4 Misconceptions About Dual Shore LPOs: The rise of legal process outsourcing in the Philippines
Legal Process Outsourcing (LPO) has become a multi-billion dollar industry globally. The ability to deliver high quality legal support services at a lower cost has spurred rapid growth of LPOs over the last five years. However, the legal industry continues to have misconceptions about the dual shore LPOs model, where resources are located both in the U.S. and in other countries, and the benefits it offers. While India and the Philippines lead the way in offshore LPO offerings, companies in a number of countries have begun offering legal services, including Canada, Israel, Ireland, South Africa, and a few Latin American countries. The Philippines has recently positioned itself as the leading dual shore LPO option (over India) for U.S. law firms and companies based on several key differentiators:
- Its legal system is analogous to the U.S., so bar-admitted attorneys in the Philippines are skilled at working with legal documents and meeting project requirements for U.S. firms;
- Its population is highly fluent in English with minimal accent, a common barrier to communication and quality with LPO resources in other countries; and
- Based on a long history with the United States, the country’s cultural values and work ethic match the values that U.S. companies have come to expect.
When exploring opportunities to outsource work to dual shore providers, law firms and companies should consider the four biggest misconceptions related to using offshore labor.
- The language barrier will cause quality, speed, and communication challenges.
Everyone can relate to the experience of calling a customer service number and immediately recognizing that you have been connected to an overseas call center. When it is difficult to understand what the representative is saying, it can become a frustrating experience for both parties. When working with an LPO, counsel expects a seamless communication experience. With dual shore providers, counsel coordinates directly with their U.S.-based project manager as their dedicated point of contact along with U.S.-based quality control teams throughout the project. Furthermore, the Philippines boasts a population that is 94% fluent in English and is ranked third on the International English Language Testing System, creating a dynamic support staff environment where information is digested quickly and documents are drafted accurately. Even more important, the Philippines is the only Asian country where the majority can “think” in English to a very high degree. This familiarity with the nuances of English language allows Philippine-based resources to more easily identify critical details in a document review over their less fluent counterparts, such as resources in India. The largest barrier in communications—translation, including mental translation—is removed when dealing with dual shore LPOs that have affiliations with the Philippines.
- Cultural differences may affect efficiency, quality, and timeliness.
Beyond the language barrier, the second largest concern is that distinct cultural differences will create communication issues and misunderstandings within the context of a case or assignment. Since one benefit of working with an LPO is that it is a cost-effective and efficient outsourcing solution, some attorneys fear that cultural challenges of working with with a dual shore provider will outweigh the benefits they offer. This is a misconception, however, especially when working with the Philippines. From its origins, the United States has had tremendous influence on the Philippines in terms of its language, education, values, government, and legal system. As the only sizable U.S. colony from 1898 to 1946, this influence remains a large part of the country’s culture today. Not only that, but as the third largest immigrant group to the U.S., over 1.4 million Filipinos have entered the U.S. to date, which is evidence of the fact that there is clear synchronicity in the cultural values between the two countries. The countries’ shared approach to core values – from high standards and diligence to delivering detailed, quality work product – appears to many companies that use dual shore providers today.
- Foreign countries have different legal systems, so resources from those countries won’t have the knowledge to support our needs.
The third most common misconception is that dual shore options may work well for companies that need IT support, but offshore legal services providers lack knowledge about the U.S. legal system, making it difficult for them to provide high-quality legal support. The misconception assumes that there is a barrier between U.S. law and the foreign legal system, which is not always the case, particularly when considering the Philippines. The Philippines Constitution, Bill of Rights, and governmental structures are derived from and modeled on the U.S. system, giving it an analogous framework to that of the United States. Furthermore, the Constitution has the highest legal force in the country, followed by domestic statutes. The laws governing taxation, trade and commerce, labor relations, and governmental operations, as well as the principle of judicial precedent, are all derived from American laws and traditions. In addition, the Philippines has mirror agencies to many U.S. agencies (such as the SEC, FBI, and FDIC), as well as nearly identical laws in areas such as securities regulation, intellectual property, and professional ethics. Without question, the Philippines legal system is based on U.S. law and offers an ideal legal framework for dual shore LPOs.
- Legal training in offshore locations is not up to U.S. standards.
In addition to laws that mirror U.S. laws (as opposed to India’s laws, which are modeled after the U.K.), legal education in the Philippines is similar to the U.S. A four-year undergraduate degree is required prior to attending law school. Then, a four-year JD program is required to sit for the bar. In order to practice law in any capacity in the Philippines, individuals must pass a national bar exam. The Supreme Court of the Philippines administers the exam and the national pass rate hovers at a yearly average between 18%-28%. This passage rate is similar to that of the California State bar and ensures that only the most qualified individuals receive the privilege of being able to practice law.