Legal Process Outsourcing (LPO) in the Philippines

Legal process outsourcing (LPO) is fast becoming a sunshine industry in the Philippines. LPO refers to the outsourcing of legal operations and processes to a third party contractor commonly located in another country. The legal processes being outsourced often involve legal document review, discovery procedures, contract negotiation or management, deposition, lease abstraction, legal transcription, legal research, incorporation assistance, patent/trademark registration and due diligence.

In the Philippines, many LPOs have mushroomed due to increasing demand for legal outsourcing and offshoring abroad. Many US law firms prefer the Philippines due to its pool of top caliber lawyers who are experts in their fields, high English proficiency, similarity with the US legal system, lower labor costs, faster turn around and excellent telecommunications infrastructure.

The growth of the industry is further attributed to the government's support by way of tax incentives (i.e. income tax holidays) to the LPO's, additional incentives under the Build-Operate-Transfer (BOT) Law, permanent residency and employment of foreign expats, and many other breaks common in ecozone areas

In 2009, the country was hailed as the Off-shoring Destination of the Year for the second time at the National Outsourcing Association (NOA) Awards held in London. NOA is UK's sole outsourcing trade association that set standards which helped legitimize outsourcing as a business practice.

Twin legal system

The Philippine legal education system has it's roots in the US hence the familiarity of local lawyers with the latter's legal framework. In fact , many Filipino lawyers take US Bar exams and passed with not much difficulty. This gave the Philippine LPO industry a competitive edge against other similar players in the Asian region.

The top reason why law firms make use of legal process outsourcing (LPO) services in the country is to cut overhead expenses. A US lawyer would normally charge anywhere between $150-$600 per hour of legal work but the Philippine legal outsource lawyers only charge a small fraction of this, with results at par with their US counterparts. As companies struggle to streamline their operations and cut costs, outsourcing presents a very attractive option to keep up with their clients demands without sacrificing quality results at minimized costs.

According to the Business Process Association of the Philippines (BPAP), the outsourcing industry is expected to rake in $11Billion before the end of 2010 and the Legal Outsourcing industry does not lag behind. As more companies abroad seek economies of scale, legal process outsourcing is here to stay and the Philippines will prove to be a major player in the Asian region for years to come.

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