Legal Guide

How Are Legal Outsourcing Services Innovating Legal Work Culture?

With limitless opportunities arising from the digital technologies around us, there is no denying that innovation is the most prominent talent priority when it comes to legal services. Moreover, taking the legal sector’s struggle with employee engagement and retention, developing a culture of innovation can be an optimum solution to address previous challenges.

However, many law firms and legal departments usually find it challenging to plan and foster a culture of innovation due to lack of knowledge, budget constraints, or not going beyond legacy systems and processes. In such situations, legal outsourcing services can play a crucial role in helping law businesses and legal teams drive innovation. Let’s read further and find out how but before that, let’s discuss;

The Role of COVID-19 in Speeding up Innovation

The pandemic has further increased the need and implementation of innovative technologies in the legal industry. For example, lawyers observing safety measures due to the current scenario are providing legal services through video conferencing software like Zoom or Google Meet. In fact, clients are also saying that they are exercising more convenience after the arrival of such innovative tools. These positive experiences have begun a new phase of client-focused legal services convenient for both clients and the lawyers and their office staff.

And day by day, this phase is becoming the new normal for the legal industry. In fact, the implementation of such innovative methods has also led less office space requirements. However, this phase also demands the ability to be agile during an unexpected change and the adoption of new technologies.

Rise of LPOs as an Innovative Solution to Current Circumstances

The COVID-19 pandemic led to a decrease in the availability of human capital. Hence, firms' processes required alternative legal solutions. In the legal sector, these solutions were furnished by legal support services, commonly known as LPO services, that handled certain operations and delivered a high-quality outcome at a low cost. As a result, more law firms began handing over certain jobs to LPOs that were expensive and tedious for an in-house team.

How LPOs Help in Fostering Innovation for your Law Firm?

The research and development (R&D) outsourcing market is expecting a compound annual growth rate (CAGR) of around 8% by 2023. This is much more than healthy progress and for a better reason. When we consider:

  • The rapid technological development
  • Increasing complications of product and solutions
  • Need for expertise in diverse fields. 

There is no surprise that the number of organizations searching for outsourcing innovation management as their desired method of developing new products is increasing. However, to leverage innovation outsourcing for your business, you need to do things correctly. Innovation outsourcing is an organization strategy in which a firm handover the duty of idea generation for new products, development of strategies to introduce them in the market, or both to an external service provider.

Therefore, in this sense, innovation outsourcing surpasses the limits of contracting out one-off projects or operations. The thing which is being delegated is management, innovation, know-how, strategic research, and intellectual capital. Hence, the stakes are much higher.

Innovation outsourcing may higher the risk, but its rewards are satisfying enough. An MIT Sloan Management Review study states that strategic outsourcing can aid companies in lowering their innovation expenses by 60 to 90%, reduce the product cycle times and give ROIs that are way more than the initial investment.

The European legal process outsourcing market also looks promising, with an expansion rate of more than 16% CAGR by 2027. This is due to a steep rise in the number of SMEs backed by supportive government initiatives in numerous countries like the UK, Germany, and France. SMEs consist of about 99% of EU non-financial companies generating 56%of the added value and responsible for 66% of jobs.

Hence, it is clear that the market will witness a sharp increase in demand for legal outsourcing services to assist SMEs in complying with the strict regulatory settings of Europe. As a result, SMEs will hand over their legal work to dodge unnecessary litigations and fines.

However, it is likely that firms will prefer onshore outsourcing over offshore outsourcing because of the language barriers and risks related to cross-border data transfer.

Benefits of Outsourcing (LPO) Innovation include:

  1. Access to trained professionals

It assists in bringing in the expertise of the professionals. For example, suppose there is an instance where you face an unfamiliar issue; in that case, delegating things to a paralegal service provider having expertise in that area of law can assure you with quality results. In addition, it saves a lot of time, lessens the pressure on in-house professionals, and fills the absence of internal competency.

  1. Round the clock services

Countries like India that provide services to different time zones let law firms leverage benefits round the clock. For instance, the 12-hour time difference between the US and India allows 24*7 operations, minimizing delivery time.

  1. Exposure and learning opportunities for Lawyers

LPOs provide an interactive platform for lawyers to gain exposure. Numerous LPOs work for popular UK and US law firms. Therefore, they uniformly take the assistance of industry experts to train their employees. This practice makes sure that employees become well-versed with the work culture of foreign countries and have enough exposure to robust software used in the industry.

  1. Control of the project

When operations are handed over to outside professionals, one can easily maintain the project's control and set the project's scope. In addition, you can set time frames for its completion. Finally, the most important thing is that it lets you decide your budget as per your requirements.

  1. Better focus on core business operations

Handing processes that include the non-core legal operations to an external legal service provider can quickly decrease the delivery time and save internal resources for the core law firm functions.

  1. Ongoing Innovation and transformation of business

Legal Process Outsourcing in countries like India and Indonesia makes it easy for your law firm to keep up with the latest technological advancements and ongoing trends. This ensures that your law firm has an added advantage in the legal sector.

The Bottom Line

The legal industries of all countries are looking towards LPOs as an innovative way to increase efficiency and stay profitable in the current highly competitive market conditions. Moreover, Legal Process Outsourcing is becoming an engaging way of reducing costs by delegating back-end legal operations. Therefore, the ecosystem of LPOs is continuously growing and, thanks to the 2020 big shake-up, it is also getting more diversified and innovative.

But despite all the buzz, the majority of things will remain the same as the pillars and practice of law will remain unchanged; productivity and profitability and the factors that enhance them will always stay in focus. Therefore, the more things change, the more they remain the same.


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