The recent dissolution of the major US law firm Howrey has many law firm partners scratching their heads. What happened? Despite the warning signs, how could this unwind so quickly? And most importantly, how can we keep this from happening to [insert law firm name here]?
In an interview with a Wall Street Journal reporter, Howrey, (now former) CEO Robert Ruyak, provided limited insights into what eventually became the demise of the prestigious DC-based firm. He specifically outlined the firm’s challenge to generate consistent revenue due to its precarious reliance on litigation work – particularly litigious matters based on alternative billing and contingency fees.
The final, and most interesting remark made by Ruyak, involved the growing significance of third-party specialists.
“Another challenge was the rise of third-party document-discovery specialists that could provide litigation support services at substantially lower rates, he said. Howrey, a law firm with many offices in big cities, and thus, higher costs and couldn’t compete, he added.”
Without jumping to too many conclusions, domestic and international legal outsourcing (LPO) seems to fit comfortably into this bucket of ‘third-party document-discovery specialists.’ So, how does this impact other similar law firms and what are they doing in response to the growing third-party vendor adoption?
The typical law firm response usually falls into a blend of the following responses:
1) Ignoring and distancing themselves from the matters carried out by outside vendors.
2) Embracing LPO in varying degrees (despite the fact that we haven’t heard any major LPO pronouncements by any major US law firms.)
3) Establishing “value options” through captive delivery centers in low cost jurisdictions domestically.
While LPO vendors based internationally typically bear the brunt of similar frustration expressed by Ruyak, the growing number of domestically-based shops such as Axiom Law seem to be gaining adoption to unprecedented degree.
Often, many law firms attempt to position themselves out of the lower-level “commodity” work performed by third-party vendors. For example, a recent article in Bar & Bench featured comments from, Glenn Gerstel, Managing Partner of the Washington DC office of Milbank, Tweed, Hadley & McCloy.
In the very same city where Howrey failed less than week before in part due to growing pressure from “third-party document-discovery specialists,” Gerstel said,
“I think LPO is certainly very efficient for certain kinds of legal practices. For Milbank, we have not engaged in it mostly because the kind of work we do tends to be very customized and specific, which is highly negotiated projects or cross border litigations where there are relatively few opportunities to cut cost efficiencies associated with outsourcing. There are other practices where it makes sense but for Milbank we have not found the opportunity.”
Granted, for a very high-end law practice such as Milbanks, perhaps this is true. But, the end-all test is whether clients continue buy this line of thinking – and the fee structure behind it. Based on the comments made by Howrey CEO Robert Ruyak, apparently clients weren’t buying this for Howrey. It’s doubtful that we’ve seen the last of major law firms attributing (publically or privately) lost revenues to third-party vendors.
***Disclaimer: There are certainly ways around this dilemma of all or none. We at Fronterion don’t subscribe to the belief that the relationship between law firms and outside vendors as a zero-sum relationship. In fact, from our experiences working with similar firms we see quite the opposite is the case. Firms should not dismiss the impact of new players in the ‘legal supply chain’ to the significant detriment of their practice (as seen by Howrey).
For more information on the growing onshore movement, email forefront@fronterion.com for the most recent copy of our monthly newsletter covering issues related to domestic legal outsourcing trends. A number of these trends are also included in our annual legal outsourcing trending report available here.
Showing posts with label LPO Vendors. Show all posts
Showing posts with label LPO Vendors. Show all posts
Thursday, March 24, 2011
Tuesday, March 22, 2011
Fronterion Newsletter Release: Is onshore the new offshore?
This month the focus of the Fronterion Forefront newsletter includes a number of recent developments in the onshore legal outsourcing segment. This includes third-party vendors expanding their domestic footprint or law firms establishing their own centers.
“When legal process outsourcing (LPO) exploded onto the scene a few years ago, its success was built on the efforts of hard-working attorneys in India, South Africa and the Philippines, who were willing to do the same tasks for less.
But LPO, just like the legal profession it serves, is evolving.
Now, those attorneys could just as well be in Ohio or Belfast, working in so-called ‘onshore’ outsourcing centers, which are low-cost but closer to clients and often run by law firms themselves rather than external providers.”
Given these developments, an interesting question is raised: What is the role of traditional LPOs if a growing segment of law firms adopt the best practices of the LPO industry and, thus, feel they are better positioned to establish their own centers domestically?
The newsletter provides some interesting commentary and quotes on this continuing debate. For more details on the growing onshore debate, email forefront@fronterion.com for the most recent copy.
In response, a number of LPO vendors are ramping up their onshore delivery capabilities. A visible growth trajectory of an onshore third-party LPO was recently released by UnitedLex. UnitexLex plans to triple its personnel ‘on-the-ground’ in the greater Kansas City area from 85 to approximately 250 over the next several years. This represents a growing proportion of domestic legal professionals part of the 650 UnitedLex employees based largely in Gurgaon, India.
