The global legal process outsourcing (LPO) market is expected to witness sustainable growth, growing at a CAGR of more than 31% from 2020 to 2025, as large corporations are particularly outsourcing their non-core business activities to third-party service providers to focus more on their core business while saving the costs incurred on employing an in-house legal team. Moreover, favorable government policies in countries, such as India, Malaysia, and Singapore, are also expected to contribute to the growth of the global LPO market. The highly secure enterprise-class software offering innovative features, such as portal website, collaboration, and document management, being introduced in the market continuously is also playing a decisive role in driving the growth of the market. E-discovery is emerging as one of the most important platforms in the LPO market followed by other major services, including litigation support, intellectual property (IP) support, contract drafting, and review. E-discovery and other software tools are allowing LPO service providers to process electronic information.
Based on outsourcing patterns, the LPO market has been segmented into off-shore outsourcing and on-shore outsourcing. If the legal service provider is located in the same country where the customer is located, the outsourcing process is commonly referred to as on-shore outsourcing. On the contrary, if the legal service provider is located overseas, the outsourcing process is commonly referred to as off-shore outsourcing. Off-shore outsourcing forms the largest segment accounting for a market share of more than 66%. As Asian nations are turning out to be the preferred outsourcing destinations for customers in North American and European countries, off-shore outsourcing is expected to witness a significant growth rate over the forecast period.
The competition between the leading market players has also been intensifying, particularly in recent times, owing to the continued emergence of low-cost LPO service providers in countries, such as India. Several reputed lawyers are moving out from big law firms and establishing their own firms, which offer low-cost LPO services to compete with the industry leaders.
Companies, such as Legal IT Group, Cerebra LPO, and Quislex, are investing aggressively in improving their service quality and geographic footprint.
Lawyers’ fees form the largest cost component accounting for (~35%) of the overall cost of legal process outsourcing service. Lawyers’ fees tend to differ according to the geographic region and the service offerings. For instance, lawyers in Asian countries charge 20%-30% lower fees than the fees charged by lawyers in the European and North American countries. Similarly, the fees charged by litigation and corporate lawyers are 25%-30% higher than the fees for legal services related to other factions, such as employment, real estate, bankruptcy, and taxation, among others.
The report provides a detailed analysis of the cost structure of the legal process outsourcing service and the pricing models opted by the prominent suppliers in the market.
India has been one of the leading legal process outsourcing destinations since early 2010, thanks to the presence of a large number of small- and mid-sized law firms established by top lawyers from the leading law firms across the globe.
The average hourly fees of law firms in India are almost 17%-20% lower than the average hourly fees quoted by other law firms across the world.
From a sourcing perspective, the majority of suppliers design the legal process services in-house as part of the efforts to reduce security risks and ensure better flexibility in customization.
Suppliers widely prefer approved provider operating models to reduce risks and improve the potential for value creation. As such, looking forward into the future, suppliers are expected to move gradually to proprietary services. The report also provides details regarding quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis.
b. The global legal process outsourcing market size was valued at USD 9.03 billion in 2020 and is expected to reach USD 35.9 billion by 2025.
b. The global legal process outsourcing market is expected to grow at a CAGR of 31.8% from 2021 to 2025.
b. Growing preference for outsourcing non-core activities, such as legal processes, and favorable government policies in Asian countries supporting legal outsourcing are the two major driving factors driving the growth of the legal process outsourcing market.
b. According to the LCC/BCC sourcing analysis, India can be considered one of the best legal process outsourcing destinations.
b. Some of the key legal process outsourcing suppliers are Legal IT Group, Cerebra LPO, and Quislex.
b. The global legal process outsourcing market can be described as a moderately fragmented and competitive market characterized by several large market players trying to strengthen their position in the market by striking strategic partnerships with small- and mid-sized companies.
b. Lawyersâ€™ fees form the largest cost component accounting for almost 35% of the total cost of legal process outsourcing services.
b. Adopting innovative sourcing practices, increasing spend transparency, shifting to low-cost countries for sourcing, and standardizing the contract period can be considered some of the sourcing best practices in the legal process outsourcing market.
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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