Today we’re releasing our annual trending report on the legal outsourcing industry - Ten for 2011: Top 10 Trends in Legal Outsourcing in 2011.
The report was featured by the ABA Journal - Legal Outsourcing Consultant Predicts More Onshoring - which highlighted both the onshore developments as well as greater transparency by major US firms.
Today's Fronterion Forefront newsletter features our assessment on our predictions from last year. To sign up for the newsletter email: forefront@fronterion.com
Ten for 2011 Release Details
Fronterion, the leading international consulting firm for outsourced legal services, today has released its second annual report outlining the prospects for the legal process outsourcing (LPO) industry in the coming year.
Following a breakthrough year for LPO in 2010, the Fronterion Ten for 2011: Top 10 Trends in Legal Outsourcing for 2011 reveals the most important trends in legal outsourcing for the next 12 months.
A significant prediction for 2011 is a rise in the use of onshore LPO providers, those who deliver services from low-cost domestic locations in the United States and Europe. Attracted by significant savings in such locations, combined with the benefits of servicing clients within the same time zone, law firms and LPO vendors will continue to invest in onshore services alongside traditional overseas options.
Next year also looks to be the year that local regulators and trade bodies definitively respond to the way outsourcing is changing legal services across the globe. There are significant ethical and regulatory issues attached to legal outsourcing. For example, how do firms demonstrate adequate supervision when work is performed by an LPO vendor? Who is liable for the work done by LPO lawyers? And, how much should law firms charge their clients for work done by LPO providers on their behalf?
The American Bar Association is currently consulting with its professional members concerning changes to its draft rules, while the United Kingdom’s Solicitor’s Regulation Authority is considering a major of review of LPO in response to the growing number of firms sending legal work to outside providers.
Another key trend is greater transparency. The first major US firm will go public with its LPO arrangements next year, something those in the US legal industry have been unwilling to do until now. The increasing application of technology, which allows LPO providers and law firms to work together more closely, will be another growing trend in 2011.
More consolidation is likely, following the example of Thomson Reuters who acquired Pangea3 last month in the largest deal ever seen in the legal outsourcing market.
Using its unrivalled access to LPO firms and their clients, Fronterion again set out its predictions for 2011. Fronterion managing principal Michael Bell said: “This year, we’ve seen many of our 2010 predictions unfold in the industry. For example, we projected LPO would become an increasingly valid career path for young lawyers. Both in low-cost jurisdictions and in parts of the US and Europe, LPO firms have been ramping up their operations to meet increased demand, and at a time when traditional law firms jobs have been harder to find.”
“We see 2011 as a pivotal year for legal outsourcing as it continues to develop from a niche practice to a truly global industry.”
Fronterion’s Top 10 for 2011 are:
1) A Fundamentally Changing Legal Profession. Continued downward pressure on costs and the globalisation of legal services provide a perfect environment for LPO. Those who refuse to engage with LPO will increasingly become a minority - the industry can no longer be ignored.
2) Enterprise Approach. Many firms already outsource legal work at partner or department levels. However, LPO is more effective and efficient when a firm implements a firm-wide or ‘enterprise’ approach, led by senior management.
3) Onshore Expansion. The growth in onshore and hybrid on-offshore delivery solutions will begin in earnest in 2011. This trend will be equally prevalent in the United States and United Kingdom, with LPO providers and firms already building capacity.
4) Expanding Client Geographic/Jurisdictional Reach. Demand for LPO services will spread to new markets. In the US, law firms in Texas, the Midwest and the Pacific Northwest are potential growth markets for LPO. In the UK, regions outside of London are also emerging growth markets. However, continental Europe will remain a challenging environment for LPO.
5) Progressive Value Proposition. LPO providers will have to offer more services and a more progressive value proposition to remain competitive. Alongside traditional litigation support, LPO vendors may also have to offer contract portfolio servicing, compliance, diligence, human resources, medical and broader legal support functions.
6) Increasing Technology Applications. As a result of the growing importance of technology, LPO vendors will use technology as a key selling point. Technology platforms will be used to offer diversified services and as a means for vendors to further embed themselves in client organizations.