A number of the trends on the topic of onshore and growing jurisdictional reach are also included in our annual legal outsourcing trending report available here.
“When legal process outsourcing (LPO) exploded onto the scene a few years ago, its success was built on the efforts of hard-working attorneys in India, South Africa and the Philippines, who were willing to do the same tasks for less.
But LPO, just like the legal profession it serves, is evolving.
Now, those attorneys could just as well be in Ohio or Belfast, working in so-called ‘onshore’ outsourcing centers, which are low-cost but closer to clients and often run by law firms themselves rather than external providers.”
Given these developments, an interesting question is raised: What is the role of traditional LPOs if a growing segment of law firms adopt the best practices of the LPO industry and, thus, feel they are better positioned to establish their own centers domestically?
The newsletter provides some interesting commentary and quotes on this continuing debate. For more details on the growing onshore debate, email forefront@fronterion.com for the most recent copy.
In response, a number of LPO vendors are ramping up their onshore delivery capabilities. A visible growth trajectory of an onshore third-party LPO was recently released by UnitedLex. UnitexLex plans to triple its personnel ‘on-the-ground’ in the greater Kansas City area from 85 to approximately 250 over the next several years. This represents a growing proportion of domestic legal professionals part of the 650 UnitedLex employees based largely in Gurgaon, India.
A number of the trends on the topic of onshore and growing jurisdictional reach are also included in our annual legal outsourcing trending report available here.
Monday, March 21, 2011
The Future of the Legal Profession: Georgetown Ground Zero
This earlier this month I had the pleasure of attending Georgetown’s annual conference. This year’s event, Welcome to the Future: Trends in the Delivery of Corporate Legal Services, was held on March 9th.
In a welcome change of pace, I didn’t have any formal speaking obligations so I was free to take notes and enjoy the range of very impressive speakers from major US law firms, in-house legal teams and innovative legal support vendors.
The conference centered on the trends impacting the future of the legal profession and included lively discussions and debates on key issues such as the relationship between law firms and in-house legal departments, characterizing and defining value, the impact of legal brands and innovation in the legal services supply chain.
The conference’s self-described focus follows: “There is much talk in the air of a revolution in the delivery of corporate legal services – but what’s actually happening on the ground? This intensive one-day conference is designed to provide concrete insights into how corporate legal departments and outside service providers can collaborate to provide valuable and cost-effective legal services.’
Some key takeaways for me included:
Six Sigma and Pixy Dust
Part of the long-standing debate is whether law firms will act more like LPOs or if LPOs will act more like law firms (also recently discussed on an ABA podcast here.
The conference featured a visible example of a law firm acting like LPO. On a very interesting panel, representatives from Seyfarth Shaw and Wolverine Worldwide outlined their approach to a more known productive relationship using enhanced productivity approaches. What is titled ‘Seyfarth Lean’ is the application of Six Sigma lean and Seyfarth “pixy dust.” While there are continuing challenges with adoption internally and issues with compensation systems, the application of Six Sigma is certainly a step toward ‘law firms acting like LPOs’
More details on this arrangement are available in a previous ACC post.
Legal Supply Chain
As firms continue to embrace multi-source, multi-shore legal outsourcing, the mocker “LPO” may take on a new form as the ‘legal supply chain.’ The legal supply chain concept embraces work that is delivered in the most cost effective manner from a variety of sources. (The overall ‘supply chain’ orchestrator is either the law firm or the in-house legal team.) In addition to traditional LPOs, the supply chain also incorporates the likes of Axiom whose founder Mark Harris also spoke on the ‘legal supply chain’ panel at the Georgetown event.
As the closing speaker for the ‘legal supply chain’ panel, Pangea3 Co-CEO David Perla spoke on various LPO topics including:
• The findings from a survey conducted by Thomson Reuters as they were exploring LPOs to acquire. The exercise surveyed why law firms and in-house legal departments worked with LPOs, (Hint: the primary reason was not cost.)
• The three components of quality (people, processes and technology) and how these specifically relate to LPO service delivery.
• How LPOs are not competitors with law firms because the overall pyramid of available legal work is always expanding due to the growing complexity of legal matters and an increasingly regulated business environment.
One of the interesting undertones of the Georgetown event was the dissolution of DC-based Howrey. Partners voted on dissolution Wednesday of Georgetown event. More details and implications on this shortly.
In a welcome change of pace, I didn’t have any formal speaking obligations so I was free to take notes and enjoy the range of very impressive speakers from major US law firms, in-house legal teams and innovative legal support vendors.
The conference centered on the trends impacting the future of the legal profession and included lively discussions and debates on key issues such as the relationship between law firms and in-house legal departments, characterizing and defining value, the impact of legal brands and innovation in the legal services supply chain.
