April 25 by Patrick Wolf
It has always been a major concern that outsourcing production, mainly in the manufacturing industry, will produce a lesser quality product. People make this argument because it’s logical, right? You outsource mainly for a reduction in price, but spending less is sometimes (if not usually) coupled with a decrease in quality. No matter the criticism, however, companies won’t be swayed. The value of spending less is generally more than the value lost by a slightly lesser product. Like it or not, outsourcing is here to stay.
Is LPO Any Different?
In the last decade, the idea of outsourcing basic labor has expanded into industries other than manufacturing, one of the most recent being the legal field. Teams now are able to outsource many of their basic legal processes, allowing more valued employees to focus on higher value tasks. LPO or legal process outsourcing, however, faces much of the same classic outsourcing criticism. In line with above, these processes can be shipped as far as the other side of the world (to a country that speaks a different language), causing many legal teams concern about the quality of work.
Arguments Against Legal Outsourcing
Although there are many ethical arguments against LPO (such as what percentage of hours worked do not require a trained lawyer, whether LPO’s share of the workload will expand, and breaches in confidentiality), the main argument against LPO by the legal teams themselves is that they will lose control of the process. The theory goes, “If we do not own the people who are performing the work, how are we supposed to control them?” Many legal teams don’t believe that they can trust/control the people doing the work if they are not employed by the same company. It is one thing to attempt to mass produce basic goods overseas, it is a something else to mass produce and trust human behavior.
According to Mark Ross, speaking in the legal luminary track at Apttus Accelerate 2016, these arguments against LPO don’t hold water, especially as we move forward into an increasingly metric driven world. According to him “control has very little to do with the ownership of resources.” In reality it has to do with the governance, structure, and (especially) metrics that are put in place. By setting up these checks and balances, it will be much easier to mass produce and control effective behavior in outsourced labor.
In the past, and by that I mean barely 10 years ago, the main reason that it was difficult to control outsourced legal labor was because there was little insight into their day to day activities. It was very difficult to diagnose a problem, much more to implement the improvements needed. Legal has always somewhat lagged behind the currents of technology, but now they are finally coming to see the benefits. Establishing key metrics to measure processes gives companies the numbers necessary to diagnose and track the progress of outside labor. CLM and Cloud based software have significant roles to play in legal globalization going forward as they help to standardize and monitoring processes. By standardizing the metrics used to gauge results, companies can mass produce results, both on an individual and company wide level.
The legal luminary track really shined a light (pun intended) on the future of legal. These changes will force legal teams to take a new attitude towards legal outsourcing as they attempt to compete going forward. Mark Ross is expecting metrics driven processes to change legal teams’ prejudices against outsourcing labor, taking globalization into law.