You have1 free article left this month.
Register for a free account to access unlimited free content.
You have 1 free article left this month.
Register for a free account to access unlimited free content.

Lawyers Weekly - legal news for Australian lawyers

Powered by MOMENTUM MEDIA
lawyers weekly logo

Powered by MOMENTUM MEDIA

Goodbye job applications, hello dream career
Seize control of your career and design the future you deserve with LW career

LPO on the up

Local firms are more receptive to legal process outsourcing (LPO) due to the globalisation of the Australian legal market, according to LPO service provider LegalResources, which relaunched in July.

user iconLeanne Mezrani 27 July 2012 SME Law
LPO on the up
expand image

Chief operating officer Clare Matthews (pictured) told Lawyers Weekly that LegalResources re-entered the Australian market this month in response to growing demand for LPO services. The company was established in 2007 but Matthews believes “Australia just wasn’t ready at that stage”.

She claimed that local firms are now more receptive to LPO, and many lawyers no longer feel threatened by LPO service providers.

“Lawyers used to fear LPO would compete for their clients, but now they see the benefits and how it can help them service their clients,” she said.

The infiltration of global law firms into the Australian market has driven this “cultural shift”, according to Matthews.

She explained that UK and US firms, many of which have been using LPO since their budgets were scrutinised during and after the GFC, view LPO as “the norm” and are passing on their sensibilities to Australian partners.

“There is a push by some of the big globals that come here to cut costs ... these firms are starting more LPO conversations in Australia.”

Budgetary pressures have also influenced general counsels’ views on LPO, Matthews continued. She said in-house legal departments that are continually required to reduce their external legal spend are attracted to LPO for its cost savings, which can be upwards of 70 per cent on large-scale litigation matters.

She added that LPO will gain momentum as a growing number of in-house counsel look to firms to offer solutions for reducing hourly billing rates. In fact, Matthews has already seen a number of clients demand LPO from their law firms.

“The market is more educated and users of legal services are a lot more savvy ... they want to know they are getting value for money,” she said.

While Matthews could not name specific clients, she did reveal that LegalResources is targeting firms and organisations that have a high turnover of low-value documentation and contract management, or large amounts of litigation, such as finance, insurance and telecommunications companies.

Matthews admitted that LegalResources would struggle to compete on price with LPO providers based in India, for example, but she believes on-shore quality control and project management – LegalResources’ point of difference – will ensure LegalResources remains competitive in the Australian market.

“There is a negative perception of offshoring, particularly around quality, so the fact that we’re Australian and have a good understanding of the Australian legal system makes us competitive,” she added.

Everyone’s doing it: LPO uptake in Australia

Kind & Wood Mallesons was the first large firm in Australia to publicly sign a contract with an LPO provider. In October 2011 the firm outsourced much of its low-level legal tasks, such as document review, document processing, due diligence and discovery, to India-based Integreon.

Integreon is the largest global LPO provider, with 17 international offices. It has nine of the top 10 global law firms as clients and the 10 largest investment banks.

KWM managing partner Tony O’Malley described the agreement as a “watershed moment” for the Australian legal sector.

But Australian firms were working with LPO service providers long before KWM inked the 2011 deal. In 2010, Advent Lawyers formed a strategic alliance with global outsourcer Pangea3 and Blake Dawson (now Ashurst) initiated a relationship with LPO provider CPA Global. Rio Tinto, one of Allens' major clients, also uses CPA Global to outsource much of its in-house legal work, bringing an estimated cost saving of around 20 per cent.

More recently, Corrs Chambers Westgarth announced it had appointed Integreon and South Africa-based Exigent to its newly-formed LPO Panel.

Comments (5)
  • Avatar
    Lukesh Kumar, Advocate Monday, 06 August 2012
    <p>yes these days the LPO is a emerging system through which at low cost the works can be done with fine accuracy, i am running a law firm at Jharkhand (India) and we are keen interested to accept the work as an LPO, pls visit website: <a href="www.lexconsortium.in" rel="nofollow">www.lexconsortium.in</a>, Ph: +91-9430382877</p>
    0
  • Avatar
    <p>Yes, it was only a matter of when not if. As the sheer volume of data increases with every passing year, law firms and lawyers have to be able to provide cost effective solutions to their clients or face losing them to another firm that offers (quicker and cheaper) LPO services.</p>
    0
  • Avatar
    <p>It was always going to happen and now it finally has, after a little wobble. Everything now seems to start with document review and e-disclosure! Firms need to start embracing the LPO, because the costs savings are unavoidable. I think they're here to stay.</p>
    0
  • Avatar
    <p>Local firms are definitely uptaking LPO services at a greater pace - and the key is the provider having a offering which is flexible, is easy to implement process flow wise and does not commit the firm to a minimum volume of work. As for on-shore and offshore onshore the key to good quality of work from an offshore provider is a focus on Australian firms and quality work at an competitive price. LPO has moved far beyond a cost cutting exercise - it is all about enabling firms of all sizes to expand their practice without sacrificing quality and enabling in-house team members to focus more on client end relationships. </p>
    0
  • Avatar
    <p>Great to have this confirmed outside of the US/UK. All the anecdotal evidence actually shows  that Australia is starting to look more innovative and embracing of alternative delivery models than the US.</p>
    0
Avatar
Attach images by dragging & dropping or by selecting them.
The maximum file size for uploads is MB. Only files are allowed.
 
The maximum number of 3 allowed files to upload has been reached. If you want to upload more files you have to delete one of the existing uploaded files first.
The maximum number of 3 allowed files to upload has been reached. If you want to upload more files you have to delete one of the existing uploaded files first.
Posting as
You need to be a member to post comments. Become a member for free today!