Does Legal Process Outsourcing Work ?..You Bet It Does!

Legal Process Outsourcing or LPO is one of those services which are more difficult to evaluate in its performance than other more conventional BPO services.

Unlike those more conventional services which often times have easy to validate Key Performance Indicators (completed processes, error rates, accuracy rates and so on) LPO is a bit more tricky to asses.

Depending upon which tasks is being outsourced the validation of Key Performance Indicators is usually not an obvious solution. After all, discovery documents being improperly prepared or reviewed will often times only show up months later as a potential problem.

As such LPO has been existing in a bit of a firms use it more and more but no one really knows much about whether it really works.

The fact that law firms are usually privately owned makes it even more difficult to asses if LPO is one of the methods employed to successfully reduce their expense ratio. Transparency is just not a high priority when it comes to dealing with attorneys.

An interesting insight into the validity of LPO was provided through a survey conducted by Corbin Partners and Taran Virtual Associates. In the survey about 250 Canadian law firms and attorneys were asked if they were using LPO and if so, what their  satisfaction rating was with the services provided.

The survey provides a rather interesting viewpoint of the Canadian legal industry. It established that
40 % of respondents said they use LPO currently.

Out of the 40 % who use the service the breakdown of services utilized was (multiple selections were possible):

  • 51 % use the service for legal consultations  and opinions
  • 37 % use it for agency services
  • 37 % use it for trial and appellate work
  • 36 % use the service for legal research
  • 28 % use it for clerk and paralegal support
  • 24 % use it for document review and discovery
The most important takeaway from the survey though was the level of overall satisfaction. Of those who were currently using LPO:

45 % reported that they were very satisfied with the service
41 % reported that they were somewhat satisfied
9 % reported they were neither satisfied or dissatisfied 
5 % reported that they were somewhat (3%)  or very dissatisfied (2%) with the service

Only 5 % of the respondents reported dissatisfaction with the service. This makes it clear that LPO is here to stay.

Considering that 60 % of the respondents in the survey did currently not use the service it seems that the industry as a whole has some room to grow.

If you consider that the providers of LPO services will continue to perfect their processes it seems plausible that they will also work themselves deeper into the law firms over time.

A provider might start out with just discovery as the outsourced process but there should be a good chance that over time more and more functions will be turned over to the LPO provider.

Judging by the results of the survey LPO is here to stay and business should be good for the industry in the years to come.

How You Can Make Sure That Your Arbitration Clause Is Air Tight When Dealing With An Overseas Outsourcing Partner

No one wants to go to court. This is even more true when your potential adversary is residing in a jurisdiction where the ability to enforce US laws is limited at best. (Mexico, China and India will for the most part not enforce US judgments)

It therefor has become the norm within the outsourcing world that  most contracts are using arbitration clauses to safeguard the legal interest of the parties.

Commercial Arbitration Firms like JAMS offer an alternative dispute resolution process which is faster and also cheaper than what is available through the courts. An added benefit might be that because of the nature of arbitration (private resolution) there is a significantly greater degree of confidentiality.

The big advantage arbitration does have is that  countries like China, Mexico and India have  signed the New York Convention for the Enforcement of Foreign Arbitral Awards, thus enabling the collection of judgements even in those countries which would not enforce a judgement obtained at a US court. 

Another significant advantage utilizing the arbitration route is less cost and less time consuming, both of which constitute a  significant advantages as compared to litigate in front of a US court.

There are of course pitfalls to consider when executing an arbitration clause. The wording of the clause has to be as such that it will withstand legal scrutiny in case a party wants to evade their arbitration responsibility.

At the very least the following key points should be incorporated into the arbitration clause:

  • A provision stating that "all disputes arising under or in connection with the agreement shall be resolved" by the rules of a particular international arbitration organization
  • A clear location of arbitration
  • The number of arbitrators involved (typically one or three)
  • The language in which the arbitration process will occur
  • An agreement that any awards issued by the arbitrators "may be enforced in any court of competent jurisdiction"
Obviously a competent attorney should review any contract to make sure that the legal language used is up to par.  

Looking out for the proper arbitration language will go a long way that in a situation where an outsourcing relationship has gone sour. No one ever wants to go to court and in a situation where some kind of dispute resolution is considered arbitration is a much better bet.