The conference’s self-described focus follows: “There is much talk in the air of a revolution in the delivery of corporate legal services – but what’s actually happening on the ground? This intensive one-day conference is designed to provide concrete insights into how corporate legal departments and outside service providers can collaborate to provide valuable and cost-effective legal services.’
Some key takeaways for me included:
Six Sigma and Pixy Dust
Part of the long-standing debate is whether law firms will act more like LPOs or if LPOs will act more like law firms (also recently discussed on an ABA podcast here.
The conference featured a visible example of a law firm acting like LPO. On a very interesting panel, representatives from Seyfarth Shaw and Wolverine Worldwide outlined their approach to a more known productive relationship using enhanced productivity approaches. What is titled ‘Seyfarth Lean’ is the application of Six Sigma lean and Seyfarth “pixy dust.” While there are continuing challenges with adoption internally and issues with compensation systems, the application of Six Sigma is certainly a step toward ‘law firms acting like LPOs’
More details on this arrangement are available in a previous ACC post.
Legal Supply Chain
As firms continue to embrace multi-source, multi-shore legal outsourcing, the mocker “LPO” may take on a new form as the ‘legal supply chain.’ The legal supply chain concept embraces work that is delivered in the most cost effective manner from a variety of sources. (The overall ‘supply chain’ orchestrator is either the law firm or the in-house legal team.) In addition to traditional LPOs, the supply chain also incorporates the likes of Axiom whose founder Mark Harris also spoke on the ‘legal supply chain’ panel at the Georgetown event.
As the closing speaker for the ‘legal supply chain’ panel, Pangea3 Co-CEO David Perla spoke on various LPO topics including:
• The findings from a survey conducted by Thomson Reuters as they were exploring LPOs to acquire. The exercise surveyed why law firms and in-house legal departments worked with LPOs, (Hint: the primary reason was not cost.)
• The three components of quality (people, processes and technology) and how these specifically relate to LPO service delivery.
• How LPOs are not competitors with law firms because the overall pyramid of available legal work is always expanding due to the growing complexity of legal matters and an increasingly regulated business environment.
One of the interesting undertones of the Georgetown event was the dissolution of DC-based Howrey. Partners voted on dissolution Wednesday of Georgetown event. More details and implications on this shortly.
Thursday, February 24, 2011
Legal Outsourcing Summit – In Review…
This month, representatives and LPO enthusiasts gathers for IQPC’s inaugural LPO conference in New York City at the Sentry Club. The speaking faculty included representatives from top AM Law firms and multi-nationals such as Microsoft, Pfizer, Nokia, Milbank Tweed, Hinshaw Culbertson, and Mayer Brown, among others.
I had the privilege of chairing the event which included three days of workshops, speakers and interactive sessions.
Highlights from the event included hearing about personal experiences, presentations of case studies and lively discussions by the sophisticated delegation of conference attendees.
Key takeaways from the conference included:
* The importance of taking an active role as the buyer, including the selection, supervision, and management of an outside vendor.
* Shifting work to an outside LPO vendor does not absolve the firm from responsibility for the work and work product.
* Firms are seeking to address similar issues, but are using differing approaches to LPO. Variations includes onshore vs. offshore delivery, captive vs. third-party vendors, the range of outsourced service areas and divergent management approaches.
* Onshore LPO delivery was a reoccurring theme.
We see this conference emerging as a cornerstone event for the industry. Stay tuned for any details on upcoming events.
For more information on this year’s Legal Outsourcing Summit event click here.
I had the privilege of chairing the event which included three days of workshops, speakers and interactive sessions.
Highlights from the event included hearing about personal experiences, presentations of case studies and lively discussions by the sophisticated delegation of conference attendees.
Key takeaways from the conference included:
* The importance of taking an active role as the buyer, including the selection, supervision, and management of an outside vendor.
* Shifting work to an outside LPO vendor does not absolve the firm from responsibility for the work and work product.
* Firms are seeking to address similar issues, but are using differing approaches to LPO. Variations includes onshore vs. offshore delivery, captive vs. third-party vendors, the range of outsourced service areas and divergent management approaches.
* Onshore LPO delivery was a reoccurring theme.
We see this conference emerging as a cornerstone event for the industry. Stay tuned for any details on upcoming events.
For more information on this year’s Legal Outsourcing Summit event click here.
Monday, January 31, 2011
LPO Predictions for the New... Decade
While many commentators make projections for the coming year (Fronterion included), some are taking a more expansive approach and are forecasting into the next decade.