7) Dynamic Vendor Landscape. The unprecedented growth and industry consolidation initiated in the fourth quarter of 2010 will continue to shape the dynamic LPO vendor landscape in the coming year. Overall, these consolidation trends are positive for the industry as vendors emerge stronger, more capitalized and, most likely, considerably larger.
8) Public Acknowledgement. The growing acceptance and adoption of onshore and offshore LPO will become more visible in the coming year. This will become increasing prevalent in the US, where in past five to six years, corporations and law firms have remained virtually silent on all LPO related matters.
9) Divergent Vendor Approach. Competition means that LPO vendors will have to differentiate themselves from each other in terms of services offered and delivery models. No dominant model exists (yet) and a range of different approaches will emerge next year.
10) Ethical Guidance. Regulatory bodies start to address the changing legal landscape. In the US, ethical commentary is expected from the ABA’s Commission on Ethics 2020. In the UK, announcements are expected from the SRA and the Law Society. Other jurisdictions that have been silent so far may follow suit, such as Australia, Canada, and South Africa.
For the full Fronterion Top 10 for 2011 report visit www.fronterion.com/tenfor2011/
Showing posts with label American Bar Association. Show all posts
Showing posts with label American Bar Association. Show all posts
Wednesday, December 15, 2010
Friday, August 6, 2010
Friday, August 6, 2010 ABA Commission on Ethics: Day 2 and Public Hearing
Today has been the second day of meetings for ABA Commission on Ethics 20/20.
The event of most interest to me was the public hearing concerning the legal outsourcing industry. Michael Ford of UnitedLex and Mark Ross of Integreon, two thought leaders in the legal outsourcing industry, spoke.
I commend the Commission for soliciting outside perspectives as they shape their recommendations for their members concerning the ethical implications of outsourcing. The Commission made an important distinction between outsourcing and offshoring, which is key in all discussions about LPO.
The extent to which law can be practiced reciprocally between international jurisdictions drew quite a bit of discussion. India was the main focus. The issue is examined further in a recent Economist article.
I was glad I attended this year’s meeting. It was encouraging that the ABA, and more legal firms and educational institutions as well, are recognizing and discussing seriously the role of legal outsourcing as part of the ever-changing legal profession.
The event of most interest to me was the public hearing concerning the legal outsourcing industry. Michael Ford of UnitedLex and Mark Ross of Integreon, two thought leaders in the legal outsourcing industry, spoke.
I commend the Commission for soliciting outside perspectives as they shape their recommendations for their members concerning the ethical implications of outsourcing. The Commission made an important distinction between outsourcing and offshoring, which is key in all discussions about LPO.
The extent to which law can be practiced reciprocally between international jurisdictions drew quite a bit of discussion. India was the main focus. The issue is examined further in a recent Economist article.
I was glad I attended this year’s meeting. It was encouraging that the ABA, and more legal firms and educational institutions as well, are recognizing and discussing seriously the role of legal outsourcing as part of the ever-changing legal profession.
Thursday, August 5, 2010
Thursday, August 5, 2010 ABA Commission on Ethics: Day 1
The ABA annual meetings are being held at the Palace Hotel in downtown San Francisco today and tomorrow. (And, yes, I have escaped hot, humid Chicago for a cooler climate for a few days.)
Today’s proceedings commenced at 9:00 am with introductory remarks given by the Commission chairs, followed by updates from the heads of various working groups. Short speeches were also given by outgoing president Carolyn Lamm and incoming president Stephen Zack.
When reports touched on outsourcing, the Commission leadership recognized that it is a “complex topic” – something we’ve understood since Fronterion was founded.
Discussions included the ethical obligations law firms face when they work with outside vendors, especially, the relationship dynamics in a tri-party engagement when law firms, their clients and outside vendors collaborate.
Relating to legal process outsourcing, the Commission discussed different approaches to the current rules model and the implications of each of those various approaches.
A list of the prominent members of the he ABA Commission on Ethics 20/20 in available here. I anticipate that this week’s – and future – dialogs on LPO by the Commission will be fruitful because capable people are working hard to create more understanding of ethical challenges of outsourced legal services domestically and abroad.
More on the meetings tomorrow.
