December 16, 2011
Onshoring LPO Work Because Recent Law Grads Are Looking for Jobs, Any Sort of Jobs, Even Bottom Rung Jobs
In Ten for 2012: Top Ten Trends for Legal Outsourcing in 2012, Fronterion, an international consulting firm for outsourced legal services, identifies profitability squeeze on foreign LPO firms as one of the market dynamics that will impact the industry next year. Why? Because the US labor market is flooded with unemployed law grads willing to be underemployed by taking LPO jobs here in the US. From the report:
Wage inflation abroad and soft labor markets domestically in the United States and United Kingdom have signi:icantly narrowed the cost differential for the legal professionals performing LPO services. Fronterion has observed that offshore LPOs charge clients $25‐35 per hour for basic legal services while contract review attorneys in the U.S., particularly in the Midwest, often are charging comparable rates of $25‐30 per hour.
The soft labor rates in the domestic legal sector place a natural cap on the amount LPO vendors can charge their clients, despite the increasingly expensive wages they pay their offshore staff. This squeeze in profitability is only set to increase in 2012 as the newly minted law graduates in the U.S. and U.K., who flocked to law schools during the downturn, are now seeking to join the workforce.
Hat tip to Want to Outsource Legal Work? Ohio Can Be as Cheap as India, Report Says by ABAJ's Debra Cassens Weiss. [JH]
LPO Services deals with Legal Process Outsourcing Services, Intellectual Property Services, Personal Injury Services, Bankruptcy Services, and Legal Research.It offers a comprehensive suite of services covering Legal, Paralegal and Secretarial aspects of law.LPO firms in India had predicted an annual growth of 200% due to recession related litigation and the increased need to save costs in the U.S. Their expectations have not been met.The major reason for this is that U.S. lawyers themselves have started looking at alternative fee structures due to the recession and job losses.In spite of some setbacks, the LPO industry has seen growth of about 40-60% in the last one year. Although some areas of practice, such as real estate, have drastically collapsed due to the recession, some areas such as litigation, document review, and corporate compliance, among others, have gained ground, resulting in a good amount of business directed to LPO firms in India.
Posted by: Legal Process Outsourcing | May 7, 2012 11:19:08 PM