In a recent post at Law Without Borders, fellow LPO blogger Russell Smith projects a number of ways that legal offshoring will impact (or “shake up”) the legal profession in the next 10 years. His 12 predictions, and my summary of each, are:
1. Meritocracy Beats Aristocracy - Legal service delivery is becoming more value-driven.
2. Change is Happening in the East as Much as in the West - The legal landscape is changing in India.
3. The New Tort Reform - LPO may constitute a more cost-effective defense than settlement.
4. Capital Funding of Litigation - LPO is a good value proposition for third-party investors in litigation funding.
5. The Billable Hour Bites the Dust - Alternative billing models are turning the legal world upside down.
6. Unintended Effects of Regulatory Reform - New regulatory compliance obligations call for LPO solutions.
7. "Legal Trauma Units" Level the Playing Field – Offshoring levels the playing field for small law firms.
8. Offshore Beats Nearshore – Billing rates and operating costs are considerably lower in India.
9. The Death of the "They're Taking our Jobs" Myth – Offshoring actually creates new jobs in the West.
10. More Proliferation Than Consolidation – Offshore legal service providers are growing in number.
11. Western Lawyers Switch to Football – Through LPO, Western lawyers can move up the value chain to act as quarterbacks or team coaches.
12. The Future May Belong to the "Just Crazy Enough" – LPO entrepreneurs pave the way for new innovations.
View "12 Ways Offshore Legal Outsourcing Could Shake Up the Law World in the New Decade" for the full report.
We largely agree with Smith’s predictions, a number of which are already occurring the marketplace. Just think, 10 years ago we were just sorting out the use and ethical implications of e-mail.
In regard to Smith’s 9th prediction, “The Death of the ‘They’re Taking Our Jobs Myth,’” I was quoted with my comments on the job impact of international sourcing initiatives:
Smith makes some insightful forecasts regarding LPO in the next decade. I agree with his statement that this coming decade is one in which the legal world might be turned upside down and that “offshore legal outsourcing is likely to continue to be among the leaders of the law revolution.”
In a recent post at Law Without Borders, fellow LPO blogger Russell Smith projects a number of ways that legal offshoring will impact (or “shake up”) the legal profession in the next 10 years. His 12 predictions, and my summary of each, are:
1. Meritocracy Beats Aristocracy - Legal service delivery is becoming more value-driven.
2. Change is Happening in the East as Much as in the West - The legal landscape is changing in India.
3. The New Tort Reform - LPO may constitute a more cost-effective defense than settlement.
4. Capital Funding of Litigation - LPO is a good value proposition for third-party investors in litigation funding.
5. The Billable Hour Bites the Dust - Alternative billing models are turning the legal world upside down.
6. Unintended Effects of Regulatory Reform - New regulatory compliance obligations call for LPO solutions.
7. "Legal Trauma Units" Level the Playing Field – Offshoring levels the playing field for small law firms.
8. Offshore Beats Nearshore – Billing rates and operating costs are considerably lower in India.
9. The Death of the "They're Taking our Jobs" Myth – Offshoring actually creates new jobs in the West.
10. More Proliferation Than Consolidation – Offshore legal service providers are growing in number.
11. Western Lawyers Switch to Football – Through LPO, Western lawyers can move up the value chain to act as quarterbacks or team coaches.
12. The Future May Belong to the "Just Crazy Enough" – LPO entrepreneurs pave the way for new innovations.
View "12 Ways Offshore Legal Outsourcing Could Shake Up the Law World in the New Decade" for the full report.
We largely agree with Smith’s predictions, a number of which are already occurring the marketplace. Just think, 10 years ago we were just sorting out the use and ethical implications of e-mail.
In regard to Smith’s 9th prediction, “The Death of the ‘They’re Taking Our Jobs Myth,’” I was quoted with my comments on the job impact of international sourcing initiatives:
Are the projected 5000 new jobs in the LPO industry directly correlated to a 5000 job “shift” (read lost, redundant, right-sized, etc.) at top US law firms? Is it economically sound reasoning to assume that economic interactions are tit-for-tat? In short, no.
Does the increase of LPO mean that there may be marginally less demand for legal support staff for certain low-value service areas? Perhaps. Alternatively, doesn’t allowing firms to offer new services so clients can economically litigate and conduct transactions also increase the demand for the services of law firms, and thus the demand for lawyers? Absolutely.
Smith makes some insightful forecasts regarding LPO in the next decade. I agree with his statement that this coming decade is one in which the legal world might be turned upside down and that “offshore legal outsourcing is likely to continue to be among the leaders of the law revolution.”
Tuesday, January 11, 2011
Launch of Boutique Law Practice is Based on LPO Value Proposition
In a recent ABA podcast, I spoke on the melding of law firms and LPOs:
“Going forward I think it’s always a fair question of, are we going to see law firms acting like LPO’s or are we going to see LPO’s acting like law firms? And one of the trends… in the past 6 to 8 months is that we’ve seen a lot more law firms acting like LPO’s than LPO’s acting like law firms.” In this podcast, I predicted that we will also see some interesting melding between law firms and LPOs in the UK in the coming year with the implementation of Legal Services Act. My comments in the podcast start at 3:29 and 11:50.
