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New Law Sensation: What are LPOs?

Legal Process Outsourcing (LPO) refers to the practice of a law firm or business obtaining legal support services from an external law firm or legal support services company.

This practice has played an integral role in the legal experience since the 1950s. The LPO business model offers lower labor costs, 24-hour service, and direct access to professional lawyers available for whatever specialty is in need.

Many LPO firms participate in offshoring which is when the provider is based in another country. This involves the practice of outsourcing any activity except those where personal presence or contact is required.

For example, appearing in court and face-to-face negotiations would not work, but reviewing documents, legal research, writing, drafting of pleadings and briefs, and patent services are all available services. When the LPO provider is based in the same country, outsourcing includes agency work and other services requiring a physical presence, such as court appearances.

During the 1990s, outsourcing legal services was reserved solely for back-office type work, such as filing patents. Lawyers soon moved to outsource legal work to lawyers in local jurisdictions who were specialists in the particular area of law. Then outsourcing was introduced to foreign jurisdictions that offered legal services at a legal cost.

Subcontracting part of the legal process to different countries has turned into a booming market with consistent growth. This billion-dollar industry has quickly transformed the legal landscape, moving from the traditional law firm arrangement and creating an external resource that creates efficiency and success. Topics about LPO have ranged from the benefits of the business model to the likelihood of its growth within the practice of law.

Slowly but surely, these companies have evolved into a booming legal services market such as LPOs and alternate legal service providers (ALSPs). ALSPs are businesses that take on and improve any legal process that can be broken down and done efficiently. ALSPs took over the legal market around four years ago, and it has grown immensely since then. Studies have found that 79% of law firms and 71% of corporations now use ALSPs, due to the cheaper costs and high efficiency.

Companies like LawFlex provide law firms, financial institutions, international corporations, and startups with access to over 600 vetted legal professionals from all over the world. Creating a global and affordable service for businesses has taken the legal industry to a new level. ALSPs have accelerated their growth to a nearly $14 billion market share globally and have quickly become a mainstream segment in the legal market. Many law firms and corporate legal departments are increasing their work with ALSPs, ultimately creating growth and reducing costs.

One of the fastest-growing services where law firms are engaging ALSPs is consulting on legal technology (Legal Tech). ALSPs are pioneers in cutting-edge technologies such as artificial intelligence, smart contracts, predictive analytics, and more for the legal industry. These technologies assist with essential tasks such as project management and consultations with legal technology.

This past year, COVID-19 prompted law firms to get creative with managing clients remotely. ASLPs became an essential tool during the pandemic because the technology and services being offered assisted law firms significantly.

The accessibility and flexibility of ALSPs being completely remote has added immense efficiency to the legal market during the pandemic and will continue to be an essential tool to the legal market in the future.

Noa Siskind is an incoming fourth-year undergraduate student at the University of Tennessee. She is interning with Robus through a two-month intensive Masa abroad program. She is studying public relations with a minor in business administration and plans to attend law school in the near future. Noa has spent her time at Robus learning about the legal tech industry and hopes to apply this knowledge to a future law career in the US.

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