The rise of legal process outsourcing (LPO) may have a significant impact on the numbers of junior lawyers in the UK, says one LPO specialist, and 2008 will be the tipping point.

Although LPO is in its infancy with a total industry population of perhaps 7,500 people, many legal functions. such as document drafting, analytics, and research are now being unbundled, commoditised and outsourced to India, along with locations such as South Africa and the Philippines. This will undoubtedly have an impact on the lives of people studying law in the UK, says Mark Ross, director of LPO specialist LawScribe.

Ross believes (unsurprisingly) that deregulation within legal services presents a great opportunity for the Indian market – from where the English lawyer's Los Angeles-based company draws its pool of talent.

One of the reasons for the law being one of the last industries to use offshore services is that large legal practices traditionally make money by “leveraging out their junior associates”, he says. However, now that the Indian legal sector is being liberalised and opened up to foreign law firms, all that is set to change.

In India, 70.000 lawyers qualify annually – that's double the number within the UK – and the economics of labour arbitrage within a traditionally expensive sector (especially in a downturn) will become attractive for many types of company. Fixed costs are are boon for any organisation grappling with its balance sheet, and LPO certainly promises more predictable pricing – on the surface at least.

However, the very nature of offshoring legal operations surely carries with it a whole range of additional elements, such as time, language, culture and distance (none of which have an obvious field in a spreadsheet), and that's not even to mention currency fluctuations.

Nevertheless, the UK may be the key. The US legal system is “hooked on the hourly rate”, says Ross, whereas the UK is more flexible, with fixed quotes becoming commonplace. That means that UK firms are more likely to look for ways of improving their margin.

BPO organisations are already declaring their intention to join the large accounting firms in dipping their toes into the LPO market, and India is set to be the major player. Infosys and Wipro are commencing LPO operations, and evidence is emerging of consolidation among pureplay LPO practices.

Now it is possible for law firms to be publicly listed and their stocks traded, shareholder value and a private equity mentality come into play, and that inevitably means downward pressure on costs.

2008 will be “a tipping point year”, says Ross as higher value work begins to move offshore. Soon, he claims, it will be attractive for law firms to acknowledge offshore work in their client portfolios, and this, in turn, will become part of a client's reasonable expectation.

Of course, the barriers are significant: the law is a nuanced, subtle and culturally charged sector, and local knowledge is at a premium – especially in the US, where state and federal laws are complex and sometimes contradictory.

Those 70.000 lawyers qualifying in India each year may have a good grounding in common law, but applying those skills in terms of local knowledge is a major challenge. Protectionism is rife, particularly in the US, and there are inevitably issues surrounding data confidentiality and regulation.

However, Ross counters that the huge scale of litigation in the US – you could fit the value of the rest of the world's legal market several times into that of the US – means that firms are looking further afield than the proverbial 'lawyer in the basement'.

Industry self regulation will emerge, says Ross, and companies are beginning to offer in-house training and qualifications for Indian lawyers training in the UK.

The closer cultural fit with India means that the LPO market may find its most fertile ground in this country – assuming of course, that deregulation doesn't see the rise of 'Tesco Law' before offshore providers get a look in.