Outsourcing of services is a new norm. What used to be considered as merely a way of saving cost for large companies, has now become an important value-added tool for all businesses. Outsourcing of IT, HR and business processes are generally well-known, and most businesses will have embraced some form of outsourcing. So, what about legal services? Over the last decade, a new form of outsourcing has been providing that added value to businesses, this is known as legal process outsourcing.
Legal services outsourcing (LSO) or legal process outsourcing (LPO) is the provision of outsourced legal support services. The type of services on offer vary from supplier to supplier and client to client. Services can include highly specialist and complex legal advice, through to lower skilled but time consuming work like document review services. A typical range of LSO services would include: due diligence analysis and review, contract drafting and review, litigation support, intellectual property administration and contract management.
So, who are the recipients of LSO services? Law firms and their clients who are demanding the low cost quick turnaround of work LSO providers offer, and also companies with their own in-house legal teams who would traditionally undertake the work themselves. By outsourcing the legal support services, the lawyers are able to focus on providing the complex specialist advice, this reduces the legal fees and ensures focus is not lost on other time-consuming matters.
What are the prerequisites for the provision of LSO services? The key requirements are: the ability to provide high quality services on a timely basis; ensuring that the team carrying out the services has the necessary analytical skills and specialist training required; efficient and effective technology to send, receive and view documentation; security of data and confidentiality of information; the ability to work in partnership with the end user of the services, and the flexibility to adapt to the changing needs of the client.
What competitive advantages does Barbados have which meets the requirements of LSO clients? The Barbados workforce is comprised of individuals who are highly educated, motivated and well-travelled. There is a University of the West Indies campus on the island which ensures that a steady supply of graduates is readily available.
The Barbados legal system is based on the English common law system, and many corporate statutes are derived from Canadian corporate legislation. Barbados has a special relationship with Canada due to the Canada/Barbados tax treaty partnership, this has led to Barbados subsidiaries of Canadian companies being headquartered in Barbados. The headquartering of such companies would not be possible without relying on the dedication and skill of Barbadian employees.
The ability to speak to the client (in English, our first language) during office hours due to Barbados’ nearshore location (three hours from the Eastern Seaboard of the US) clearly gives Barbados a competitive edge. The importance of English being our native language should not be underestimated, it is vital to be able to fully understand, interpret and discuss documentation with clients. The lack of commonality of native language tends to be one of the biggest issues for Indian outsourcing companies.
Outsourcing has become easier to source from offshore locations due to technology. It is no longer necessary for documents to be piled high in a boardroom, and for teams of individuals to physically plough through binders. LSO firms review material online, in secure virtual data rooms. This efficiency requires high-speed, reliable data services. In Barbados, our telecommunications service providers offer fibre optic network services for voice and data to residential and business customers.
Innovate LSO Solutions Inc. (Innovate LSO), commenced operations in 2013 offering LSO services from Barbados to international companies and law firms. Innovate LSO offers tailor-made LSO services and promotes and supports captive LSO solutions in Barbados. A LSO captive centre provides an organisation with the resources to fulfil legal support services using its own employees, technology and systems. It’s an outsourcing solution managed and controlled by its own company. Many law firms are already successfully running such centres onshore and offshore. A captive centre can be set up as a separate company, which may have tax benefits especially if an offshore solution is utilized and set up as its own profit centre.
One issue for organisations considering a captive LSO solution is who will manage the centre? The ideal candidate may be an existing senior executive. How will the offer to live and work in another country be received by the senior executive, especially if it’s thousands of miles from home and where English is a foreign language? It may be a hard sell for some jurisdictions, however with North American and European expatriates living and working in Barbados and enjoying a high standard of living close to home, Barbados is not only an easy choice, it’s the right choice.
Barbados already has a reputation for providing excellent international business services, the cultural and linguistic benefits together with the ease of doing business with a nearshore provider makes Barbados an obvious destination for LSO services.