Third party vs. Proprietary legal platforms: Where lies the value?

Pune, India, 30 June 2011

- Buyers of legal process outsourcing services are still warming up to the idea of an LPO provider being a software vendor as well
- Most third party software vendors do not look at LPO service providers with proprietary platforms as competition
- Partnering with third party software vendors will prove beneficial for LPO providers

Over the last few months, ValueNotes has had discussions with a number of professionals from the leading LPO service providers in India and abroad, covering a number of topics. An overriding theme that echoed in these interactions was the crucial use of technology across multiple facets of LPO. Our latest report – Third party vs. Proprietary legal platforms: Where lies the value? – focuses on the role of technology in the LPO space: more specifically the role of software platforms in the delivery of LPO services.

LPO providers have traditionally embraced third party software platforms to deliver legal services. In the past two to three years, certain providers have broken away from this trend and made huge investments in infrastructure and talent acquisition to develop proprietary platforms and offer clients a mix of home-grown and third party offerings. The underlying rationale is to offer clients end to end services and solutions and also add to their own offerings.

One of the key findings in this report was that most third party software vendors (vendors that offered specific software platforms for legal services) do not look at LPO providers with proprietary platforms as competition. They maintain the stance that the development of these software platforms is their core focus, while remaining to be a a secondary focus for legal outsourcing service providers. However, given the growth of this industry, they do see LPO service providers as potential partners.

Buyers of legal process outsourcing services are also unsure of whether to switch over to LPO providers’ proprietary platforms. Few reasons for this reluctance are that third party platforms are tried and tested coupled with higher investments into research and development. However, there is some degree of openness towards LPO service providers and their software platforms primarily because buyers feel they would be better able to understand their needs and incorporate them into the software platforms.

We feel that one of the ways forward for LPO service providers is by forging partnerships with third party software vendors. These relationships will help LPO providers gain added visibility and traction with clients from the third party software vendor side.

“The ease with which a platform is able to be integrated with a client’s existing IT environment will be one of the key factors for them when deciding which type of platform to work with,” says Vineet Ramachandran, research analyst at ValueNotes Sourcing Practice.

The market for software platforms for legal services is already very diverse and fragmented. With the entry of LPO service providers armed with their home-grown software platforms, the market dynamics have begun to change. What this means for the industry as well as the buyers of legal outsourcing services is discussed in our report “Third party vs. Proprietary legal platforms: Where lies the value?”

ValueNotes, based in Pune, India, is a leading provider of market intelligence and research, with expertise across industries particularly in financial services, media, engineering, healthcare, IT and the outsourcing industry. Our customers include some of the leading global corporations, asset and wealth managers, management consulting firms, research publishers, PE and VC firms, and money managers.

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