In the New Year, we are already seeing signs of new LPO innovations and law firm/LPO melding. An example of such LPO innovation is the new technology, outsourcing and commercial law boutique launched by a group of partners from Barlow Lyde & Gilbert, Latham & Watkins and Morrison & Foerster. This new firm, known as Radiant.law, will work with legal outsourcer Pangea3 on certain transactions yet will be responsible for managing the deal as a whole, according to a report in Legal Week. Instead of charging clients an hourly rate, the firm aims to offer price certainty by charging fixed prices for work in advance.
This endeavor is big news. This new boutique is the first of its kind to offer a value-proposition centered around LPO. As an industry, we are still exploring the relationship dynamics between law firms, corporations, and LPOs and this is big first step for a law firm taking on this much LPO involvement.
We will see more new and innovative enterprises cropping up this year, particularly in the UK. We’ve also seen additional law firm-LPO melding with the recent onshore outsourcing announcement by Herbert Smith.
“Going forward I think it’s always a fair question of, are we going to see law firms acting like LPO’s or are we going to see LPO’s acting like law firms? And one of the trends… in the past 6 to 8 months is that we’ve seen a lot more law firms acting like LPO’s than LPO’s acting like law firms.” In this podcast, I predicted that we will also see some interesting melding between law firms and LPOs in the UK in the coming year with the implementation of Legal Services Act. My comments in the podcast start at 3:29 and 11:50.
In the New Year, we are already seeing signs of new LPO innovations and law firm/LPO melding. An example of such LPO innovation is the new technology, outsourcing and commercial law boutique launched by a group of partners from Barlow Lyde & Gilbert, Latham & Watkins and Morrison & Foerster. This new firm, known as Radiant.law, will work with legal outsourcer Pangea3 on certain transactions yet will be responsible for managing the deal as a whole, according to a report in Legal Week. Instead of charging clients an hourly rate, the firm aims to offer price certainty by charging fixed prices for work in advance.
This endeavor is big news. This new boutique is the first of its kind to offer a value-proposition centered around LPO. As an industry, we are still exploring the relationship dynamics between law firms, corporations, and LPOs and this is big first step for a law firm taking on this much LPO involvement.
We will see more new and innovative enterprises cropping up this year, particularly in the UK. We’ve also seen additional law firm-LPO melding with the recent onshore outsourcing announcement by Herbert Smith.
Friday, January 7, 2011
LPO Gains Momentum
Happy New Year! 2010 brought many changes to the LPO industry including new deals, new markets and onshore expansion. Undoubtedly, 2011 will bring more changes as LPO continues to gain momentum across the globe. In fact, the growth of LPO has garnered much attention in the media lately.
A recent article in the Chicago Tribune analyzes how the recession has spurred the growth of legal process outsourcing and alternatives to traditional legal services. Thomson Reuters’ acquisition of LPO giant Pangea3 and Axiom Global’s purchase of LawyerLink are recent testaments to “how alternatives to the traditional law firm are becoming increasingly attractive to buyers of sophisticated legal services in the post-financial-meltdown era.”
While alternatives to law firms are nothing new, business models that embrace legal process outsourcing have gained momentum in the wake of the recession by introducing innovative ways to reduce the costs of many legal tasks.
A story in The Economist also acknowledges the growth of legal outsourcing, noting that LPO is expanding at perhaps 20-30% a year, “for the simple reason that legal costs are out of control.” Given that large law firms’ hourly rates rose more than 65% between 1998 and 2009, it’s no wonder that firms are embracing outsourcing as a means to lower costs and increase efficiency.
Outsourcing will affect American legal firms the most, because U.S. law firms cost the most, according to The Economist, and the time-intensive process of discovery further drives up legal fees.
What do the lawyers think of the growth of LPO? “Some lawyers think outsourcing will be a blessing, taking away the drudgery and leaving them free to hone their higher skills,” the article reports. “Others are nervous. Machines will never replace the brightest American legal minds, but there is no reason why Indians cannot do some of their work. The sharpest firms will survive. So will mass-market law firms, which will make use of outsourcing. But the profession as a whole could be in for a squeeze.”
Only time will tell if legal process outsourcing will be a blessing or a challenge for U.S. lawyers. But, regardless of the lawyers’ plight, in 2011 we will continue to see unprecedented growth in the industry.
A recent article in the Chicago Tribune analyzes how the recession has spurred the growth of legal process outsourcing and alternatives to traditional legal services. Thomson Reuters’ acquisition of LPO giant Pangea3 and Axiom Global’s purchase of LawyerLink are recent testaments to “how alternatives to the traditional law firm are becoming increasingly attractive to buyers of sophisticated legal services in the post-financial-meltdown era.”
