Legal process outsourcing is the process of obtaining legal support in different areas of practice from an outside law firm or legal support services company. The LPO system, according to a survey conducted by evalue survey isconsidered one of the fastest growing industries in the knowledge of process outsourcing (KPO).
In India and the Philippines it generated about $300 million in 2010 and it is expected to generate $960 million in 2015.In 2008, during the economic recession, the LPO grew up by 40 %. It can be concluded that the world is moving towards LPO, however Egypt is behind. The reason behind is lack of public awareness about Legal process outsourcing and high dependence on in-house legal departments.
Why is LPO in Egypt not growing comparing to India or U.S?
LPO in Egypt is not growing not because there are no law firms providing the service, but because the old culture of hiring a legal department still exists.
Nowadays many law firms in Egypt work according to the international standards offering:
A) Bilingual attorneys;
B) Partners around the world, which can help in serving the clients in their offshoring cases;
C) Specialized lawyers in wide range of practice areas such as corporate law, commercial law, intellectual property, maritime etc.
However, the old culture of hiring the in-house legal department still prevails, and this is mainly due to the fact that big companies operating in the old fashion manner and run by the ‘one man show’ management are either not aware of the existence of LPO, or simply do not know what and why to outsource.
Why to outsource?
A) Saving money and time
One of the main reasons that any firm or a large corporation should think about is cost efficiency. LPO as evident in international practice is one of the many tools used to reduce operational costs. Instead of hiring a legal department a company enjoy service of specialized lawyers serving its needs and attending to its cases and matters from A to Z. “Clients value LSO for its cost savings. Whilst a lawyer in major legal markets such as the US may charge from $150 to $ 350 per hour when performing services, LPO providers may charge $ 25 and $ 50 per hour depending on the skill level” . The LPO is able to reduce about 40% of the legal expenses of a given firm. Moreover, a law firm with wide range of areas of expertise will save the time, money and effort in hiring a particular specialist for a given case.
B) Offshore services
With the increase in world trade and business in the past three decades, investors and businessmen became more mobile and active on the international arena. And this is where LPO presents another benefit. Since most of the LPO service providers have a wide international network of partners in various countries and continents, it becomes a matter of a ‘click’ to establish your business outside of the national borders of the business. Instead of your legal department looking for a local law firm to establish or incorporate your branch for example in a foreign country, the LPO provider will simply do it for you for a less cost and in less time.
C) Efficiency and quality
The efficiency and quality of LPO comes from the strong knowledge and experience of the law firm providing the service as if your provider is a full service law firm then it has expertise covering all industries and practice areas. For example, if your intellectual property were infringed the IPR department in the law firm will take the responsibility and start the legal framework to protect your rights. The expertise lawyers efficiency comes from the legal research and the daily cases they are handling, so its better to have a full service law firm to handle your legal matters in order to be confident that it’s in the hands of qualified lawyers.
What are the services provided by Legal outsourcing providers?
A) Contract/agreement drafting and review
B) Tax matters
C) Representation before judicial, administrative and governmental entities
D) Banking and finance related matters
E) Litigation support
F) Legal and business consultation
G) Legal research and advice
H) HR matters
I) Labor law matters
J) Intellectual Property
LPO in many countries is considered an efficient and effective solution for the company’s legal needs and operational efficiency. The world is moving towards LPO as the better replacement for the legal department. According to the survey, LPO is the way to go since more than 80 % of respondents believe that in the next five years the LPO service will expand and develop., Therefore, Egyptian companies should re-think their operational strategy and set the right direction as to better serve their businesses locally and internationally.
. Lacity, Willcocks and Burgess (2014) The Rise of Legal Services Outsourcing: Risk and Opportunity. Great Britain. Bloomsbury publishing Plc. P 5