Today’s proceedings commenced at 9:00 am with introductory remarks given by the Commission chairs, followed by updates from the heads of various working groups. Short speeches were also given by outgoing president Carolyn Lamm and incoming president Stephen Zack.
When reports touched on outsourcing, the Commission leadership recognized that it is a “complex topic” – something we’ve understood since Fronterion was founded.
Discussions included the ethical obligations law firms face when they work with outside vendors, especially, the relationship dynamics in a tri-party engagement when law firms, their clients and outside vendors collaborate.
Relating to legal process outsourcing, the Commission discussed different approaches to the current rules model and the implications of each of those various approaches.
A list of the prominent members of the he ABA Commission on Ethics 20/20 in available here. I anticipate that this week’s – and future – dialogs on LPO by the Commission will be fruitful because capable people are working hard to create more understanding of ethical challenges of outsourced legal services domestically and abroad.
More on the meetings tomorrow.
Monday, August 2, 2010
ABA Annual Meetings: LPO Ethics
The American Bar Association (ABA) is holding its annual meeting this week in San Fransciso. The main focus for my visit will be the ABA’s Commission on Ethics 20/20 with sessions that will include public hearings on several topics of interest, specifically ethical considerations of legal outsourcing.
I am looking forward to attending the meetings to survey the lay of the land, according to the Commission and its members.
The more we at Fronterion are aware of the concerns of the ABA, the 20/20 Commission, it’s lawyers and their clients, the better off we will be as we advise our clients on all outsourcing ethical issues.
An added plus – I will be able to get away from the hot and humid weather that engulfs Chicago in August!
I am looking forward to attending the meetings to survey the lay of the land, according to the Commission and its members.
The more we at Fronterion are aware of the concerns of the ABA, the 20/20 Commission, it’s lawyers and their clients, the better off we will be as we advise our clients on all outsourcing ethical issues.
An added plus – I will be able to get away from the hot and humid weather that engulfs Chicago in August!
Monday, December 14, 2009
Ten For 2010: Trending Projections Recognition by the American Bar Association
The Ten For 2010: Top Ten Trends in Legal Outsourcing released last week was recently picked up by the ABA Journal and was one of the top 10 most read articles for the week.
What seems to have caught the interest of many US legal professionals is the idea of the increasingly attractive career path for outsourced legal services. Global-minded and entrepreneurial legal professionals are finding the legal outsourcing sector an attractive alternative to the big law lifestyle. This is not a major portion of the legal workforce, but it is an emerging demographic that we see growing further in the coming year.
An interesting dialogue was also started on the message board below the article. While we do not find that all issues raised in the discussion are of merit, they are still issues and opinions that need to be addressed when engaging in outsourced legal solutions. Some posts to check out include: 21, 22, 27, 36 and 37.
What seems to have caught the interest of many US legal professionals is the idea of the increasingly attractive career path for outsourced legal services. Global-minded and entrepreneurial legal professionals are finding the legal outsourcing sector an attractive alternative to the big law lifestyle. This is not a major portion of the legal workforce, but it is an emerging demographic that we see growing further in the coming year.
An interesting dialogue was also started on the message board below the article. While we do not find that all issues raised in the discussion are of merit, they are still issues and opinions that need to be addressed when engaging in outsourced legal solutions. Some posts to check out include: 21, 22, 27, 36 and 37.
Friday, October 16, 2009
Legal Rebels
This week featured two days of publication postings and interactive web meetings between some of the legal profession’s vanguard thinkers - legal rebels, if you will.
Following are the most interesting excerpts from some interesting pieces written by very prolific thinkers on the legal industry as well as personal contributors to our most recent book. First, is a quote from Larry Ribstein followed by some provocative thoughts by Bruce MacEwwn. In addition, an excerpt by Richard Susskinds, mainstay of change happening in the legal industry.
Larry Ribstein: Ethics Rules Are Spinning BigLaw Into ‘Death Spiral’
“Ethical rules governing lawyers are designed to maintain the illusion that law practice is something other than a business…. The forces dispelling this illusion include increased market pressures on clients to hold down costs, increased media attention on the law business enabling clients to peer into the formerly black box of law firms, heightened global competition in legal services, a robust outsourcing market, and the expanded role of in-house counsel.”