While alternatives to law firms are nothing new, business models that embrace legal process outsourcing have gained momentum in the wake of the recession by introducing innovative ways to reduce the costs of many legal tasks.
A story in The Economist also acknowledges the growth of legal outsourcing, noting that LPO is expanding at perhaps 20-30% a year, “for the simple reason that legal costs are out of control.” Given that large law firms’ hourly rates rose more than 65% between 1998 and 2009, it’s no wonder that firms are embracing outsourcing as a means to lower costs and increase efficiency.
Outsourcing will affect American legal firms the most, because U.S. law firms cost the most, according to The Economist, and the time-intensive process of discovery further drives up legal fees.
What do the lawyers think of the growth of LPO? “Some lawyers think outsourcing will be a blessing, taking away the drudgery and leaving them free to hone their higher skills,” the article reports. “Others are nervous. Machines will never replace the brightest American legal minds, but there is no reason why Indians cannot do some of their work. The sharpest firms will survive. So will mass-market law firms, which will make use of outsourcing. But the profession as a whole could be in for a squeeze.”
Only time will tell if legal process outsourcing will be a blessing or a challenge for U.S. lawyers. But, regardless of the lawyers’ plight, in 2011 we will continue to see unprecedented growth in the industry.
Monday, December 20, 2010
Tis the Season… For Industry Trending
While most choose to celebrate the Christmas holiday in more traditional ways, the LPO industry brings an abundance of holiday cheer via industry surveys.
Not to be outdone, last week we released our annual trending report: Ten for 2011: Top 10 Trends in Legal Outsourcing in 2011. Featured by the ABA Journal - Legal Outsourcing Consultant Predicts More Onshoring - the complete report is available here.
Now on to the cornucopia of industry surveys this month…
1. The European Lawyer: Outsourcing Survey
November and December issue of The European Lawyer features a study of general counsel on their use of legal outsourcing. If you can get your hands on a copy, it’s certainly worth a read. Statistics include how many general counsel currently outsource, which services they use and the jurisdictions in which they feel most comfortable using.
2. State of the Indian LPO Sector
As previously noted on the blog, an Indian outsourcing firm set out to conduct a survey of the Indian LPO sector. After collating the responses from 19 outsourcing firms, the results are out. The full report is available by contacting Ravi Shankar at IndianLPOSurvey@gmail.com
3. The LPO Program
The LPO Program, a UK-based information firm released survey findings projecting growth of LPO in the coming year. According to a recently conducted study, “The main users of LPO continue to be Corporate Law Departments, who are forecasted to add $129m of spending in 2011. Law firms are shaking off traditional caution and are fuelling 41% of the projected growth. On these forecasts, it is expected that at least 9 high profile deals will be announced by law firms in the next 12 months.”
4. ValueNotes: 2010 To 2011 – Changes in the LPO Industry
ValueNotes released a broad overview of industry trends and happenings from the past year – including large deals, outsourcing geographies and the events impacting India as a primary destination for outsourced legal services.
Not to be outdone, last week we released our annual trending report: Ten for 2011: Top 10 Trends in Legal Outsourcing in 2011. Featured by the ABA Journal - Legal Outsourcing Consultant Predicts More Onshoring - the complete report is available here.
Now on to the cornucopia of industry surveys this month…
1. The European Lawyer: Outsourcing Survey
November and December issue of The European Lawyer features a study of general counsel on their use of legal outsourcing. If you can get your hands on a copy, it’s certainly worth a read. Statistics include how many general counsel currently outsource, which services they use and the jurisdictions in which they feel most comfortable using.
2. State of the Indian LPO Sector
As previously noted on the blog, an Indian outsourcing firm set out to conduct a survey of the Indian LPO sector. After collating the responses from 19 outsourcing firms, the results are out. The full report is available by contacting Ravi Shankar at IndianLPOSurvey@gmail.com
3. The LPO Program
The LPO Program, a UK-based information firm released survey findings projecting growth of LPO in the coming year. According to a recently conducted study, “The main users of LPO continue to be Corporate Law Departments, who are forecasted to add $129m of spending in 2011. Law firms are shaking off traditional caution and are fuelling 41% of the projected growth. On these forecasts, it is expected that at least 9 high profile deals will be announced by law firms in the next 12 months.”
4. ValueNotes: 2010 To 2011 – Changes in the LPO Industry
ValueNotes released a broad overview of industry trends and happenings from the past year – including large deals, outsourcing geographies and the events impacting India as a primary destination for outsourced legal services.
Wednesday, December 15, 2010
Top 10 for 2011 – Annual Trending Release
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/
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/
Friday, November 26, 2010
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
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
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.
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.
