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New fingers in LPO pie

New fingers in LPO pie

Thomson Reuters acquired legal processing outsourcing provider Pangea3 recently, meaning the legal publisher now has a stake in delivering legal services and the "new normal" of the global legal…

Thomson Reuters acquired legal processing outsourcing provider Pangea3 recently, meaning the legal publisher now has a stake in delivering legal services and the "new normal" of the global legal sector just got a little stranger, writes Angela Priestley

Every now and again there are certain movements within the global legal industry that signify a complete overhaul of what we've come to know and expect from some of the sector's key stakeholders. It may be a Magic Circle firm landing in Australia, a major trans-Atlantic merger or one of the globe's largest purchasers of legal services entering into an outsourcing arrangement.

Thomson Reuters' announcement that it would be purchasing legal process outsourcing provider (LPO) Pangea3 last month was one such movement. The transaction, believed to be worth $US40 million according to The Lawyer, gives Thomson Reuters a stake in one of the globe's largest LPO providers.

Pangea3 has 650 employees in India. It is expected to exceed the $1 billion revenue mark this year and it services some of the world's largest corporations and law firms. Locally, Pangea3 has a number of key significant relationships, including a partnership with Advent Legal.

Thomson Reuters said that the move would extend its ability to deliver information, software and workflow solutions to legal professionals globally, but the acquisition represents much more. It means that Thomson Reuters now has a finger in delivering certain legal support services, including document review, assistance with corporate transactions, intellectual property, risk management and compliance.

For Peter Warwick, the CEO and president of Thomson Reuters, Legal, the transaction will assist in meeting the needs of law firms and general counsel adjusting "to the realities of the 'new normal', where efficiency, quality and responsiveness are paramount".

That "new normal" is now also one where legal publishers play in the space of delivering legal services and have snapped up one of the largest employers of lawyers in the world.

It's a "new normal" where, as Canadian legal blogger Jordan Furlong noted, Thomson Reuters is effectively positioning itself to compete with the very same law firms it aims to service as clients through its more regular business models. While LPOs are keen to work in partnership with law firms to service clients, many firms still regard LPOs as a significant threat. Now, one of the legal sector's key suppliers is effectively legitimising the presence of LPOs and will no doubt contribute to growing Pangea3's global offering.

Just recently, Blake Dawson partner Tony Denholder. - who is currently leading Rio Tinto in their local relationship with another LPO provider, CPA Global, noted that six month ago, he could not have imagined himself working with an LPO. Knowing that one of his key clients, Rio Tinto, was already heavily invested in CPA GLobal, he also admitted that he felt somewhat threatened by LPOs. It wasn't until he saw the offices himself and came to understand their workflow processes and systems that he realised the potential for an LPO partnership.

With Thomson Reuters now on board with Pangea3, it seems that educating organisations and law firms alike on the benefits of LPO may get a whole lot easier.

That could mean that LPOs, via their parent companies, establish an even more significant sphere of influence on the delivery of legal services worldwide. Pangea3 already has a large-scale, and seemingly successful, partnership with some of the world's largest law firms and corporations.

Ultimately though, for a content supplier like Thomson Reuters, which already has its fingers in a number of different pies across the legal sector - including knowledge management services, practice management systems, website development and compliance services, to name a few - LPO looks like a promising venture to exploit. LPO is a subset of the broader Knowledge Process Outsourcing (KPO) industry of which, according to Evalueserve, is expected to reach $17 billion by 2013/14, with the legal subset of KPO expected to employ around 18,000 professionals in India and the Philippines by December 2015.

As for all the LPO skeptics (and there are plenty of them at Australian law firms) the Thomson Reuters acquisition will perhaps cement the fact that the "new normal" may just be here to stay.

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