LPO Gains Momentum

Happy New Year! 2010 brought many changes to the LPO industry including new deals, new markets and onshore expansion. Undoubtedly, 2011 will bring more changes as LPO continues to gain momentum across the globe. In fact, the growth of LPO has garnered much attention in the media lately.

A recent article in the Chicago Tribune analyzes how the recession has spurred the growth of legal process outsourcing and alternatives to traditional legal services. Thomson Reuters’ acquisition of LPO giant Pangea3 and Axiom Global’s purchase of LawyerLink are recent testaments to “how alternatives to the traditional law firm are becoming increasingly attractive to buyers of sophisticated legal services in the post-financial-meltdown era.”

While alternatives to law firms are nothing new, business models that embrace legal process outsourcing have gained momentum in the wake of the recession by introducing innovative ways to reduce the costs of many legal tasks.

A story in The Economist also acknowledges the growth of legal outsourcing, noting that LPO is expanding at perhaps 20-30% a year, “for the simple reason that legal costs are out of control.” Given that large law firms’ hourly rates rose more than 65% between 1998 and 2009, it’s no wonder that firms are embracing outsourcing as a means to lower costs and increase efficiency.

Outsourcing will affect American legal firms the most, because U.S. law firms cost the most, according to The Economist, and the time-intensive process of discovery further drives up legal fees.

What do the lawyers think of the growth of LPO? “Some lawyers think outsourcing will be a blessing, taking away the drudgery and leaving them free to hone their higher skills,” the article reports. “Others are nervous. Machines will never replace the brightest American legal minds, but there is no reason why Indians cannot do some of their work. The sharpest firms will survive. So will mass-market law firms, which will make use of outsourcing. But the profession as a whole could be in for a squeeze.”

Only time will tell if legal process outsourcing will be a blessing or a challenge for U.S. lawyers. But, regardless of the lawyers’ plight, in 2011 we will continue to see unprecedented growth in the industry.

ABA 2009 Annual Meeting: Chicago

Mark your calendars. The American Bar Association (ABA) is holding its annual meeting in our very own Chicago this July 30th through August 4th. As usual, there will be a solid line-up of speakers, CLE courses, and vendor exhibitions along with plenty of “networking” events to go around.

To our out of town guests, please keep me apprised of your travel plans, as I would love host any of you during your stay in our lovely city.

For more information check out the ABA site (www.abanet.org/annual/2009) or contact ABA directly at abanet@xpressreg.net.

Total Practice Management Conference Update

This Thursday and Friday I attended the inaugural Total Practice: Get a Life conference in Chicago as blogged about previously. I was very impressed with the conference speakers and content of the presenters.

In addition to wide range of pertinent topics across the legal industry, the conference included a panel segment on legal outsourcing domestically and abroad. While the outsourcing discussion remained at a fairly high level, the attendees were very attentive and interested in the opportunities available.

Put this one down for your calendar next year.