Legal Process Outsourcing, In-house Counsels, Law Firms and Providers: Researching Effective Practices

Abstract

Globalization and information technologies are the main enablers of Legal Process Outsourcing (LPO), the practice of procuring legal services from an external provider.   Most legal firms and in-house counsels will have to consider the opportunities and risks afforded by LPO, a market estimated to be worth $2.4 billion globally and growing,. Because  of this growth and the relative neglect of the LPO sector  in academic research,  the Outsourcing Unit at the London School of Economics undertook research into the provision of services and effective client practices in this.  In this article, we present practices used by LPO clients and their providers to realize value from LPO services.  The practices are based on data from 27 LPO providers, interviews with clients and providers from successful LPO relationships, and from lessons learned from prior Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) research.  The practices address the transformation of legal work, LPO strategy, provider selection, contractual governance, stakeholder buy-in, transition and coordination of work, provider turnover, and relational governance.