Tuesday, November 30, 2010

Fronterion Forefront Newsletter

I wanted to thank everyone for your interest in the launch of our Fronterion Forefront monthly e-newsletter. Our inaugural launch this past month received quite a positive response.

The second edition of our monthly newsletter is coming out this week covering the wave of M&A activity in the LPO market, announcements by the ABA as well as the Global LPO Conference just held in Delhi. It’s shaping up to be an interesting month for LPO, to say the least.

If you have trouble viewing or receiving the newsletter feel free to drop us a line at forefront@fronterion.com. Likewise, if you have any thoughts, comments or contributions, we would love to hear from you.

Monday, November 29, 2010

ABA Draft Ethical Amendments Release

Perhaps the most influential announcement on the topic of LPO made by the ABA following the 08-451 Formal Opinion publication in August 2008, the Commission recently proposed minor changes to existing ethical guidance.

The ABA 20/20 Commission recommends modifications to the commentary of the Model Rules 1.1, 5.3 and 5.5.

Basically, this is what we expected, but it does provide some additional clarity about the Commission’s outlook going forward.

These proposed amendments are to be debated over the next 6 to 8 months with a possible final presentation to the ABA House of Delegates during the annual meetings in August 2011.

More details on the announcement are available here

For more background information on the announcement and the ABA 20/20 Commission check out Fronterion’s LPO Ethics Resource Center.

Friday, November 26, 2010

Reducing Legal Costs

While it may not help you reduce your additional girth from that extra large serving of Thanksgiving turkey covered with mashed potatoes and gravy, this conference will help you trim your legal spend.

ALM is hosting their second annual Controlling Legal Costs conference in New York this December 8th-9th.

I will be moderating a panel on LPO featuring prominent legal counsel from Abbott and CA. Some of the discussion points for the panel include:

1) What are the value-adds and considerations for general counsel when outsourcing and offshoring? Many legal professionals assume that all “outsourcing” is performed offshore and that the only value provided by LPO vendors is low cost labor. What is the value of a “managed review process,” technology integration and expanded capabilities. What is the purchasing decision process of general counsel on the panel. How did they make their decision to outsource on or offshore? What value were they seeking from their LPO engagement and what were they seeking to avoid?

2) What are the trends for LPO and the specific approaches by GC’s in the coming year? Where do the panelists see their work with outsourcing trending in the coming year? What are the panelists' thoughts on industry trends, GC’s LPO strategies and ethics/regulatory changes.

I believe there is still some room at the conference. Contact the organizers if you’re in the area and interested in attending. Additional details available here.

Industry Survey

I just wanted to make a quick post about an industry survey currently being conducted by Ravi Shankar, a law student at Harvard University.

The survey looks quite thorough and the findings should be interesting.

Ravi asked me to circulate the news that he is currently seeking respondents from LPO vendor firms. He has graciously agreed to share his findings with all participants when survey data is released in December.

To request a survey, contact Ravi at: rshankar@jd10.law.harvard.edu

Thursday, November 25, 2010

News and More News Round Up

This has been quite a week for LPO, from the Pange3-Thompson Reuters deal to the ABA’s release of draft commentary for the Model Rules. Now the Brits want a place in the LPO limelight.

What better way to recapture the world’s attention than to have two UK top firms – CMS Cameron McKenna and Herbert Smith – to make back-to-back announcements?

On Tuesday, CMS Cameron McKenna partners voted in favor of perhaps the most transformational outsourcing initiative by any major law firm. Ever. Hats off to the Camerons team who were in charge of the internal partner (aka cat herding) after some initial skepticism.

Not to be outdone, Herbert Smith “nailed the news agenda in the face” by announcing the launch of a captive document review center in Northern Ireland. The center is set to open with approximately 20 personnel, but Herbert Smith seems to have ambitious plans to expansively scale their Northern Ireland capacity.

The Lawyer reports, “Given that surveys of clients regularly find that they prefer a) paying less for work, as opposed to b) paying more for work, the venture should be a success.”

The importance of an onshore option is something we’ve recognized for quite some time. It’s great to see firms validating the onshore model both Stateside and now in the UK with Herbert Smith.

Apparently after all of the hard work during the last couple of months, firms are ready to get things off their drawing boards to have something to celebrate this holiday season. Who knows what else will happen in the LPO industry before the start of the New Year...