Bruce MacEwen: It’s Time to Abolish the Role of the State Bar
“As a card-carrying capitalist, I believe in the virtues of states competing amongst themselves to provide favorable business environments for purposes of their choosing. Delaware has famously done it for incorporating the Fortune 500, South Dakota for credit card processors, and Nevada for gaming companies (and, time was, divorcees).”
“Why not incite competition among states for law firm LLC/LLP incorporations? Let firms—and their individual practitioners—choose what jurisdiction they wish to be subject to. Perhaps New York or California, or Wyoming, would decide to grant its lawyers US-wide practice rights. Full faith and credit clause, anyone?”
“Does this call for abolishing the role of state bar associations? Precisely. Beyond the role of attempting to perpetuate outmoded notions of territorial guild societies, what is their role? (I told you this harked back to feudalism.)”
“Isn’t it time, in our BlackBerry/iPhone/WiFi/time zone-irrelevant world, to be able to choose where our firms are ‘incorporated’ and where we are ‘admitted to practice?’”
Richard Susskind: Disaster Ahead for Lawyers Unwilling to Change
“Invariably, general counsel tell me they are now under three pressures: to reduce the size of their in-house teams; to spend less on external law firms; and to find ways of coping with more and riskier legal and compliance work than in the past.”
“To achieve the efficiencies needed, I say that legal services will evolve from bespoke service at one end of a spectrum along a path, passing through the following stages: standardization, systematization, packaging, and commoditization. Many new ways of sourcing will emerge (outsourcing, off-shoring, sub-contracting, co-sourcing, and more) and these will often be combined in the conduct of individual pieces of legal work. I call this multi-sourcing.”
These ideas confirm the importance of being aware of how changes in the legal landscape impact your law firm or business and making appropriate adaptations to strengthen your position.
More background on the ABA series is available at Legal Rebels.
Following are the most interesting excerpts from some interesting pieces written by very prolific thinkers on the legal industry as well as personal contributors to our most recent book. First, is a quote from Larry Ribstein followed by some provocative thoughts by Bruce MacEwwn. In addition, an excerpt by Richard Susskinds, mainstay of change happening in the legal industry.
Larry Ribstein: Ethics Rules Are Spinning BigLaw Into ‘Death Spiral’
“Ethical rules governing lawyers are designed to maintain the illusion that law practice is something other than a business…. The forces dispelling this illusion include increased market pressures on clients to hold down costs, increased media attention on the law business enabling clients to peer into the formerly black box of law firms, heightened global competition in legal services, a robust outsourcing market, and the expanded role of in-house counsel.”
Bruce MacEwen: It’s Time to Abolish the Role of the State Bar
“As a card-carrying capitalist, I believe in the virtues of states competing amongst themselves to provide favorable business environments for purposes of their choosing. Delaware has famously done it for incorporating the Fortune 500, South Dakota for credit card processors, and Nevada for gaming companies (and, time was, divorcees).”
“Why not incite competition among states for law firm LLC/LLP incorporations? Let firms—and their individual practitioners—choose what jurisdiction they wish to be subject to. Perhaps New York or California, or Wyoming, would decide to grant its lawyers US-wide practice rights. Full faith and credit clause, anyone?”
“Does this call for abolishing the role of state bar associations? Precisely. Beyond the role of attempting to perpetuate outmoded notions of territorial guild societies, what is their role? (I told you this harked back to feudalism.)”
“Isn’t it time, in our BlackBerry/iPhone/WiFi/time zone-irrelevant world, to be able to choose where our firms are ‘incorporated’ and where we are ‘admitted to practice?’”
Richard Susskind: Disaster Ahead for Lawyers Unwilling to Change
“Invariably, general counsel tell me they are now under three pressures: to reduce the size of their in-house teams; to spend less on external law firms; and to find ways of coping with more and riskier legal and compliance work than in the past.”
“To achieve the efficiencies needed, I say that legal services will evolve from bespoke service at one end of a spectrum along a path, passing through the following stages: standardization, systematization, packaging, and commoditization. Many new ways of sourcing will emerge (outsourcing, off-shoring, sub-contracting, co-sourcing, and more) and these will often be combined in the conduct of individual pieces of legal work. I call this multi-sourcing.”
