Legal Outsourcing: Current Market Trends

Overview 2
Catalyst 2
Summary 2
Methodology 2
Executive Summary 4
Legal outsourcing market set for a dramatic acceleration 4
Customer-driven quantification of market trends, sizes and growth 4
Table of Contents 6
Table of Figures 7
Table of Tables 8
Market Structure 9
The primary market players: enterprise legal functions, law firms and LPO providers 9
Enterprise legal functions 9
Major law firms 9
Offshore LPO providers 10
Three different models for legal outsourcing: conventional, LPO and now LSO 11
Activity flows with the legal outsourcing market 13
Market Drivers and Responses 16
Enterprise legal functions are under real business pressure for transformation 16
Major law firms are now starting to adopt new operating models in earnest 18
Offshore LPO providers are consolidating and extending their service offerings 20
Evolving Outsourcing Models 21
A major shift from tactical to strategic LPO 21
LPO is spreading steadily up the value levels 22
Understanding the linkage between value level and 'outsourceability' 23
The emerging legal services outsourcing model 26
Global Market Size And Growth Rates 28
Orbys' approach to assessment of market size and prediction of market growth rates 28
Conditions are right for exceptional market growth: the 'perfect storm' 28
Special factors for legal outsourcing may well hamper natural growth 29
Rapid growth is predicted for both LPO and LSO over the next two years 30
The LSO market will fuel additional growth in the LPO market 33
The LPO and LSO markets have significant further growth potential 34
Conclusions 36
Legal outsourcing state of the market 36
APPENDIX 38
LPO market size assessments and growth rate predictions 38
LSO market size assessments and growth rate predictions 41
Comparison of LPO and LSO market size assessments and growth rate predictions 42
Further reading 43
Ask the analyst 43
Orbys consulting 43
Disclaimer 43
List of Tables
Table 1: Major law firms surveyed for this report (UK/International) 10
Table 2: A selection of offshore LPO and BPO providers 11
Table 3: Proportion of global legal activity (by FTE) 40
Table 4: LPO market size estimates ($bn per annum) 40
Table 5: LPO versus LSO: proportion of global legal activity (by FTE) 42
Table 6: LPO versus LSO: market size ($bn per annum) 43
List of Figures
Figure 1: Comparison of LPO and LSO 13
Figure 2: Legal outsourcing market dynamics 14
Figure 3: Law firms progress with LPO and LSO strategy 18
Figure 4: Law firm adoption of LPO provider relationships and LPO captives 19
Figure 5: Primary LPO groupings by value level 22
Figure 6: LPO spreading steadily up the value triangle 23
Figure 7: Relative 'outsourceability' of LPO areas 24
Figure 8: LPO value versus 'outsourceability' 25
Figure 9: Predicted trends in LPO and LSO activity flows 31
Figure 10: Market size and growth in LPO and LSO market segments 32
Figure 11: Predicted two-year market growth for LPO and LSO 33
Figure 12: Predicted longer-term market growth 35