Impact of Recession on LPO business

The human psychology always guides one to allure towards bigger things before being attracted to smaller ones. Everybody tries to be instantaneous in unfurling the answers to the questions confronted. If a person is placed in a position to save different currency notes from fire, he would naturally try to save bigger currency notes before hand.

The recession has acted like a compelling force to make people save in these prime times. People have tried hard to curtail their expenses. The status of solicitors in UK and USA have always remained unblemished and at a dignified position. Their status has always been alluring and attractive because of the confidentiality and quality of services rendered by them. Many business houses started outsourcing their work but the area of outsourcing in solicitors firms remained aloof. The reason of it being so was simple. One may outsource the physical working but none may outsource the ideas, thoughts, intellect and other tactics involved in the profession of the solicitors.

The business of LPO began with the outsourcing of back office support work which primarily consisted of secretarial work. It was further noticed entering into the second category of outsourcing i.e. in respect of paralegal work. It involved working of lawyers to provide good legal research, document review, document drafting etc. It required lawyers who were trained and conversant with the working on the tools. They have been providing a junior lawyer support to the solicitors in UK and USA.

Clients of solicitors based in UK and USA in order to reduce their expenses sought their services being outsourced to some service providers. In turn, the solicitor firms started outsourcing their work to providers in countries like India. This pace of outsourcing got a major push due to recession. The evil of recession has compelled solicitor firms to cut down their cost so as to provide same services at more competitive prices. Significantly, the focus of outsourcing is now tilting towards the legal services in place of secretarial and paralegal services. Legal Process Outsourcing has attained another dimension with the increase in outsourcing of legal work. The reasons for the beginning of outsourcing may be different but the reason of outsourcing the legal services like contract drafting, document review, deposition summary are the outshoot of recession. Recession has proved to be a reason for outsourcing for bigger services from the office of solicitors. There is no doubt that the LPOs have been benefited by the extraordinary growth of software and tools. The availability of software and competent personnel in countries like India has attracted the outsourcing to greater extent. It can be easily visualized that most of the big solicitor firms will have their extended branch offices in India.

Recession and Legal Process Outsourcing

The meltdown of the economy world wide sent shocking signals to the head of states. The process of looking out for the causes of recession and measures to hold the recession began. The economists swung into action to dig the policies so as to find reasons for the recession. There have been allegations and counter allegations in ascertaining the reasons of recession. Similarly, the intellectuals started suggesting one after the other remedial measures.

The prominent result of the recession was crunch in the availability of funds with different organization and groups. This in turn, resulted into cutting of costs. Many giant companies also felt the heat. The social set up having abundance of job opportunities found themselves in dearth of the same. The government found itself trapped into a vicious circle. The sustainment of social system was the major issue to be formally dealt by the government. The capitalist government started becoming socialist. It started looking out for all those avenues whereby it could instill confidence amongst people and increase their buying power. Certain organizations required life support. The private organizations looked towards the state so as to help them survive these crises. The concept of outsourcing had born out of the formal business i.e. to increase the profit. Every organization looking for the optimization of the profit tries to reduce the cost and increase the receipts. The financial meltdown across the world gave a clear cut signal to the solicitor firms in USA and UK to cut down their costs so as to maintain their profitability while stressed to reduce the receipts.

Outsourcing was identified with BPOs but for last few years knowledge process outsourcing has found its place. The prominent amongst them being legal process outsourcing. The financial meltdown in economy in developed nations has added a growing chip in the economy of developing nations. It will not be an irony if it is taken as a balancing exercise. More solicitor firms of US and UK have been attracted to outsource their legal and paralegal works to their counterparts in developing countries like India, Philippines. The concept of legal process outsourcing has got a boom in its stage of infancy. The amplitude of growth in LPO industry well explains this. Apart from the financial angle the readily available legal eagle boosted the growth of LPO. Recession is inversely proportional to the growth of legal process outsourcing.

In view of decrease in spending power of people, the solicitors will look forward to provide same services at cheaper prices. This will in turn lead to passing off those services to LPOs. The legal process outsourcing is bound to grow by leaps and bounds. The magnetized attraction by LPOs has started attracting outsourcing of legal paralegal and back office support services. It really is a wonder that the industry is growing out of the meltdown of the financial economy of the world.