Sunday, November 21, 2010

Industry Consolidation: Part Deux

As I am writing from India, we are riding high on the wave of industry consolidation that continues with the announcement of the acquisition of prominent LPO vendor Pangea3 by Thompson Reuters. No figures on the transaction were released, but speculation pegs the deal around $35-40 million. Not only is it a great step forward for Pangea3, it also signals a weighty validation for the entire legal process outsourcing industry.

This Thompson Reuters-Pangea3 deal follows the recent acquisition of LawScribe by UnitedLex.

The wave of consolidation can be seen as a result of recent trends in the industry: the need for scalability, global delivery capabilities and strong financial backing for requisite investments to drive growth. Pangea3 is reportedly already seeking expanded global delivery opportunities in the US through Thompson Reuters. Additional details here.

Consolidation and growth in onshore delivery is a pattern we’ve been predicting since our annual trending report nearly a year ago. The movement toward larger, more capitalized and truly global LPO vendors reflects the continuing maturation in the industry.

Sanjay , Co-CEO of Pangea3 provides some additional perspective on the transaction in an exclusive Legally India report. Details here.

On a personal note, by coincidence I was visiting the Mumbai Pangea3 headquarters the day of the announcement. Needless to say, it was a lighthearted day in the office.

Wednesday, November 17, 2010

Global LPO Conference II

Day Two: Sunday November 14, 2010
Day two of the Global LPO Conference kicked off with a much anticipated panel featuring Lalit Bhasin and Mark Ross of Integreon (the only LPO named in the Writ Petition).

Bhasin started his address by acknowledging that the liberalization of the Indian legal profession was, “critical and controversial.” The primary thrust of his address was that domestic Indian law firms need to be offered a “level playing field” by liberalizing the legal profession (such as lifting restrictions on law firm adverting) in order to effectively compete with large, sophisticated international clients. Until these restrictions are lifted, foreign lawyers have no right to practice,“from the soil of this country.” International law firms need to ensure they are, “staying on the right side of the law.”

As optimistic as one may be about the resolution of the Writ, one should keep in mind that a similar case filed in Mumbai in 1997 was not effectively resolved until 2009.

Ross provided a presentation on the ethics of legal outsourcing. Mark Wyatt, founder of The Lawyer, LegalWeek and the European Lawyer provided an entertaining perspective on the importance of media plays in the creation of transparency in the legal profession.

The most interesting part of the panel session was the question and answer session which followed. Bhasin defended his views on the closed state of the Indian legal profession. Further discussion ensued. One standout comment was made by Ganesh Natarajan, industry veteran CEO of Mindcrest, He said, we [LPO industry] are like “Moses parting the Red Sea” meaning that everyone in the industry is pulling in the same direction, but it takes time to accomplish the goals.

A number of additional speakers addressed a many different issues concerning the LPO industry, more than I possibly have room for, at this point.

More details in the upcoming November issue of our Fronterion Forefront newsletter. To sign-up for the newsletter, email forefront@fronterion.com

Monday, November 15, 2010

Global LPO Conference

This weekend I had the pleasure of attending and speaking at the second Global LPO Conference in Delhi, India. The conference was a unique experience with a diverse collection of LPO industry participants and speakers.

Day One: Saturday November 13, 2010
The conference kicked off with a panel of LPO executives from Pangea3, Bhodi Global, Mindcrest and Integreon. Highlights included Mark Ross, representing Integreon,stating that the conversation with law firms has changed from “why LPO to how.” Sanjay Kamlani, representing Pangea3, noted that since clients have now seen LPO work and have proven it’s an effective concept, new adaptors are more likely to start working with LPOs in a much bigger way. Kamlani went on to state that he was “seeing growth that is different than in the past years.”

Another panel featured Abhi Shah of Clutch, and Nigel Kissack of Pinsent Masons. Abhi extolled the need for LPO vendors with global reach to use a global delivery platform. Kissack shared his experiences establishing a captive document review service in South Africa. Kissack jokingly acknowledged that he, “invented the LPO, but had no idea that the industry had already existed.”

Following lunch, the highlight of the entire two-day event was a panel discussion featuring Alison Hook of the Law Society, Sakth Venkataraman of Cobra and me.

