Unpacking The Trend Toward Legal Outsourcing

Unpacking The Trend Toward Legal Outsourcing

By now, any analyst of the Canadian legal scene can tell you that legal process outsourcing is here to stay. Not only that, but it appears to be growing in popularity. As firms constantly adjust and readjust to the fluctuating demands of clients, having a flexible, temporary work force can be a godsend, not to mention that it cuts down on operating costs.

Those are just a few reasons that have led to LPO’s popularity. This article will endeavour to give a summary of the trend towards outsourcing law firms by focusing on three different questions: what are the stats, what are the reasons for outsourcing, and when do firms decide to outsource? For an industry that changes near constantly, it’s helpful to unpack certain changes.

What Are The Stats

A survey done a couple years back by Corbin Partners – one of Canada’s premier business analysts – took stock of the legal outsourcing trend with some alarming findings. In their survey, nearly half of the respondents, all of them lawyers, said they use legal outsourcing at their firm or business. And the reasons for legal outsourcing ran the gamut, with firms and companies using outsourced legal experts for e-discovery, research, opinions, document review, etc. Since that survey, there have been no other major studies of note, but ask anyone anecdotally in the legal industry and they will likely tell you that, even since 2016, the trend toward legal outsourcing has climbed to new heights.

Reasons For Outsourcing

There are a lot of reasons why outsourcing is beneficial, but for the sake of brevity this article will focus on three: cost-effectiveness, time-effectives, and specialization. The cost-effectiveness angle probably doesn’t need a great deal of explicating, but in case you’re unfamiliar, firms and businesses tend to choose outsourced legal experts to avoid having to take on a new salaried employee, especially when the firm’s workload fluctuates. Say, for instance, you took on a large case; well, instead of hiring a new lawyer to help pick up the slack, you can simply outsource a temporary legal expert, whose rate will most likely be less.

Legal outsourcing is also time-effective, in that it allows more important partners to deal with more important issues, rather than spending their time on research or document review. For a firm that wants to optimize the use of its top talent, outsourcing smaller tasks is very attractive.

Finally, a firm can only contain so much variation – it’s never going to have people that specialize in everything. Say, for instance, your firm was tackling a case where labour was pertinent – instead of relying on existing lawyers to figure things out, the firm could pull from the vast network of outsourcing a legal expert specializing in labour law.

When To Outsource

Extrapolating from the reasons above, a law firm might choose to outsource when 1) it is trying to control its operating costs, 2) when it is trying to make the best possible use of its top talent, and 3) when it requires the consultation and advice of a specialized lawyer.

It remains to be seen at what point people stop calling legal outsourcing a “trend”, and begin to view it as a regular part of the legal industry, but given all the stats, and the compelling reasons for its existence, it’s safe to say sooner rather than later.

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