We read with interest the National Law Journal article Will Increased Compliance Burdens Lead to Legal Process Outsourcing? (12 August 2009) about using legal outsourcing to help meet new compliance requirements.
In our June post Legal Outsourcing Tipping Point? we suggested that the publicity surrounding Rio Tinto’s legal outsourcing reflected a tipping point for the legal process outsourcing (LPO) market. We think this NLJ article puts more weight on the scale to tip the market.
For years (literally) most legal media articles about LPO questioned outsourcing and raised caution flags. Many quoted large law firm partners as skeptics (honestly held views to be sure but unfounded in our opinion). Then came this summer’s articles about Rio Tinto merely reporting the facts of an outsourcing deal. Today’s NLJ article may represent a further shift: from skeptics, the legal media are now virtually advocates.
The article explains the proposed federal Financial Regulatory Reform, that it would increase corporate compliance cost, and that general counsels should consider using offshore lawyers to do some of the work. The article is by an executive at one of our fellow LPOs so it will not surprise readers that we agree with it. With the proverbial foot in the door, we suggest opening it a bit wider.
Specifically, the logic in the article applies equally to any heavily regulated area. That is, there is a lot of relatively routine legal work associated with many regs and such work is in the sweet spot of legal outsourcing. And when we say ‘legal outsourcing’, we choose these words specifically because ‘offshoring’ is too limited a view of legal outsourcing. Onshore outsourcing is another option and, in our experience, some US and UK lawyers are more comfortable with the onshore option or a blend of on- and offshore teams.
The shift in thinking by both lawyers and the media does not surprise us. Beyond the passage of time, which helps the legal market digest all things new, the economic crisis has forced corporations to reduce costs. Legal outsourcing is one of the low hanging fruits.
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