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.

Wealth of Flexibility

When facing uncertain times, traditional wisdom says to put your money into hard assets. (Note that gold continues to peak over $900+ this week). But when organizations are facing uncertain times their best asset is flexibility.

Across the legal industry we have seen a number of firms making “FTE adjustments” while recently some firms are actually hiring (albeit small) numbers of lawyers and support staff. (It helps when you have a client portfolio.) A major challenge in a fluctuating economy is the variability of the workflows and uncertain levels of litigation moving through the pipeline.

For firms facing these challenges, the "gold” is being able to take on work as it comes, but not retain large fixed costs to do so. Flexibility has long been a great strategic consideration when outsourcing to an onshore vendor (staffing firms) or offshore vendors (legal outsourcing firms).

As we continue to see how the economic situation shakes out, flexibility is the name of the game. The lean and highly-effective practices will benefit the most as the economy picks up steam.