Allen & Overy (A&O) has agreed to outsource its legal work to Mumbai and New York with legal process outsourcing (LPO) company Integreon, becoming the first magic circle firm to embrace the LPO model, according to The Lawyer magazine.

The Lawyer reported that the firm has partnered with LPO provider Integreon to outsource basic litigation document review to teams in New York and Mumbai, in what could generate a 30-50 per cent cost saving.

A&O litigation support specialist Vince Neicho said: "We put together a suite of options [for clients] including offshore outsourcing, a reduced paralegal rate in our London office and the [improved] use of technology."

A&O has chosen to work with Integreon on a case-by-case basis, rather than signing a deal for a dedicated team.

Neicho explained to The Lawyer: "The main reason is the fluctuation in the workload, we might go a few weeks with nothing at all, or a client might opt for another of our suite of options. Outsourcing offshore is new in this country, we’ve some clients that may feel uncomfortable with it. If we put our own captive team together and push outsourcing it’s not good for them or for us."

This is the first time that a magic circle firm has outsourced legal work. Rivals Clifford Chance and Linklaters have both outsourced support functions, while Clifford Chance has a wholly-owned Indian subsidiary that carries out document review work and other legal support tasks previously undertaken by onshore paralegals and trainees.

A&O has a formal best friends relationship with Trilegal.

Neicho's comments were made at The Lawyer's inaugural conference on Legal Process Outsourcing and Offshoring and come as more law firms chose to outsource lower-value work in a response to requests from clients to bring down costs.

UK firm Simmons & Simmons also signed up with Integreon last month to outsource legal work to Mumbai.

Managing attorney at mining giant Rio Tinto Leah Cooper took the radical move earlier this year of outsourcing legal work to a team of 15 Indian-based lawyers sourced by LPO CPA Global. No in-house jobs have been lost as a result but, with less work going out to panel firms, it is estimated to have saved the company around $8m (£4.8m).

Earlier this year The Lawyer revealed that Pinsent Masons had become the first firm to outsource work normally done by UK-based lawyers to a dedicated offshore team through a deal with LPO company Exigent (22 June 2009). The firm now plans to expand this further (28 September 2009).

Last month Clarke Willmott laumched an LPO pilot in its Birmingham office with the aim of rolling it out across its UK network (12 October 2009).

The trend towards LPO and offshoring has gathered such momentum that even one of the City’s more traditional names - Slaughter and May - has been in talks over outsourcing legal work. This is believed to have been triggered by a request from a particular client (5 October 2009).

This is an edited version of an article that first appeared on TheLawyer.com