Lexternalisation

Lexternalisation, a portmanteau of "lex" (law) and "externalisation," refers to the practice of transferring legal functions or services from an in-house legal department to an external provider. This can include outsourcing legal research, document review, contract drafting, compliance management, and other legal services to third-party firms or legal tech platforms.

The primary motivations for lexternalisation are cost savings, access to specialized expertise, and improved efficiency. Companies may choose to outsource legal tasks to reduce overhead costs, free up in-house legal resources for more strategic work, or gain access to cutting-edge technology and global legal expertise.

There are several models of lexternalisation, including:

1. Project-based outsourcing: Legal tasks are completed on a one-time or short-term basis.

2. Managed service: An external provider handles ongoing legal tasks, with the company retaining control over the process.

3. Hybrid model: A combination of in-house and external resources, with tasks allocated based on expertise and capacity.

Lexternalisation can bring significant benefits, such as increased productivity, cost savings, and access to specialized knowledge. However, it also presents challenges, including potential loss of control over legal strategy, data security concerns, and the need for clear service level agreements.

Companies considering lexternalisation should carefully evaluate their legal needs, assess the capabilities of potential providers, and establish clear expectations and metrics for success. Regularly reviewing and updating the lexternalisation strategy is essential to ensure it continues to meet the evolving needs of the business.