New draft guidelines on legal process outsourcing will
help many organisations unlock the opportunities available. Greater
clarity makes this an easier step to take.
Legal process outsourcing has been around for a several years
now and has been used in Australia by some companies and law firms,
particularly for document reviews, litigation and due diligence.
LPOs are part of the landscape in the UK and the USA, but in
general there has been a nervousness about their role in Australia
and how they might assist clients within the legal regulatory
frameworks that exist here.
In a first for this country the New South Wales office of Legal
Services Commission has published Draft Guidelines on practice
issues for lawyers regarding legal process outsourcing. The
Commissioner's Draft Guidelines make it clear that lawyers,
whether in-house or external, can use LPOs to assist them in
delivering legal services to their clients. Under the Draft
Guidelines there are a number of matters that an in-house or
external lawyer engaging in LPO will need to take into account, but
none of them is surprising. They include confidentiality, client
consent, conflict management and appropriate supervision. In
particular it is important to remember that the lawyer engaging the
LPO remains responsible for the delivery of the legal services to
Corrs has been using LPOs in certain matters for some years now
and we see the key to a successful LPO engagement is good project
management. Usually an LPO engagement will be a three way process
between the law firm, the client and the outsourcer. It's
important that time and thought is put into things such as
training, selection of personnel, communication protocols,
technology, security as well as clearly setting out the scope of
the work that the LPO will do. Locally you are also going to need
to put in place a quality assurance program that will allow the
local in-house and external lawyers to meet their obligations to
their client. That is one of the key points that follows from the
Commission's Draft Guidelines.
Recently we have started to see the LPO market in Australia
expand from document review into other areas of legal process. LPO
providers are actively marketing to GCs and to procurement teams,
offering lower cost solutions in areas such as bulk contract
management, drafting for pro forma documents or correspondence or
managing registrations and renewals. Many LPOs also offer basic
legal research and factual research, which can be useful for
in-house teams operating with few resources.
What the LPOs are offering is task focus work rather than matter
focus work. Disaggregation is the term that is used to refer to the
process of breaking down matters into tasks and then assigning
those tasks to their correct level. So rather than having an
internal team or an external law firm handle the entire matter, you
might have an LPO conduct the basic research or fill in the
precedent document in a low cost environment and then pass that
work onto the in-house or external lawyers. Disaggregating matters
is already on many GCs radars as a way of lowering costs on high
volume or high uniformity portfolios and matters. Disaggregation
already occurs within the in-house teams and within law firms.
It's the making sure that the right people are doing the right
work. LPOs are simply offering a variation on that, and I think
that is something we will increasingly see in in-house teams in
particular taking advantage of.
In the right matters legal process outsourcing offers cost
savings in both the litigation and the transactional environment.
Many in-house and external lawyers have been cautious about how
LPOs will fit into the regulatory framework and indeed how clients,
courts or opponents might respond to the involvement of an LPO in a
matter. The Commissioners Draft Guideline is certainly a positive
development that will help lawyers unlock some of the opportunities
LPOs offer for their clients.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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