Sunday, November 14, 2010
News Round-Up
Check out these interesting bits of LPO news from this past week.
Obama
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.
Obama
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…
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…
Wednesday, May 26, 2010
Tempered Outlook Turns Into Upswing?
In the Business Standard, the article Legal Process Outsourcing on Firm Footing highlights some of the increased activity in the Indian legal outsourcing sector. After several years of chimera-like growth in Indian LPO markets, work capacity never truly lived up to expectations. Recently tempered, the market is now poised for growth and the current outlook appears to be more closely aligned with the state of the industry.
Further, the multi-shore and onshore components of legal outsourcing noted in the article directly parallel the observations made in the Fronterion 2010 Global Sourcing Study. As reported in the Global Sourcing Study, approximately 8% of delivery personnel for the top 17 LPO firms are based in the UK and 10%, on average, are based in the US.
According to the study: Some 75 per cent of outsourcing vendor executives surveyed by Fronterion said at least some of their clients had expressed an interest in onshore delivery, while 24 per cent of vendor respondents reported a significant number of their clients were interested in onshore delivery. A further 82 per cent of outsourcers said their clients were interested in hybrid solutions – a combination of onshore and offshore outsourcing – with over 41 per cent of outsourcers reporting a significant interest in the hybrid-shore delivery model.
For more information, Legal process outsourcing on firm footing is available online.
Further, the multi-shore and onshore components of legal outsourcing noted in the article directly parallel the observations made in the Fronterion 2010 Global Sourcing Study. As reported in the Global Sourcing Study, approximately 8% of delivery personnel for the top 17 LPO firms are based in the UK and 10%, on average, are based in the US.
According to the study: Some 75 per cent of outsourcing vendor executives surveyed by Fronterion said at least some of their clients had expressed an interest in onshore delivery, while 24 per cent of vendor respondents reported a significant number of their clients were interested in onshore delivery. A further 82 per cent of outsourcers said their clients were interested in hybrid solutions – a combination of onshore and offshore outsourcing – with over 41 per cent of outsourcers reporting a significant interest in the hybrid-shore delivery model.
For more information, Legal process outsourcing on firm footing is available online.
Monday, April 19, 2010
Two’s Company, Three’s a Crowd
The last several weeks, we’ve seen a number of press releases regarding the vendor relationships with the software giant Microsoft.
The announcement-spree was kicked off with a release by CPA Global reporting that Microsoft is currently employing a “team of between three and five qualified lawyers at CPA [that] are handling multi-jurisdictional legal support work, including legal research… in CPA's offices in Gurgaon.” This was the second major public release by CPA after the Rio Tinto engagement in June 2009.
Coming quickly on the heels of the CPA release was a separate release from Integreon. The details of the release reported Integreon to be the “exclusive provider of offshore managed document review” on behalf of Microsoft. This was one of the first major corporate engagements publically announced by Integreon.
The contract management portion of the Integreon-Microsoft engagement is reported to be handled primarily by Intgreon’s onshore delivery facilities in Fargo, North Dakota with “eight full-time contract specialists.” This is reflective of the importance of onshore-offshore engagement structures for legal outsourcing engagements as reported in the recently released Fronterion 2010 Global Sourcing Study and also featured in The Lawyer.
While not a legal service engagement, the third and most recent vendor announcement came from Infosys. It is reported that Infosys is servicing Microsoft to “manage internal IT services for Microsoft worldwide” including “IT help desk, desk-side services, and infrastructure and application support from multiple global centers.”
Who knows who will be next in the Microsoft vendor release bonanza?
The announcement-spree was kicked off with a release by CPA Global reporting that Microsoft is currently employing a “team of between three and five qualified lawyers at CPA [that] are handling multi-jurisdictional legal support work, including legal research… in CPA's offices in Gurgaon.” This was the second major public release by CPA after the Rio Tinto engagement in June 2009.
Coming quickly on the heels of the CPA release was a separate release from Integreon. The details of the release reported Integreon to be the “exclusive provider of offshore managed document review” on behalf of Microsoft. This was one of the first major corporate engagements publically announced by Integreon.
The contract management portion of the Integreon-Microsoft engagement is reported to be handled primarily by Intgreon’s onshore delivery facilities in Fargo, North Dakota with “eight full-time contract specialists.” This is reflective of the importance of onshore-offshore engagement structures for legal outsourcing engagements as reported in the recently released Fronterion 2010 Global Sourcing Study and also featured in The Lawyer.
While not a legal service engagement, the third and most recent vendor announcement came from Infosys. It is reported that Infosys is servicing Microsoft to “manage internal IT services for Microsoft worldwide” including “IT help desk, desk-side services, and infrastructure and application support from multiple global centers.”
Who knows who will be next in the Microsoft vendor release bonanza?