Hook started off by providing an update on the professional bodies who are shaping the ethical and regulatory guidelines regarding LPO. Hook urged delegates to engage with governments and bar counsels about LPO to create better understanding of the LPO industry by those who are regulating the legal profession.

I followed with a session discussion of how selling LPO services to law firms is, “one of the most unique things you have even done.”

The day concluded with a final session lead by Richard Reade of ISS and Antony Alex of Pangea3. Reade provided insightful and entertaining commentary about his work with an Indian-based LPO provider. Reade concluded by urging LPOs to deliver on quality and deadlines so he would not be “spanked” by the members of his board.

Such ended the first day of the conference which was followed by a gala dinner for delegates. More details on day two of the conference to follow…

Sunday, November 14, 2010

News Round-Up

Check out these interesting bits of LPO news from this past week.

Following Obama’s visit to India, the debate about India’s stance on opening its legal system to international law firms continues to simmer. Opponents and supporters from both sides of the ocean are making their opinions known. One person speaking out was Lalit Bhasin, the President of Society of Indian Law Firms, who is seen as a leading supporter of the legal action against 31 international law firms (and one LPO) known as the Madras High Court Writ Petition.

At the Global LPO Conference held on the 14th, Bhasin raised some excellent points about the current stringent regulatory requirements. Indian law firms are not permitted to market their services and don’t even have the ability to even set up a basic website, he said. Indian law firms would be crippled if faced with sophisticated international competition.

Many Westerners, including ABA president Stephen Zak, find the lack of reciprocity frustrating, particularly for a country built on a platform of servicing international clients. Additional details here.

I had the pleasure of visiting with Bhasin this weekend at the Global LPO conference in Delhi. More details to come.

UnitedLex Acquisition
Perhaps the first in a trend of consolidations, UnitedLex announced their acquisition of fellow Gurgaon-based LPO vendor, LawScribe.

I spoke with former LawScribe CEO, Kanoor Chopra, recently following the announcement. Chopra was very positive about the acquisition and is looking forward to being part of the UnitedLex team. Additional details here.

Lawyers Demise?
Another alarmist article appeared this week in the Guardian about lawyers and LPO. As previously stated in an earlier post, the legal profession is in not in any danger of disappearing due to the adoption of alternative delivery methods – including, but not limited to LPO. That said, the ABA Journal reported this week that AmLaw firms cut approximately 1400 positions in this past year. Challenges still lie ahead as many major law firms struggle to address the new normal – a sluggish economy, lower levels of legal spend and increasing competitive pressure. But often pruning makes an organization, and profession, stronger.

A Collaborative Model of LPO: An Academic Perspective
I haven’t had a chance to read through the entire paper, but this does look interesting. Cassandra also scores points with us by referencing Fronterion research in the paper.

Make Vs. Buy: Allocation of work in-house
An ancillary trend to the LPO industry is the divergence in strategies by general counsels’ allocation of work. Some in-house legal teams are seeking to pull the majority of work internally, while others are seeking to use outside legal counsel exclusively. An interesting analysis of legal work allocation was covered in a recent piece featuring Robin Saphra at Colt. Read the full article here.

Monday, November 1, 2010

Conference Here, Conference There

Get out your passports, cash in your frequent flier miles and join some of the leading figures in LPO from law firms and corporates.

The Conference There:
I have the pleasure of speaking at the inaugural Global LPO Conference in Nodia, India November 13th-14th.

I will be speaking on how vendors can tailor their approach to law firms whereby engaging firms’ expectations and developing compelling differentiators. As a sneak preview, the points I’ll be hitting include:
• How selling to law firms is different than anything that you’ve ever done before
• The top 5 barriers and misconceptions to overcome
• The 6 primary areas law firm clients really key on
• How the dynamic changes in the LPO market impact how you sell and what you can do going forward

The Conference Here:
I will also have the privilege to speak on a panel at the upcoming Controlling Legal Costs conference in New York City December 8th-9th.

The panel will feature several prominent general counsel detailing their work with LPO, either directly or through their respective law firms. More information is available here. Additional details are coming shortly.

Both conferences look to be very engaging – and both have my recommendation. Conferences are typically a great way to keep your finger on the pulse of the industry. Hope to see you out and about, either here or there…