These ideas confirm the importance of being aware of how changes in the legal landscape impact your law firm or business and making appropriate adaptations to strengthen your position.
More background on the ABA series is available at Legal Rebels.
Wednesday, August 5, 2009
ABA Outsourcing One Year Aniversary
Today marks the first anniversary of the American Bar Association’s Standing Committee on Ethics and Professional Responsibility issuing of their Formal Opinion 08-451 Lawyerʼs Obligations When Outsourcing Legal and Nonlegal Support Services.
While we have not seen the tsunami flood of work sent offshore as some predicted, this past year has seen an increase of interest in and implementation of outsourcing. Firms may not be rushing to announce that they are outsourcing (particularly in a down market), but it is being done in increasing volumes. Outsourcing legal services is not part of the mainstream of common law practices yet, but it has gained considerable awareness and credibility in the legal community. Furthermore, we have noted great strides and increasing maturity of the vendors in the space, as well.
Due to quite a number of disruptive economic challenges and the proximity of core law firm functions, legal outsourcing is still in its early to mid-stages of development. Economics, client pressure, and changing dynamics in the legal industry will continue to drive outsourcing trends upward for this coming year and beyond.
While we have not seen the tsunami flood of work sent offshore as some predicted, this past year has seen an increase of interest in and implementation of outsourcing. Firms may not be rushing to announce that they are outsourcing (particularly in a down market), but it is being done in increasing volumes. Outsourcing legal services is not part of the mainstream of common law practices yet, but it has gained considerable awareness and credibility in the legal community. Furthermore, we have noted great strides and increasing maturity of the vendors in the space, as well.
Due to quite a number of disruptive economic challenges and the proximity of core law firm functions, legal outsourcing is still in its early to mid-stages of development. Economics, client pressure, and changing dynamics in the legal industry will continue to drive outsourcing trends upward for this coming year and beyond.
Monday, June 15, 2009
ABA 2009 Annual Meeting: Chicago
Mark your calendars. The American Bar Association (ABA) is holding its annual meeting in our very own Chicago this July 30th through August 4th. As usual, there will be a solid line-up of speakers, CLE courses, and vendor exhibitions along with plenty of “networking” events to go around.
To our out of town guests, please keep me apprised of your travel plans, as I would love host any of you during your stay in our lovely city.
For more information check out the ABA site (www.abanet.org/annual/2009) or contact ABA directly at abanet@xpressreg.net.
To our out of town guests, please keep me apprised of your travel plans, as I would love host any of you during your stay in our lovely city.
For more information check out the ABA site (www.abanet.org/annual/2009) or contact ABA directly at abanet@xpressreg.net.
Tuesday, June 2, 2009
Richard Susskind
Richard Susskind’s keynote address is now available on the ABA Tech show site: http://www.abanet.org/techshow/docs/2009/keynote.mp3
For those of you not familiar with Susskind, he is a noted visionary in legal services space and author of The End of Lawyers. As with all good messages, this one bears repeating.
One of the key points of his address that I particularly noted was that with the standardization of legal services, the client benefits in three ways. First, direct costs go down. Second, costs become much more predictable. Cost predictability is increasingly more important to clients. Finally, and most intriguing to me personally, the quality of services actually increase. The reason for this is that when certain services are standardized, many experts are brought together to pool their expertise leading to much more comprehensive solutions than would otherwise have been possible with a single lawyer.
Overall, the address is very thought provoking about the future of legal services and is definitely worth checking out.
For those of you not familiar with Susskind, he is a noted visionary in legal services space and author of The End of Lawyers. As with all good messages, this one bears repeating.
One of the key points of his address that I particularly noted was that with the standardization of legal services, the client benefits in three ways. First, direct costs go down. Second, costs become much more predictable. Cost predictability is increasingly more important to clients. Finally, and most intriguing to me personally, the quality of services actually increase. The reason for this is that when certain services are standardized, many experts are brought together to pool their expertise leading to much more comprehensive solutions than would otherwise have been possible with a single lawyer.
Overall, the address is very thought provoking about the future of legal services and is definitely worth checking out.
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