In 2007 I conducted complementary research projects that investigated the efficacy of data analytics and legal process outsourcing (LPO). For the firm, I concluded that neither was fully developed and that both resources were a bit of a “black box” as vendors were reluctant to divulge specific information. I vividly recall a number of conversations with providers that resulted in a confusing “Who’s on First” back-and-forth. In the past seven years, predictive coding has emerged from the darkness and we now better understand the components of its defensibility; how it works (algorithms), what it costs and where it succeeds. However, other than generic predictions of doom, the details of outsourcing aren’t really discussed in the community and until recently, I didn’t have much insight into the process and practice of LPO’s.
Legal Process Outsourcing (LPO) Market Analysis and Segment Forecasts To 2020 prompted this post and provides an interesting summary of the global LPO market. In the past year, by coincidence, I have had a number of colleagues gain considerable experience with LPO’s in India and, in turn, share their new expertise with me. What I’ve learned inspires an inherent philosophical question in eDiscovery; when the price is right, do we care about the process or just the results? A completely random sample of LPO’s paints the picture of organizations that are heavily staffed, tightly controlled and ultimately economical for clients. Their business models seek to exploit affordable labor while assuring quality work product through intricate, verifying processes. What I have learned (second-hand) about the LPO experience includes;
- Low labor rates allow for a “throw bodies at it” approach that encourages long hours and large review teams.
- Written and oral language barriers create internal communication issues and limit the nature of interaction between clients and review teams as well as amongst native review teams/project managers and western colleagues.
- Substantive understanding of US law is minimal and, especially with privilege (which is always difficult to explain to non-western cultures), may require extensive training, orientation and QC.
- To compensate for language and educational differences that may produce high first pass error rates, elaborate/sophisticated searching protocols are implemented to “steer” the review toward accuracy; essentially an iterative, manual process that mimics predictive coding.
- As a result of extensive searching, accuracy rates in the final work product are very high.
- To meet Safe Harbor requirements and to protect data privacy, LPO’s typically have elaborate control procedures to safeguard client information.
Market constraints in the States have forced efficiencies on practice affecting staffing, volume, process and timing and the quest for cost savings is motivating an evolution in practice management while creating the opportunity for legal process outsourcing. While US eDiscovery practitioners will look for input perfection at each stage, LPO’s seem to have created sophisticated ECA protocols along with review controls that seek to ameliorate input issues while focusing on the output. It is an exhaustive process that adjusts for the implications of location but that is both caused by and benefits from that location (foreign lawyers and low labor rates). For most firms, international outsourcing will be a sensitive and calculated decision (potentially motivated by a client) that depends largely on a comfort level with delegating control over the review process as LPO’s continue to be perceived as an unknown or “black box.”