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The global reach of legal process outsourcing

With Australian firms starting to consider the opportunities provided by legal process outsourcing, LPO provider Fronterion predicts that 2011 will be a pivotal year for the development of the legal processing outsourcing industry worldwide. Below is an edited version of the LPO consultancy's top ten LPO trends for the year.

1. A fundamentally changing legal profession: Continued downward pressure on costs and the globalisation of legal services provide a perfect environment for LPO. Those who refuse to engage with LPO will increasingly become a minority - the industry can no longer be ignored.

2. Enterprise approach: Many firms already outsource legal work at partner or department levels. However, LPO is more effective and efficient when a firm implements a firm-wide or "enterprise" approach, led by senior management.

3. Onshore expansion: The growth in onshore and hybrid on/offshore delivery solutions will begin in earnest in 2011. This trend will be equally prevalent in the United States and United Kingdom, with LPO providers and firms already building capacity.

4. Expanding client geographic/jurisdictional reach: Demand for LPO services will spread to new markets. In the US, law firms in Texas, the Midwest and the Pacific Northwest are potential growth markets for LPO. In the UK, regions outside of London are also emerging growth markets. However, continental Europe will remain a challenging environment for LPO.

5. Progressive value proposition: LPO providers will have to offer more services and a more progressive value proposition to remain competitive. Alongside traditional litigation support, LPO vendors may also have to offer contract portfolio servicing, compliance, diligence, human resources, medical and broader legal support functions.

6. Increasing technology applications: As a result of the growing importance of technology, LPO vendors will use technology as a key selling point. Technology platforms will be used to offer diversified services and as a means for vendors to further embed themselves in client organisations.

7. Dynamic vendor landscape: The unprecedented growth and industry consolidation initiated in the fourth quarter of 2010 will continue to shape the dynamic LPO vendor landscape in the coming year. Overall, these consolidation trends are positive for the industry, as vendors emerge stronger, more capitalised and, most likely, considerably larger.

8. Public acknowledgement: The growing acceptance and adoption of onshore and offshore LPO will become more visible in the coming year. This will become increasing prevalent in the US where, in the past five to six years, corporations and law firms have remained virtually silent on all LPO-related matters.

9. Divergent vendor approach: Competition means that LPO vendors will have to differentiate themselves from each other in terms of services offered and delivery models. No dominant model exists (yet), and a range of different approaches will emerge next year.

10. Ethical guidance: Regulatory bodies start to address the changing legal landscape. In the US, ethical commentary is expected from the ABA's Commission on Ethics 2020. In the UK, announcements are expected from the SRA and the Law Society. Other jurisdictions that have been silent so far - such as Australia, Canada and South Africa - may follow suit.

For the full report, see http://www.fronterion.com/.

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