Co-sourcing was once seen as an alternative to outsourcing and often argued as a better one.
Co-sourcing is getting an outside agent to do your work while production, time and quality are managed in house. When you co-source, you are still very involved in the job although not as much as if you did it yourself. Outsourcing too involves an outside agent to do the work; however once delivery and quality parameters are set, the client leaves everything to the offshore/outsourcing vendor to handle. Often where off shored back office legal work is concerned, all that remains for the attorney to do is appear in court.
Some years ago, law firms abroad preferred co sourcing to offshoring/outsourcing chiefly in order to minimize the apprehended risks of loss of confidentiality and client data. However, the recent years which proved that in India at least, the incidence of these risks has been almost nil, have to a large extent allayed these fears. The result is that the end of 2011 saw clients who had been offshoring work for some time and reaping its benefits, now wanting some more of the pie. Law firms that were outsourcing mainly legal work are now asking tentatively whether their offshore vendor can handle a niche project or billing, or maybe write some web content or develop customized software. ( There are also instances where off-shore vendors providing tech or engineering support have been asked to provide legal services.)
For obvious reasons, LPOs will oblige. However, employees in LPOs are generally lawyers. Therefore, where niche work is involved or the work is of a completely different nature from that done in-house or the project or process does not justify the expense of increasing employee count and consequent infrastructure development, the vendor will hunt for a co-sourcing sub vendor who could be either an individual/s or a small unit.
The co-sourcing unit reports directly to the off-shore vendor, and is supervised both in terms of time, production and quality by the off shore vendor’s team. However, the co-sourcing unit is never provided access to the core process or project.
For LPOs it is a win-win situation. For one, a variety of work looks good on the website. Moreover, they keep clients happy at very little cost. Last and certainly not the least, the profit margin is substantial since co sourcing saves the time and money spent on increasing employee count, administration of a large staff and the cost of maintaining infrastructure facilities for that staff.
Different LPOs deal in different types of work. The time will come when an LPO doing mainly research or discovery related work, will be approached to do back office legal work and vice versa. Will they then co -source to each other? Interesting thought.