instance, Eastern European countries to Western European Countries), or as services delivered from an adjacent or nearby country. The near-shore outsourcing model offers a number of benefits equal to the offshore outsourcing approach. The primary benefits include:
* Proximity and Time Zone
* Cultural Affinity and Ease of Doing Business
* Cost Savings
Although near-shore rates can be higher, near-shore engagements offer greater efficiency gains that working in close proximity and in the same time zones can bring. Therefore, near-shoring can be more efficient in achieving higher percentages of work performed at a lower cost location than offshore. Thinking past simple labor arbitrage, companies that engage in long-term engagements, measured by strategic service level agreements, can better leverage the advantages of the near-shore model.
The near-shoring trend illustrates the value of LPO beyond simple cost-savings. With the huge global potential that near-shoring presents, LPO will be more widely adopted as a flexible, effective strategy for delivering legal services to a global business community.