One of the latest entrants on the horizon to help and make the world flatter, in a way famously elaborated by Thomas Friedman, is the industry we all popularly know as the LPO (Legal Process Outsourcing Industry). Although the legal outsourcing industry has been around for quite some time now yet the transformations have been quick as compared to other industry verticals. Quite naturally the journey over the learning curve has been quite steep over the years. From the low end transcription and data processing jobs to the top of the line research projects the story so far been fast and exciting.

There have been various reasons for this journey, riding on the back of developments in the Information and Communication Technologies, the industry was a quick response to the growing need for radicalizing the cost inefficiencies that had crept in the legal services industry. The traditional model for law firms had started tilting too much in favour of the big law firms and the need for a more efficient service delivery mechanism was long felt. This change in fact was only a matter of time once clients started realizing the benefits of off-shoring and outsourcing in different areas.

The commoditization of legal services led to newer players in the legal services realm and these new entrants changed the picture forever bringing in pricing efficiencies and cost rationalization in a manner which law firms had not been used to.

However, the LPO industry too has its own set of challenges and in the following paras we list and analyze some of these challenges:

a) Human Resources

i) Procurement
ii) Training and development

b) Client satisfaction

c) Sustainable profitability

d) Currency fluctuations

e) Market fluctuations

(a)   Human Resources

   i)    Procurement

India is a common law country and English speaking population is not uncommon. While the above two are indeed the two most fundamental skills required for people working in an outsourcing unit- these are certainly not self sufficient and exhaustive in themselves. A typical work force for an LPO should not only be aware and adaptable to learning different laws they should, quite uniquely, also be capable of efficiently handling new technologies.

Technology is at the very heart of legal outsourcing and the differentiating factor.
Hence, LPOs not only require good lawyers but also those who are adaptive and responsive to newer technologies.

Secondly, unlike traditional practice of law by independent professionals, LPOs work on a larger scale with projects at times running into a few months and teams of varying numbers working onto every project. This requires LPOs to have lawyers who can also be good team players and as and when required – good leaders and managers.

   ii)    Training & development

Procuring the right people with the right skill set is just half the job done. As stated earlier, working with LPOs is about ability to adapt and improvise as and when required. This requires a receptive and flexible team and also an effective and good management which is able to keep the workforce on its toes.  

Training is an ongoing process and LPOs should work closely with the clients to keep the staff well equipped with the necessary skill set.

b)   Client Satisfaction

LPO industry, being services vertical relies heavily on fostering long term relationships. This is only easier said then done. Developing long term relationships require, amongst other things, a keen understanding of your clients’ needs and the ability work with them to reach the desired ends. The first rule of any service industry vertical is that of client satisfaction and without which there can be absolutely no scope of any significant growth.

One may take a cue here from the success story of Indian software companies which have survived and flourished through some tough years through the long term relationships forged with the clients.

c)   Sustainable Profitability

Being a niche industry in its nascent stage- LPOs are yet to have a matured and sustained marketplace. This would, as stated earlier, be a direct outcome of fostering long term relationships with clients over varied industries and economies. Sustainable profitability can be achieved only through a mix of various strategies such as spreading the client base over varied industries and geographies.

d)   Currency Fluctuations

LPO being an export oriented industry where contracts run into long time periods of sometimes up to many months and in different currencies (depending upon the negotiated contracts), if these receivables are not managed efficiently and currency risks not hedged effectively, situation may get messy. Managing receivables through an effective use of currency hedging instruments to offset any unfavorable drop or surge in currency prices is a prerequisite skill for all LPOs in the long run.

e)   Market Fluctuations

LPOs require a long term strategy to offset any adverse impact that may arise out of market fluctuations. Markets here refer to both the geographic markets in which the clients operate as well as the industries. For eg recession in the North American market would adversely impact the workflow for some LPOs and to counter which they should have a diversified client base spread in other geographies as well. Same is the case with LPOs concentrating on specific industries.

About KPO Consultants

KPO Consultants is the pioneer consulting company which provides business solutions exclusively to the LPO industry. We work with the established and aspiring LPOs to set up their LPO ventures and overcome their complicated business problems and also help management make big decisions affecting top line growth of their company. KPO Consultants offers consulting in areas of strategy, operations, technology, marketing and sales, human resources, and strategic alliances. We also provide end-to-end support across entire business lifecycle; building business synergies from the scratch till realization of its benefits and ongoing developments. We have served several clients in the United States, the United Kingdom, Singapore, Philippines, Mauritius, India, Canada, Australia, and many more countries.

For more information, please visit our website www.kpoconsultants.com or write to us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .