Legal Process Outsourcing (LPO) 101 – A Comprehensive Guide
Legal Process Outsourcing (LPO) is a growing trend worldwide. Although small and large firms initially overlooked LPO due to concerns about potential fraud risks, the industry has periodically thrived. Law firms and individual attorneys can outsource legal work to free up their time and focus on critical matters.
There is no time off when it comes to legal affairs. Attorneys are overwhelmed with paperwork and struggle to find enough time to concentrate on case strategies or take breaks. Given the importance of legal matters, a decline in demand seems unlikely. Consequently, it’s always one case after another, leading to consistent work and burnout.
Efficiency varies among individuals and law firms. However, we cannot overlook the fact that everyone needs rest to prepare for something greater. Law firms need time to focus on their growth, which can be challenging due to the overwhelming amount of paperwork.
Let’s explore the benefits of legal process outsourcing (LPO) for firms and how you can find the best agencies to outsource legal processes!
What is Legal Process Outsourcing?
LPO is the process of outsourcing legal work to a service providing agency. The agency consists of virtual legal assistants who manage most of your work but in a significantly cost-effective way. Services encompass all aspects, including:
A legal clerk can manage emails, draft legal documents (briefs, motions, contracts, pleadings, notices, etc.), create cases in the CMS, conduct research, perform e-filing, review cases and documents, schedule meetings, provide post-litigation support, and handle all other administrative tasks. Attorneys gain ample opportunity to prepare cases by outsourcing much of the workload, increasing their chances of winning cases.
The Growing Trend of Legal Process Outsourcing
LPO delivers results, which is evident in the industry’s growing trend. The global LPO market was valued at approximately $19.9 billion in 2023 and is projected to reach $147.8 billion by 2032, with a compound annual growth rate (CAGR) of 25%. In the United States alone, the LPO market was valued at $10.4 billion in 2023 and is expected to grow at a CAGR of 30.6%, reaching $114.9 billion by 2032.
About 70% of law firm leaders reported outsourcing some or all of their back-office and administrative functions, up from 56% in 2018. The American Bar Association states that legal assistants can efficiently handle 50% of attorney tasks.
Benefits of Outsourcing Legal Process
Outsourcing legal processes comes with its benefits. Here’s why you should go for it:
Cost Effective
Outsourcing is actually very cost effective. Think about it: hiring full-time or part-time in-house paralegals demands competitive salaries, benefits, and other resources. On the other hand, a remote clerk will perform the same job efficiently, but in half or one-third the price. A recent analysis by Hazen Tech showed that hiring one assistant can save $30,000 annually, process 3,168 cases, and manage 25,344 emails. In contrast, ten teams can save $1.5 million, process 158,400 cases, and handle 1.2 million emails. The amount saved can be used to grow your firm.
Faster Turnaround
When a team is dedicated to a specific task, you can definitely expect a faster turnaround. LPO companies are comprised of multiple teams, each with approximately 10 members. Every team is responsible for one service, such as legal drafting. This organization ensures teams are not overloaded with work and have sufficient resources to deliver projects within the given timeframe. Also, companies can size up whenever you need additional assistants.
Specialized Expertise
LPO companies provide access to diverse legal professionals with specialized expertise. These professionals have extensive experience handling legal research, document review, contract management, and compliance tasks. Instead of relying on a generalist, firms can assign tasks to experts who specialize in specific areas of law like personal injury protection, property damage, corporate law, etc. LPO providers also stay updated on the latest legal technologies, AI tools, and industry regulations to ensure every outsourced task is handled perfectly.
Reduced Administrative Burden
You might be drowned in administrative work right now, but your legal assistants can manage it. On average, firms spend 40% – 50% of their time on administrative tasks and the remaining on client work. Outsourcing legal processes can save half of your time, which can be used on strategizing and other client-related work. Resultingly, your firm progresses and clients are satisfied.
Access to Advanced Technology
Some LPO companies, like Hazen Tech, have access to advanced technologies that they leverage during outsourced legal work. This includes AI integration, Microsoft 360 solutions, and similar tools to enhance the work quality. This approach significantly reduces the chances of errors. Further, it automates several processes, allowing the legal assistants to manage more projects than usual.
How To Find The Best LPO Agency?
Finding the right Legal Process Outsourcing (LPO) agency is crucial for ensuring efficiency, cost savings, and high-quality legal support. Here’s what to look for:
Industry Experience
Choose an agency with a strong track record in LPO. Look for providers that have been in the industry for years and have worked with reputable law firms. An experienced agency understands legal complexities and ensures compliance with regulations.
Range of Services
Not all LPO agencies offer the same services. Some focus on legal research and drafting, while others support end-to-end litigation. Assess your firm’s needs and find an agency that offers comprehensive solutions, including pre-litigation support, e-filing, case management, and administrative assistance.
Data Security & Compliance
Legal work involves confidential client information. The right LPO agency should have strict security measures, including encrypted data storage, secure communication channels, and compliance with legal industry standards like GDPR and HIPAA. Always ask about their security protocols before outsourcing.
Scalability & Flexibility
Your workload fluctuates and some months are busier than others. A reliable LPO agency should offer flexible engagement models, allowing you to scale up or down as needed. Whether you need one legal assistant or an entire team, the agency should be able to adjust accordingly.
Technology Integration
Advanced LPO agencies leverage AI tools, document automation, and cloud-based case management systems to improve efficiency. Agencies like Hazen Tech utilize Microsoft 360 solutions and AI-powered tools to streamline workflows. Partnering with a tech-savvy agency enhances accuracy and speeds up legal processes.
How To Begin?
It’s not easy to trust someone to manage something as sensitive as legal processes, but there’s an easy way to do it.
Step 1: Find an LPO Agency
There are plenty of companies available on the internet. Luckily, you’re already on one! Hazen Tech was awarded the 2024 Clutch Award for The Top Legal Outsourcing Company. You can evaluate a service provider based on the tips listed above. Once you’ve made up your mind, it’s time for step 2.
Step 2: Schedule a Meeting
Things get more apparent when you discuss the scenario with the service provider. You can share your concerns like data security, payment, team skills, portfolio, and other necessary information, which you think is essential for you to know. The meeting will help you learn a lot about the legal process outsourcing company. After your concerns have been resolved, proceed to the next step.
Step 3: Start Trial Based
You don’t necessarily have to commit to a long-term partnership. Instead, starting by outsourcing only one service, like legal drafting, is better. Also, you can set a probationary period for a couple of months to better evaluate the service provider’s expertise. If you’re satisfied, you can permanently outsource more services to them.
Step 4: Sign a Contract
After careful negotiations, finalizing the budget, and both parties agreeing on the project, it’s time to sign the contract. Before signing, check the documents and make sure everything is exactly as stated.
Wrapping Up
LPO is not just about cutting costs—it allows law firms to reduce workloads, focus on critical legal tasks, and take on more cases without burning out. Choosing the right outsourcing partner takes time, but the long-term advantages make it worthwhile. Attorneys can save hours on administrative work, improve case preparation, and expand their firms without unnecessary stress. As the legal industry continues to grow, outsourcing remains a smart move for firms aiming to stay competitive.
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