How to Manage Legal Risks when Outsourcing & Offshoring to India?

Legal Process Outsourcing or LPO (that implies assigning the work to third-party companies) has emerged as the new trend in the industry across the globe today. This is so because not only is outsourcing synonymous with reduced costs, but also provides instant resource access that is amply skilled and delivers high quality work. But no business benefit comes without some management menaces and in this case also, there is a wide list of legal outsourcing risks you must be aware of to be able to manage them well in the time of need. The best of our industry experts come together to bring to you the top risks involved in the process of outsourcing of legal functions to India and also the ways that you can use to manage risks while outsourcing.

LPO Risks and their Effective Management

Effective management is the sole pillar to safeguard the brand and reputation of your organization while opting for outsourcing business services to India . Here are the risks that you can most probably come across:

• Confidentiality Confidentiality and security are one of the biggest pillars of the legal industry. As outsourcing legal functions to India requires sharing a lot of confidential information about your esteemed clients, it is strictly advised to sign an all-inclusive NDA (Non-Disclosure Agreement). Also, it is better to carefully select a niche outsourcing service provider that has expertise in spearheading legal functions.

• Competitors Offshoring almost always involves sharing of important intellectual property and a lot of other information to an alien company situated oceans away. This can make way for unwanted competition. To understand this better, we can consider the example of Chinese market, which largely catered to the outsourcing needs of American automakers to create vehicle parts. After around two decades of providing outsourcing services to them, the Chinese market emerged as one of the most popular automobile manufacturers in the US market. To avoid such backfiring situations while offshoring to India, especially in terms of legal processes, considering the long-term impact of your organization’s competitive advantage, is hence very important.

• Project Delays
As far as legal matters are considered, timeliness is a very important trait. But when you are outsourcing your organization’s legal functions, the risk of delays in the supply chain can often give you sleepless nights. There are some legal practitioners around the world who might have had bad experiences with Indian outsourcing service providers in terms of meeting their deadline expectations. Although sometimes external factors out of our control (like weather and labour disputes) are responsible for such project delays, it is still advised to add appropriate clauses (like compensation for costly buffers) in the service agreement to avoid any losses in the future.

• Sub-Standard Performance One of the biggest legal outsourcing risks that can arise down the road is unsatisfactory work performance. This usually happens due to lesser visibility across the outsourced arrangement as compared to an in-house team. Business conditions keep changing and the professionals working on your project need to be flexible according to the same. But due to reasons like distanced off-shored location and different time zones, your extended team might not be able to take speedy corrective actions. To curb this, you can select a team with which you can easily communicate and establish a trust bond.

The above-mentioned risks are more or less unavoidable when you talk about outsourcing to another country and the need to consider and prepare for everything beforehand increases in case of outsourcing legal processes. Spending some time in carefully selecting your outsourcing partner is definitely very important but your work is not just done there. As an effective manager, you need to keep checking in on your ‘extended team’ to ensure that the service quality is always up to the mark. For this, you can schedule regular progress meetings and even try to connect with the team members humbly. Just follow our expert guidelines to help with LPO risks and experience the ease of handling everything within your budget.