Large Law + LPO Providers = Growing Trend

With law firms under continuing pressure to provide innovative client services and drive down costs in their operations, it is no surprise that a growing number of firms are rethinking the traditional model for delivering legal services. One trend that shows no signs of letting up is the use of legal process outsourcing (LPO) providers such as Pangea3 and Integreon.  And the usage is not only growing by corporate counsel, early adopters of third-party services, but now increasingly by large law firms both in the US and overseas.

This week there was the announcement of Nixon Peabody’s preferred vendor agreement with LPO provider Pangea3 (a Thomson Reuters business).  The agreement with Pangea3 was established “in response to client demand to reduce the risks, burdens, and costs of electronic discovery (e-discovery) review.”  Pangea3 will be Nixon’s recommended LPO provider, “where appropriate,” and the firm’s clients will be able to benefit from preferred pricing.

Last October, in a move that was hailed as a “first” for an Australian firm, Mallesons Stephen Jacques announced an agreement with LPO provider Integreon to become the firm’s preferred supplier for LPO support services.  In March, the firm is set to combine with China’s King & Wood to create King & Wood Mallesons with over 1,800 lawyers.

While India remains the top destination for offshore work, other countries such as the Philippines and South Africa have also experienced an uptick in demand.  At the same time, onshore options in the US and the UK are gaining traction, fueled by client desire to have third-party work performed in a more familiar local environment.  Last year Pangea3, with major locations in Mumbai and New Delhi, opened a new office in suburban Dallas, taking on work “that customers – including law firm customers – want to source externally, but involve matters that by law have to be managed and performed in the United States, for instance matters subject to export controls regulations.”

In November, Integreon opened a new document review center in the Washington, DC-area to address demand for managed review services by local general counsel and DC law firms. And in the UK, Integreon also announced the official opening of its onshore LPO facility in Bristol last week, providing clients with contract management, document review, compliance support and M&A due diligence. “As the delivery of legal services evolves, it’s clear that most law firms and corporate counsel require a mix of onshore and offshore support”, said Janet Taylor-Hall, Global Head of Legal Process Outsourcing at Integreon. She adds, that while cost is certainly a factor in determining where the work should be performed, other factors ranging from work complexity and legal restrictions to language skills and time zone differences all must be taken into consideration.

It is fair to say that firms will continue to work hard to drive costs out of their operations where it make sense and without jeopardizing client satisfaction.  And it is clear that the use of LPO providers by large law firms is here to stay as part of that equation.

Posted by Marianne Purzycki