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What is the Scope of Legal Process Outsourcing in India?

Narendra Kumar

| Updated: Aug 07, 2019 | Category: Legal

Legal Process Outsourcing in India

Legal outsourcing is also referred to as Legal Process Outsourcing (LPO). It refers to the practice of a law firm or corporations for attaining legal support and their services from a law firm or legal support services company (LPO provider) based outside. When the LPO provider is based out at another country then it is called offshoring. It involves the practice of outsourcing any activity except those where personal presence or contact is required. It may be appearances in court and face-to-face negotiations. When the LPO provider is functioning in the same country, the major part of the job is to look into agency work and other services which requires a physical presence, like that of a court. The most commonly offered services are agency work, document review, legal research and writing, drafting of pleadings and briefs and patent services.

This process initially started in the 1950s[1] and was only limited to Patents. After that, firms began to contract certain services to back door firms. Through this process of legal process outsourcing, law professionals can help their clients by getting their work done at a lower coast and ultimately attaining profits. The process reduces the risk by standardizing the legal work in a project-oriented manner. The process of LPO work is commonly found in India and is a fast-growing industry.

How to get started in a Legal Process Outsourcing in India?

The legal process outsourcing in India concept is based on the division of labor principle, prevalent in law firms. It has various time consuming and onerous processes like due diligence which are delegated to paralegals, document reviewers or interns. This allows the firm to address the legal issues, which arise on a daily basis while being able to streamline productivity.

The following are some methods by which the process can be initiated:

  • Direct Contract – The firm requires legal services which can directly approach the legal process outsourcing vendor.
  • Managed Outsourcing – The firm establishes contact with a legal process outsourcing vendor. It retains a traditional law firm to coordinate the vendor’s activities and to ensure quality control.
  • Required Outsourcing – Required outsourcing occurs when the firm mandates a certain level of outsourcing in the legal process. It is either to reduce costs or to fulfill statutory requirements.
  • Multi-Sourcing – The multi-sourcing involves segregating the work assigned to LPO providers in order to reduce risk. It takes advantage of each provider’s strengths. This method aids in cases where an immense amount of expertise is required on matters of jurisdiction. If there is more than one provider in the market, the service recipient thus has the privilege to get a better price for the same work. Other than this, multi-sourcing can sometimes be more complex than outsourcing.

What are the reasons for establishing LPO?

Legal outsourcing is growing popular as law firms and corporate legal departments.

Some of the major reasons for expansion are:-

Legal Process Outsourcing

What is the concept of Legal Process Outsourcing in India?

In foreign countries like the United Kingdom, United States of America, Singapore, Dubai, Lawyers charge a lot of money on an hourly basis just to get their work done. In order to reduce the working costs, many corporates send out their legal work over to India. Here, the cost of labor is law and the work can be done in the fraction of the cost. The Indian companies in who receives this kind of work allot them to law graduates hired by them. These law graduates complete the required work and sends the finished documentation to the client abroad. The medium to exchange work communicate with clients is via an online platform. Upon satisfaction of the work completed, LPOs get paid by the foreign client.

Also, Read: Law of Agency: Principal and Agent Relationship

What are the qualification and skills required to work in an LPO?

LPOs require law graduates having a specific skill set:-

Legal Process Outsourcing

What are the kinds of work accomplished in LPOs?

The work LPOs is done online with the help of specialized software. As a rule, Legal Process Outsourcing in India units does not work either on Indian laws or for Indian clients. Bar Council of India does not allow them from doing so. The lawyers have to work on matters relating to foreign laws. They majorly involve drafting various documents. It is solely based on templates, document reviews, proofreading documents, Company checks, various legal research and compliance related to various laws.

What are the benefits of working with an LPO?

