Advantages of the LPO Model

Legal Process Outsourcing, like all of the other outsourcing models are premised on the need by US and Western corporations to continuously reduce costs.

It is no surprise then, that the main (and maybe only) advantage of the LPO model is to reduce cost. Indeed, lawyers working for LPO's in the Philippines and India, make between $500 and $1500, depending on experience and education. In comparison, US and UK lawyers command 3 to 10 times higher salaries.

With rates of $20 to $40, LPO workers are cheap, by any standard and make a compelling case for the industry.

Are there other advantages to the LPO model other than cost? There are some less obvious advantages that are commonly mentioned:

-Turning the time zone difference into an advantage: LPO workers in the Philippines, and India will perform your work while you sleep. You can give them the work before you leave the office, and it will be ready the next morning. This is indeed an advantage for small work items like drafting and summarisation, but most of what is done by LPO's are large projects involving intellectual property work, document review and contract work.

-Permanent employees. Unlike contract lawyers that are hired and let go, and retain no corporate knowledge, LPO employees, at least in theory, provide a level of continuity for their clients.

-Scalability. With hundreds of employees, LPO's can provide their clients a scalable model where teams can grow or shrink depending of workload.

-Value-added services. Some LPO's (especially ones that claim roots in the KPO industry) are able to provide well-rounded services that extend beyond the pure legal work that one gets from a law firm or temporary legal workers.

Because the labor cost arbitrage is shrinking due to the crisis, and the competition amongst LPO's to hire a finite pool of talent, the marketing engines of LPO's are trying to focus on the other advantages the industry provides.