Q&A: Caribbean Sets Sights on Becoming Legal Process Outsourcing Hub

Julia Taggart of Innovate LSO in Barbados believes that the nation has a unique value proposition in an LPO market that many Caribbean countries are hoping to capture.

legal process outsourcing

Legal expertise is probably not the first thing that springs to mind when you think of Barbados, a small island nation best known for its white sandy beaches, welcoming people, and beautiful climate. But the 295-square-mile island is hoping to change that.

Legal process outsourcing (LPO) is a growth area across the world, with research firms estimating that it will grow by nearly 30% per year. Barbados and other Caribbean countries have put their hats in the ring to try to secure a piece of the LPO pie with varying degrees of success, but can they compete in a growing market?

Julia Taggart legal process outsourcing
Julia Taggart of Innovate LSO says that “there are well-established companies providing BPO and KPO solutions in the region.”

Nearshore Americas spoke to Julia Taggart, CEO and co-founder of Barbados-based Innovate LSO, about the state of legal process outsourcing, how Barbados and the rest of the Caribbean region are tackling LPO, and how they expect the sector to develop.

The company, which was established in 2013, has been providing LPO services in the region to clients in North America, the United Kingdom, and Hong Kong.

Nearshore Americas: Legal process outsourcing is still relatively young in outsourcing terms, yet interest seems to be growing. How would you characterize the state of LPO globally? What are the core trends that are driving LPO adoption?

Julia Taggart: Legal process outsourcing has been an incredibly successful phenomenon throughout North America and the UK. Interest in LPO is certainly not waning. According to Grand View Research, it is expected to be a market worth $8.6 billion by 2020, yet it is still fairly new compared to other outsourcing sectors.

Labor arbitrage was the key phrase when the term LPO was first coined. Whilst it is true that clients will always try to find ways to reduce costs, it is now also imperative to find innovative ways of working to improve service standards. We now have alternative business structures out of the UK and a myriad of companies providing legal advisory and LPO services without the fee-draining partnership model. We believe these structures will continue to evolve, and as they do this will encourage a move towards nearshore support solutions, which will not only be able to deal with the volume for transactions in the same time zone but also provide strategic advice.

What is trending in the LPO field is similar to other outsourcing practices: ways of improving service standards and the continued review and adoption of new technologies. Litigation is up 200% in North America, and there is a continuing and developing need for IP portfolio management. These are just two examples new business being driven to LPO service providers.

Billing, time, and document management solutions, and e-discovery for litigation have been available for many years. These are constantly being enhanced by service providers, and there is a keen focus on acceptable levels of automation for legal work. There are still some who say such automation will never work for complex legal matters. I believe we must keep an open mind and explore the opportunities available to assist us to work more diligently and effectively alongside technology.

Nearshore Americas: How does the Caribbean, and in particular Barbados, fit into this? What other countries in the Caribbean are Barbados competing with in legal process outsourcing?

Julia Taggart: There is a significant worldwide focus on the knowledge process outsourcing (KPO) suite of services, which includes LPO. Whilst the Caribbean may be a new player in the LPO market, there are well-established companies providing BPO and KPO solutions in the region. Jamaica is a committed player in the BPO sector with 17,000 employed, and established companies, including Xerox and Vistaprint, host captive centers on the island. This bodes well for the other English-speaking islands. It proves that the Caribbean is a capable and strong competitor in the outsourcing world.

For LPO, Barbados has a unique value proposition: it is a nearshore English-speaking country and a common law jurisdiction with exceptional education standards. Added to this, Barbados has strong telecoms and technological infrastructure, and it is a mature and well-regulated jurisdiction with political and social stability. Our employees are culturally aligned with our North American clients, and we are able to deliver exceptional services together with the provision of strategic business advice because we understand the market. Our key advantage is intellectual arbitrage.

The Barbados government is keen to explore and support the export of professional services. Senator Darcy Boyce, Barbados’ minister in the office of the prime minister, recently stated that the government was “particularly interested in attracting business outsourcing from international legal firms.” He added that, “Barbados would want to position itself as a regional hub, possibly in partnership with Trinidad, to build the numbers needed to service international jurisdictions.” We therefore do not see other islands as competitors. We see an opportunity to collaborate with the talent and resources to build strength in the region.

Nearshore Americas: What kinds of clients are looking to the Caribbean for LPO? How do you see LPO demand evolving in the future?

Julia Taggart: LPO solutions really benefit all sectors, including banking, insurance, healthcare, and oil and gas. After all, who would not benefit from reduced legal costs and enhanced service delivery? We are also keen to work with an international law firm to build a captive center in the Caribbean and have initiated discussions on this. We wait to see what the future may bring.

The international business sector in Barbados has been providing services to North America since the 1960s, and the country is host to North American subsidiaries managed, staffed, and operated by Barbados employees. This international business sector has provided opportunities that cross over into the KPO and LPO fields, as the sector is renowned for its familiarity with and experience of the mind and management concept. Innovate LSO is providing some of our clients with international business services (corporate governance), strategic business advice and LPO solutions (e.g., IP portfolio management, and contract review and management services). We are also providing captive business solutions using a build, support, and manage model.

Nearshore Americas: How is the capacity for LPO being developed in the region? 

Julia Taggart: The Barbados, Jamaica and Trinidad governments have all seen the potential for LPO in the region. In a sector set to grow at a CAGR of 29.6% from 2014 to 2020, the region benefits from its ability to leverage and build on its existing capabilities. Innovate LSO has had in-depth discussions with the Barbados government to determine how to grow and propel the knowledge pipeline for this burgeoning industry, and we are pleased to say that some of our recommendations are already bearing fruit.

Capacity comes in different forms for LPO and includes intellectual and structural capacity. Intellectually, LPO (and KPO) assists with the avoidance of brain drain in the region, the ability to offer employment to some of the 2,000 students who graduate each year from the University of the West Indies is a benefit to the region as well as to the clients. Structurally, we are seeing a bolstering of ISO standards, data security and confidentiality with the newly rebranded telecommunications companies in the region.

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Nearshore Americas: What are the core challenges for the region in terms of developing its appeal as an legal process outsourcing center?

Julia Taggart: Awareness and branding are the keys for recognition. We have the typical challenges of growing/expanding a new market. Barbados has an advantage due to its international business sector’s strength in North America as many law firms have worked with lawyers and the big four accountancy firms in the country. We also have to continuously evaluate our costs to ensure that we remain competitive and provide value-added benefits.

Nearshore Americas: What needs to be done to make the Caribbean the go-to hub for LPO?

Julia Taggart: Given the projected growth of LPO by 2020, there is a need for more service-provider capacity in the market. We believe that the Caribbean can provide a nearshore solution with the commitment from governments in the region to make it a LPO hub. We would need to collaborate on educational standards, and each government would need to look to its own regulatory framework to determine whether they can provide what is needed from a tax incentive basis and legislation.

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