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LPO (Legal Process Outsourcing) refers to the practice of corporations or law firms obtaining legal support services from an outside law firm or legal support solutions company, operating in a low cost location such as India or the Philippines. As opposed to other areas of outsourcing, Australian industry and organisations have been slow to accept the outsourcing of legal processes.

Maurie Dobbin, Director and co founder of outsourcer Legal Resources, admits that the going was tough, “When we first setup business the level of acceptance in Australia was very low, we received most of our initial enquiries from the United States. It’s only now that the industry is receiving the recognition that it deserves.”

As well as issues concerning security and confidentiality, people questioned the ethical and professional standards of lawyers in the different outsourced locations. Even though India has exactly the same legal foundations as Australia, “We experienced a lot of prejudice in terms of the perceived professionalism of lawyers in India. People questioned the ability of Indian lawyers to evaluate documents in line with Australian regulatory requirements”, Dobbin adds.

LPO providers offer services in the areas of document review, legal research and writing, drafting of pleadings and briefs, and patent services outsourcing.

According to research conducted by Evalueserve, there were over 5,200 professionals in the LPO industry, as on April 2010, in India and the Philippines, contributing an annual revenue of USD 300 million, and this is expected to reach 18,000 professionals with an annual revenue of USD 960 million by December 2015. The recent recession made businesses very conscious about cost and finding ways to reduce operating expenses. Organisations also have greater faith and sense of security in LPO. “These days with the way electronic document review is managed you can have all the security you need. There is no down side or risk that can’t be managed.”

As with other forms of outsourcing, a key benefit that can be delivered to an organisation by LPO is cost. Dobbin highlights that a lot of mundane legal work, such as reviewing documents, is passed onto paralegals to perform. He says, “ Australian organisations can pay up to $150 – $200 an hour for a paralegal. By outsourcing this work, and depending on the size of the project, you will be paying half the amount for the services of a fully qualified lawyer.”

The type of organisation, according to Dobbin, that has most to gain from an LPO arrangement is a large trading enterprise that needs to manage a lot of contracts or legal forms. Most of the work is mundane reviewing, which can easily and securely managed offshore. Legal extraction is another area that is gaining in popularity. For example most property leases are very similar, its just the specific clauses that are different, these can easily be extracted and highlighted for negotiation purposes.

Legal Process Outsourcing is certainly here to stay and as Aussie companies become more familiar with its benefits and less concerned about the perceived risks, we should see greater adoption in the market.