  • Corporate Culture – The LPOs have to follow the corporate format. Uniformity is a major advantage in the workspace. My incentives are provided to the employees like that of regular promotions, increments on a yearly basis or as discussed in the contract, well-equipped office spaces, creating an environment which is safe for women and free from harassment and inequality. Employees are also provided with other Government-authorized benefits like maternity, Provident fund, etc. This gives their employee a work-life balance than being with a lawyer and working 365 days a year around the clock. Also with this kind of niche law firms, security is not provided in terms of salary and harassment both mentally and physically. Ultimately they are left with no choice than leaving the firm. Comparatively, LPO has its own plus points for women and a safer place to be in.
  • Working hours are generally fixed – Usually, the work hours are fixed for like 8 to 10 hours every day depending on the Company. The standard in India is 9:00 am to 7:00 pm, but it may vary depending on the client’s location. Generally, India caters clients from the United Kingdom or the United States of America.
  • Monetary benefits – The incentives or the requisites received by the employee varies from place to place and Company to Company. The Tier 1 LPOs pays around Rs. 30,000-45,000 to freshers. While the Tier 2 LPOs pays around Rs. 20,000 to 25,000 to freshers for the same nature of work. The Companies also provides with performance bonus and incentives periodically. Their salaries are reviewed every year at the end of their financial years.
  • Learning Opportunities – The learning opportunity broadens as the Company is involved with various multi-national clients. The LPOs sometimes hires trainers from outside India so that they train their employees. This exposure their employees on the various work culture adapted at their client’s location. The knowledge is exchanged and we might also get to know the best software available in the industry which is easily accessible.
  • Work from home opportunity – Majorly, the work is done on portable devices like laptops, so with work from home provision, it gives more flexibility to their employees. The employees can use this opportunity when there is any need. Thus a work-life balance is maintained for the lawyers.
  • Cost Savings – One of the major advantages of outsourcing their legal functions is to save costs. Organizations can decrease their cost structures through labor arbitrage, which is a means where the wage differential between in-house legal personnel and outside vendors is carried out to get tremendous cost benefits. For example, an in-house attorney can cost the firm around Rs 5,000 an hour while a vendor attorney might cost Rs 1000 an hour for the same nature of work. By this process, offshoring overseas can get greater cost benefits.
  • Access to External Talent – When the external vendors get their work outsourced, it allows organizations to access high-level of talent and niche expertise may not be available in the firm. For example, there are firms which devoid litigation practices, thus the litigation firms which lacks litigation support expertise can outsource[2] those aspects of litigation support like filing an appeal or reviewing a document to niche providers. Legal offshoring allows domestic firms to enter into global expertise.
  • Deduction in Turnaround time – The external manpower increases the internal bandwidth in the LPO to minimize turnaround time for all the legal projects. With the help of onshore and offshore teams, the LPOs completes the project in less time period.

Also, Read: How to Register Law Firm in India

Drawback of LPOs in India

With LPOs growing in India, they have started having a negative impact on the legal field. Some of the issues are as follows:

  • LPO is similar to that of a BPO, so this field is looked down. The Lawyers don’t like the tag of ‘LPO’.
  • It is not a favorable career choice as lawyers to pursue in the first place. The working pattern changes enormously as they do not get work on Indian laws. Working on foreign laws for a long period of times makes them lose their grip on the Indian laws.
  • The workload can be tedious in this industry. People sometimes call it grunt work.
  • There are chances of misuse of information. The Foreign clients make reservations for the confidentiality of documents which are being shared with the LPOs based in India. For example, if the LPO is processing documents which is related to the acquisition of one company by the other, these kinds of sensitive information have still not been announced in public, the LPO’s employee can misuse this piece of information and be a part of insider trading.

Conclusion

LPOs industry in India is still at its budding stage. Nevertheless, there is a huge scope of expansion and growth in the industry. Many job opportunities may arise in the future years to come and end the global financial crisis.

Annual growth of 200% is being predicted by the LPO firms in India majorly due to recession-related litigation. In some areas of practice, like that of a real estate, it has had drastically collapsed majorly because of recession. In some areas such as litigation, document review, and corporate compliance have gained various heights which resulted in business directing to LPO firms in India.

Outsourcing has been technically defined as using resources from outside the internal operations of a business which aims to keep things running smoothly. Particularly, small firms with limited working capital find it difficult to manage cases and getting g their focus drained in handling them. Outsourcing provides the flexibility and cost savings benefit. They can utilize the savings to hire resources to work on their core expertise. To know more about Legal Process Outsourcing in India, Contact Enterslice.

Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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