Australian: Different Flushes, Same Legal Pressures

While the debate over ethical issues arising from the use of domestic and international legal outsourcing continues to mature, recent statements by an Australian justice suggest that a growing number of jurisdictions are taking on LPO ethical issues as adoption increases.

Despite flip-flopped seasons and toilets flushing in opposite directions, it appears Australian legal professionals are subject to some of the same pressures as their US and UK counterparts.

Recently, Chief Justice of New South Wales Jim Spigelman issued some provocative comments. He said, “Those responsible for purchasing legal services in commercial corporations are subject to pressure to reduce costs, in the same way as those responsible for any other cost centre… Outsourcing through the use of Indian-based support services, such as digital dictation transcription and document management for discovery and due diligence, is an available way of containing such costs… However, overseas legal services are not limited to administrative matters of this kind."

The expansion of LPO adoption beyond US and UK clientele is something we projected in our annual trending report – Ten for 2011: Top Ten Trends for Legal Outsourcing.

#4 Expanding Client Geographic/Jurisdictional Reach
In 2011, LPO services will be increasingly adopted in expanded areas domestically within the US and UK, as well as international destinations… Buyers of LPO services are likely to expand into other geographic destinations around the world such as Australia, South Africa and major business hubs in the Asia-Pacific region.

More details on the free report here.

The Australian markets are a growing area of focus lately with lots of movement in the industry. Firms Down Under continue seeking to address the changing needs of their international clients. Major UK firms like Clifford Chance and Norton Rose jockeying for an Australian partner. Advent continues to take strides forward as a leading LPO-integrated law firm. And fallout from the Rio Tinto deal, which seems so long ago, continues. Add the mix the recent comments made by Chief Justice Spigleman, and it’s no surprise perspectives are changing in the world below.

For additional details on the continuing LPO ethics debate and regulatory updates, check out our online resource; www.LPOethics.com

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.

A&O Transfers Support Roles to Belfast

Allen & Overy (A&O) ­announced last week that it is transferring 180 support roles to Belfast, Ireland. A&O will initially transfer 18 members of support staff to Belfast to deliver IT, HR, finance, business services and library functions from a single site, The Lawyer reports, and the legal services center will take on some routine legal work. As many as 250 support roles could be based in the city by 2014, with total headcount including fee-earners potentially reaching 300.

The implications of A&O’s onshoring initiative are still being sorted out, particularly in light of Herbert Smith’s announcement of a Belfast-based captive center last year. Due to the growing interest in onshore legal outsourcing, we are planning to feature this topic in our newsletter this month. Be sure to sign up for our newsletter by e-mailing forefront@fronterion.com.

Thomson Reuters-Pangea3 Deal Raises Competitive Pressure

There’s no doubt that legal process outsourcing is changing the delivery of legal services. Thomson Reuter’s acquisition of Pangea3 last November has further fueled the LPO discussion and sparked debate among industry experts about the ethical implications of Thomson delving into competition with its client base, especially since Pangea3 plans to open more offices in the U.S.

In a recent article in the ABA Journal, several industry commentators, including myself, point out that the Thompson-Pangea3 deal has raised the competitive pressure for law firms both large and small. Innovative law firms will adjust their market approach and leverage LPO as a cost-effective way to accomplish repetitive and process-based work.

The full ramifications of Thompson Reuters backing an LPO will become clearer throughout the year. However, as clients grow more reluctant to pay top fees for commoditized, repeatable work, law firms must evaluate whether forming LPO partnerships will help them deliver services more efficiently.

Stay on Top of LPO Regulation in 2011

After flying under the radar for several years, legal process outsourcing (LPO) has finally caught the attention of regulators around the globe. In the three main LPO markets – the United States, the United Kingdom and India – there is the potential for rule changes which could place outsourcing agreements under increased scrutiny or even have a material impact on the ability of law firms and companies to send legal work to external providers.

For example, Connecticut has introduced a bill designed to prevent law firms and corporations from offshoring the drafting, reviewing and analyzing of legal documents to workers overseas. Under the bill, proposed by Connecticut state representative Patricia Dillon, "unlicensed'' offshore workers who engage in these activities for clients in Connecticut could be charged with unauthorized practice of law. If the bill is passed, there is the risk that other US states may pass similar laws.

Fronterion’s January newsletter focuses on the changing regulatory landscape for legal outsourcing in 2011. To keep up to date on the changing ethical and regulatory environment in the coming year, sign up for our newsletter by emailing forefront@fronterion.com, visit the LPO Ethics Resource Center, and review our most recent press release.

Also, to learn more about legal outsourcing strategies, be sure to register for this new LPO conference scheduled for February 14-16, 2011 at The Sentry Center in New York, NY.