Legal process outsourcing (LPO) is ‘here to stay’ and attracting interest from investors, a leading practitioner claimed last week.

Mark Lewis, head of outsourcing at City firm Berwin Leighton Paisner, said there are ‘a number of private equity providers knocking around the City offering quite a lot of money to get into LPO’.

Though the UK and Europe have been slower than the US to embrace LPO, Lewis told the 360 Legal Group annual conference in London that the need to cut costs and the ‘gradual realisation that many legal services or parts of legal processes are commoditised’ will push take-up.

Managing director of the 360 Group Viv Williams (pictured) urged firms to think carefully about the opportunities different outsourcing models could offer. It need not mean sending work abroad, he said – a firm could, for example, cream off the most profitable 20% of its property workload and then send the rest to a licensed conveyancer in return for referral fees.

Lewis also talked about his experience as co-founder of the law firm associated with accountancy firm Coopers & Lybrand in the late 1990s, when the major accountants attempted to break into legal practice. A lesson to those who are looking at the legal market now, he said, the mistake the accountants made was to think they could build a legal practice, rather than buy one. It was a ‘costly failure’.

Meanwhile Steve Billot, a director of accountants BDO, warned delegates that history shows more businesses fail in the recovery period after a recession than on the way down. This is because of new competition entering the market unburdened by damage done by the recession and existing firms having no working capital. ‘Professional practices fail for lack of cash, not profit,’ he said, adding that lawyers do not always understand the difference.