Legal Process Outsourcing

The role of LPO in predictive coding

Legal departments and firms, in the past, have tried to keep activities in-house as much as possible to ensure quality, confidentiality, and security. But with the deluge of digital data and the consequent ballooning of costs and effort, they are making a more comprehensive shift to Legal process outsourcing (LPO) – legal support services from a vendor: onshore or offshore. LPO now falls under the umbrella term - alternative legal services provider (ALSP). The ALSP's share of the legal market in 2022 was 20.3 billion dollars. Technology has transformed the business landscape, and the legal sector is no exception. ALSPs are being contracted to minimise costs and for their expertise in leveraging technology. The use of technology can help build a unique legal services value chain in addition to streamlining operational aspects like document management, billing, and financial management. LPO units provide a range of legal research services and drafting of briefs to e-discovery.

E-discovery is the process of acquiring, collecting, analysing, reviewing, and presenting electronically stored information (ESI) for a legal undertaking. It involves uncovering evidence in email, business communications, and other data to be used in litigation or criminal trials and ensuring that only the relevant data is produced. The two significant challenges faced in the e-discovery process have been the variety of data formats and the exponential growth in the data. Businesses now use social media, chat tools, virtual meeting solutions, audio, video, and other data-generating modes of communication. Even more than the variety, the sheer volume of data could seem like an insurmountable hurdle. Adding to the woes is the risk of legal punitive action and financial and reputational repercussions in case of non-compliance. Prior to e-discovery tools being commonly used, every document under consideration in the e-discovery process had to be manually reviewed. Unsurprisingly, the global e-discovery market is expected to grow at a rate of 8.2% and is estimated to grow to 19.51 billion dollars by 2027. AI technologies have supercharged e-discovery solutions to automate the process stages, including the review of documents.

Predictive coding, also known as technology-assisted review (TAR), a machine learning technology, drives the automation of document review. It is used to find responsive documents during the e-discovery review phase. Predictive coding algorithms are trained on a seed set of reviewed and labelled document data. Human reviewers label this set of data. These algorithms learn from human input and classify documents. The more documents that the software reviews, the better its accuracy. TAR solutions help avoid a herculean and exhaustive manual review of the documents and save thousands or millions of dollars in review time by prioritising responsive documents, optimising the review process, and minimising errors. The 'black box' aspect of machine learning technologies might be a barrier to adopting predictive coding. This hurdle can be overcome by using transparent, 'white box' solutions that provide the reasoning behind AI decisions.

In 2022 in the US, around 69% of large and mid-sized law firms used ALSPs for e-discovery purposes, and it was the most outsourced service. With the efficiency and improved cybersecurity brought in by AI technologies, the legal sector is eager to jump onto the tech bandwagon. Many law firms need access to the latest predictive coding technology. Due to the enormous volumes, predictive coding is a must-have, as increasing capacity corresponding to the ESI volume is not feasible. ALSPs bring in the automation solutions and the expertise to use them optimally, therefore, their efficiency and accuracy comes at a lesser cost than other options. Besides the cost, quality, and time benefits, LPO for predictive coding allows legal departments and firms to avoid the administrative hassle and risk of hiring and onboarding temporary staff to deal with litigations where ESI volume is higher than average. TAR using ALSPs helps lawyers evaluate the case's potential, draw up the strategy earlier, gain vital tactical advantages, and stay competitive. Law firms must stay abreast of the latest technology to hold their own.

The risks often highlighted regarding LPO are security and confidentiality. ALSPs reassure their clients by implementing worldwide accredited processes and certifications like ISO 9001 and ISO27001. It is imperative to draw up stringent SLAs to ensure quality and to provide specialised training to staff whenever necessary. Partnering with trustworthy ALSPs in predictive coding and other cutting-edge solutions gives law firms an edge and allows them to be primed for the opposing counsel, if not a step ahead. 

* For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.

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