Legal process outsourcing (LPO) is when law firms send work traditionally done by in-house attorneys, paralegals, and support staff to outside sources. These external sources are located domestically or internationally. The benefits of LPO include:
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Cost savings – as legal firms struggle to trim their budgets and cut costs, sending legal work elsewhere saves money through labor arbitrage, which is the difference in pay between in-house employees and outside sources; overseas workers are especially less expensive than onsite employees
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Talent – using workers other than current employees allows law firms to take advantage of outside talent without the process of training and retaining a regular employee; in addition, firms can find niche workers for certain projects or take advantage of the large pool of qualified, motivated overseas workers with specialized expertise such as language skills or firsthand knowledge of foreign law
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Time – using outside sources saves turnaround time by increasing internal bandwidth size and by taking advantages of different time zones, which allows teams to work at any hour of the day
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Flexibility – workflow can vary based upon the amount of current projects and also the demands of clients; by using outside sources, law firms are able to tailor their workloads and hire extra help only when needed; they can also avoid hiring workers for specific jobs that are not needed fulltime, thus saving on salary and benefit costs
Smaller firms especially can benefit from legal process outsourcing. It can be easier for them to compete with larger firms by offering the same work coverage with outsourcing, even with fewer in-house employees.