While Legal Process Outsourcing (LPO) units arrive as an apparent blessing in the East, the West faces the ugly flip side of the coin.
Outsourcing: It’s Not Just About the Money
- LPOs are providing services at a fraction of the usual costs and are gaining attention from private equities. They are sure to blossom for a while.
- In response, the smarter law firms are finding new ways to stay in the market without getting into futile price battles with LPOs.
- Some are positioning themselves as the primary legal advisors – liaisons to the client, who direct the allocation and assignment of legal work – thus blocking direct connection between LPOs and clients.
- Others are in search of innovation – ways to carry out legal work more effectively and efficiently. They view this as more valuable than providing services at low cost.
- This leaves junior associates in a tough spot – they don’t have enough experience to serve as ‘valued councils’ for billion dollar clients, and are too expensive to provide raw manpower.
- Smart firms are directing the grunt work to LPOs while serving at the echelon of the legal machinery, rendering junior associates obsolete.
Source: Above the law
While cunning legal minds at the top of the pyramid are quick to adapt, the ones at the bottom, as usual, get the sour end of the deal. Look up the concept of ‘creative destruction’ (talk about an oxymoron).