Legal outsourcing: S Africa new kid on block

India's place as the leading location for legal process outsourcing could face intense competition from emerging nations like South Africa and Philippines during 2010, according to a research report from LPO consultancy firm Fronterion.

The report states that India is presently the leading geography for legal outsourcing with over 85 per cent of offshore legal outsourcing vendors are primarily or exclusively located in India.

According to the report, South Africa will emerge as the strongest LPO destination for 2010, particularly with UK clients.

"The emergence of South Africa as a preferred destination with UK clients will be driven by its concurrent time zone, strong cultural affinity and a maturing vendor landscape," states the report, which also mentions the growth of legal outsourcing in the Philippines.

This aspect is a part of Fronterion's report 'Ten for 2010', predicting the top 10 trends in the LPO market in the coming year. The report predicts that 2010 will see an increased focus on transparency, leading to 'more efficient markets and heightened credibility of legal outsourcing initiatives for both buyers and vendors'.

The report also expects more detailed guidelines from the American Bar Association and other legal bodies on the ethics of legal outsourcing.

The report states that there may be an increase in the talent pool within LPOs as legal outsourcing becomes an attractive alternative career path for legal professionals with an entrepreneurial bent.

However, the report warns that the dynamic vendor landscape might not be entirely friendly to mid-size, less established LPOs, who might be forced to choose between consolidation and specialisation. The report also forsees an aggressive ramping up of operations by mainstream BPOs wanting to break into the LPO segment.

"The year 2010 may also see alternative delivery destinations onshore," the report noted, especially in Tier-II and Tier-III cities like Wheeling, West Virginia, and Reading, UK.

The company foresees that many corporations may start engaging outsourcing vendors directly as part of a change in structure and unbundling of legal services.