Legal Research

Offshore Legal Outsourcing ? Panacea or Pandora?s Box?

By Gavin Birer

In this, the first of hopefully many columns, I wanted to take a few moments to introduce myself. My name is Gavin Birer and I am the founder and president of the first Canadian offshore legal outsourcing company. I am called to the Bar in Ontario and admitted as an attorney in the Supreme Court of South Africa. My legal experience is as a corporate commercial lawyer, practicing in Bay Street law firms and in-house as a General Counsel.

This month?s column is going introduce you to the offshore legal outsourcing industry (also commonly known as ?legal process outsourcing? or ?LPO?). Subsequent columns will provide a more in depth look at the LPO industry, India as an offshore destination, information security, the advantages and disadvantages of LPO, and of course, I will provide you with different views and news on LPO, both in Canada and abroad.

Paradigm shift
As you well know, law firms and in-house legal departments face a plethora of challenges. A growing demand for legal services; greater volume of work; higher expectations; quicker turnaround times; higher lawyer salaries; higher operating costs; reduced budgets and lawyer attrition are some of the challenges that lawyers face today. Whether you like it or not, these challenges constantly change the status quo. Have you heard the phrase ?something has got to give??

Legal services have traditionally been provided exclusively by ?locally qualified? lawyers, paralegals and law clerks. The conventional approach to providing legal services has historically been that all legal services would command a premium price, because the expertise required to provide the services could not easily be duplicated. The legal landscape is changing rapidly due to technology, globalization, and commoditization; and it is due to these changes that the prospect of offshore legal outsourcing is now viable.

For those who are unfamiliar with the concept, the phrases ?offshore legal outsourcing? or ?LPO? simply refer to the contracting out of legal work that was previously done by lawyers (paralegals or law clerks) within a law firm or legal department, to an external third party in a different country. India has undeniably become the primary destination for LPO services. In a world that is ?flat? (many of you have likely read Thomas L. Friedman?s famous book ?The World is Flat?), sending certain types of legal work to India is becoming an attractive proposition for law firms and legal departments.

In my view, these changes are nothing short of a paradigm shift in the legal services industry.

What legal services can be outsourced?
Lawyers generally serve as legal advisers to their clients; and perform qualitative, skill-intensive legal tasks (or at least that?s the goal). By contrast, offshore legal outsourcing vendors typically perform quantitative, ?lower-skilled? legal tasks, and serve as a support to their law firm and legal department clients. This support is crucial where a law firm or legal department is under-resourced ? particularly where the law firm or legal department needs to gear up periodically during busy periods.

The nature of work that can be outsourced is varied and includes document review, document drafting, legal research, due diligence, and much more. The main category of work that is increasingly being outsourced offshore with a high degree of success is document review. Document review work could include a review of documents for litigation purposes (e.g. discovery) or corporate commercial purposes (e.g. due diligence or creating and maintaining contract databases). LPO vendors typically work closely with their law firm and legal department clients to identify the ideal work that can be outsourced.

For these reasons (in case you are wondering), offshore legal outsourcing vendors will not, in my view, replace local lawyers any time soon. And besides, offshore legal outsourcing providers typically only provide services directly for local lawyers. ?
So is offshore legal outsourcing a Panacea or Pandora?s box? As a lawyer, the answer to that question should clearly be ?it depends?. It depends on the specific facts and circumstances. It?s my hope and goal that this column will strip away some of the hype and the hysteria surrounding this burgeoning industry ? an industry which has arguably brought about one of the most fundamental changes in the practice of law today. Ultimately, I think that LPO will become a ubiquitous service, providing benefits to the legal industry as a whole and to the clients that they serve. Stay tuned.

Full post as published by Slaw.ca on August 13, 2008 (boomark / email).