Legal Process Outsourcing (LPO) Category Intelligence
Outsourcing legal services to third-party providers helps law firms to reduce the cost of legal services without compromising on service quality. This allows firms to increase their profit margins and, in turn, offer competitive rates to their clients. However, a rising need for stringent security systems has been observed among both, clients and LPO service providers, to ensure the privacy of client data. Multiple cases of data breaches have been reported in the last 10 to 15 years despite having proper security measures in place. As such, lawyers are highly emphasizing this aspect while evaluating the competence levels of outsourced agencies. For instance, Focused Technologies Imaging Services (FTIS) was awarded a USD 3.45 million contract from New York State in 2008, wherein employees were required to scan the State Division of Criminal Justice Services records, which included sensitive personal information such as fingerprints, Social Security Numbers (SSNs), and dates of birth. FTIS outsourced more than a third of the contract to an Indian company for USD 82,000. In March 2016, after a lawsuit was filed, FTIS agreed to pay USD 3.1 million in penalties and fees for unlawfully outsourcing the work to India and risking the privacy of millions of people.
As India is a leading destination for outsourcing LPO services, it has become essential for clients to understand the data security measures of the country. The legal aspects of data protection are distributed under various acts in India. One of these acts is the Information Technology Act 2000. This Act addresses electronic data, computer crimes, hacking, damage to computer source code, and breach of confidentiality provisions. However, the privacy rules of this Act do not apply to Indian companies.
Legal Process Outsourcing Category Intelligence Highlights:
• Legal process outsourcing service providers are collaborating with small regional LPO companies to outsource legal services as well as maintain high profit margins, low overhead costs, and their overall competitiveness in the market.
• The legal process outsourcing market has a fragmented competitive landscape and is witnessing the entry of several small regional players.
• Suppliers largely prefer approved provider operating models to reduce risks and improve the potential for value creation.
• The growing preference for outsourcing non-core business activities, such as legal services, is playing a vital role in driving the growth of the legal process outsourcing market
• The global legal process outsourcing market can be described as a moderately fragmented and competitive market characterized by several large market players striking strategic partnerships with small- and mid-sized companies to leverage the low-cost legal services offered by the latter.
• The salary of lawyers forms the most important cost component of the total cost of legal process outsourcing.
• APAC is turning out to be the preferred legal process outsourcing destination for large corporations across the globe owing to the strong IT infrastructure being rolled out and the low-cost legal services available in the region.
Grab your copy, or request for a free sample of the “Legal Process Outsourcing Industry Procurement Intelligence Report, published by Grand View Research” for In-depth details regarding supplier ranking and selection, sourcing, and pricing criteria & strategies.
Legal Process Outsourcing Services:
• Contract Drafting
• Review and Management
• Compliance Assistance
• Litigation Support
• Patent Support
Legal Process Outsourcing Industry – Supplier Intelligence – Capability based ranking & selection criteria with weightage:
Operational Capabilities – Weightage
• Years in Service15%
• Geographical Service Presence35%
• Employee Strength15%
• Revenue Generated15%
• Key Clients12%
Functional Capabilities – Weightage
• Accounting and Billing15%
• Document Review14%
• Form Completion14%
• Tax Management15%
• Contract Drafting14%
• Legal Publishing14%
Add-on Services provided by Grand View Research Pipeline:
Should Cost Analysis
In the LPO category intelligence study, we have estimated the pricing for the key cost components. Lawyers’ fees are the largest cost component of LPO services. They account for more than 35% share in the overall service cost. Lawyers’ fees are significantly affected by the Covid-19 pandemic. Firms that use cloud-based portals and CRM systems to increase client access performed better than conventional firms, which were forced to charge lower rates due to the pandemic. Moreover, lawyers working in law firms witnessed lower fees growth (~1-2% per year) compared to independent lawyers (>5% per year).
Geographic location is one of the most important aspects while analyzing the rate benchmarking of legal process outsourcing services. In our research, we have analyzed the fees of lawyers across 48 U.S. states. Using rate benchmarking analysis, we found that Washington, New York, California, New Jersey, and Delaware have the highest lawyer fees. The lawyer rates in these states are approximately 30% higher than the U.S. average. Meanwhile, states such as West Virginia, Iowa, and Oklahoma have 23% lower lawyer rates than the U.S. average.
To gain a comprehensive understanding of other aspects of rate benchmarking, please subscribe to our services for the complete report.
Labor is one of the key components of costs incurred while offering a product or service. As such, understanding the pricing structure of salary is important for organizations when selecting an appropriate supplier and building a negotiation strategy. It is also essential in determining whether the category under focus should be outsourced or built in-house.
As per our research, legal associates at Morae Global and QuisLex earn 22% higher salaries than those working in other leading companies, such as UnitedLex and Mindcrest. However, the YoY increment rate in such companies largely depends on the KRAs.
It is cumbersome for any organization to continuously track the latest developments in their supplier landscape. Our newsletter service helps them remain updated, to avoid any supply chain disruption which they may face, and keep a track of the latest innovations from the suppliers. Outsourcing such activities help clients focus on their core offerings.
Brief about Pipeline by Grand View Research:
A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain which helps in efficient procurement decisions.
Our services include (not limited to):
• Market Intelligence involving – market size and forecast, growth factors, and driving trends
• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions
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