Friday, September 25, 2009
Worst Is Over According to PWC
While some heralded the recent economic challenges in the US and UK as a basis for growth in the legal outsourcing industry, the actual outcome has been less than expected. Many vendors in growth positions have not been immune from challenging economic times, either.
When litigation and transactional work dries up, domestic legal firms work to keep their own staff busy before using an outside vendor either domestically or abroad. General counsel who have the same or even increased legal requirements in economically challenging times are often forced to delay or forgo legal services due to internal capacity and budget restraints. While client pressure on their legal counsel can have a positive impact on outsourcing, many times firms don’t even have time to consider augmenting their staff with an outside vendor during arduous periods.
What is often lost is that what is good for domestic US and UK legal professionals is also good for legal outsourcing industry. And vice versa.
A well-structured legal outsourcing engagement helps firms proactively manage risks previously uneconomical to pursue. It helps firms direct and allocate internal resources and provides better support to internal personnel. In short, legal outsourcing is not a zero-sum game. This is true for both the buyers and providers of outsourced legal services.
Recent economic volatility has highlighted many benefits of working with outside vendors. In addition to cost savings, outsourcing enables firms to manage variability better, improve client servicing, and initiate transformational change without expenditures among others. Current increased client cost sensitivity is another positive outcome in favor of outsourced legal services.
As organizations see a pick-up in their work dockets and more stable financial conditions (as noted by PWC), law firms and corporate counsels are now able to focus on more proactive organizational initiatives such as a new or expanded outsourcing engagement to better support their staff. We are looking forward to it as well now that the worst is behind us.
When litigation and transactional work dries up, domestic legal firms work to keep their own staff busy before using an outside vendor either domestically or abroad. General counsel who have the same or even increased legal requirements in economically challenging times are often forced to delay or forgo legal services due to internal capacity and budget restraints. While client pressure on their legal counsel can have a positive impact on outsourcing, many times firms don’t even have time to consider augmenting their staff with an outside vendor during arduous periods.
What is often lost is that what is good for domestic US and UK legal professionals is also good for legal outsourcing industry. And vice versa.
A well-structured legal outsourcing engagement helps firms proactively manage risks previously uneconomical to pursue. It helps firms direct and allocate internal resources and provides better support to internal personnel. In short, legal outsourcing is not a zero-sum game. This is true for both the buyers and providers of outsourced legal services.
Recent economic volatility has highlighted many benefits of working with outside vendors. In addition to cost savings, outsourcing enables firms to manage variability better, improve client servicing, and initiate transformational change without expenditures among others. Current increased client cost sensitivity is another positive outcome in favor of outsourced legal services.
As organizations see a pick-up in their work dockets and more stable financial conditions (as noted by PWC), law firms and corporate counsels are now able to focus on more proactive organizational initiatives such as a new or expanded outsourcing engagement to better support their staff. We are looking forward to it as well now that the worst is behind us.
Wednesday, August 19, 2009
Who Will Dominate Offshoring in 2020?
While reading through the interesting article in BusinessWeek - Who Will Dominate Offshoring in 2020?, written by Noshir Kaka, director at McKinsey based out of Mumbai, one point caught my attention in particular.
India graduates three million students every year, while the entire outsourced service industry employs 2.1 million in total. Therefore, India is effectively utilizing only 10 percent of their available workforce. Room for expansion is huge.
Kaka also discusses difficulties in the education system as well as language barriers, which are concerns for potential service buyers in more effectively utilizing this vast talent pool.
In our experience, we have seen the same trends with the legal outsourcing industry in India. We hear the often-quoted statistic that India produces approximately 80,000 legal graduates every year. But across the board, vendors typically recount the difficulties of recruiting qualified staff. In higher-level service areas such as legal outsourcing, based on our experience with a number of Indian LPO vendors, we see a significantly lower utilization rate for law graduates than the 10 percent noted by Kaka.
For the legal outsourcing industry to continue on its current growth trajectory, an increase in the supply side of the labor equation will be critical.
India graduates three million students every year, while the entire outsourced service industry employs 2.1 million in total. Therefore, India is effectively utilizing only 10 percent of their available workforce. Room for expansion is huge.
Kaka also discusses difficulties in the education system as well as language barriers, which are concerns for potential service buyers in more effectively utilizing this vast talent pool.
In our experience, we have seen the same trends with the legal outsourcing industry in India. We hear the often-quoted statistic that India produces approximately 80,000 legal graduates every year. But across the board, vendors typically recount the difficulties of recruiting qualified staff. In higher-level service areas such as legal outsourcing, based on our experience with a number of Indian LPO vendors, we see a significantly lower utilization rate for law graduates than the 10 percent noted by Kaka.
For the legal outsourcing industry to continue on its current growth trajectory, an increase in the supply side of the labor equation will be critical.
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