Tuesday, January 19, 2010
Legal process outsourcing facing a ‘watershed’ year
Fronterion’s trending release Ten For 2010 gained further recognition this week in a piece in the Law Society Gazette, Legal process outsourcing facing a ‘watershed’ year. While India remains the unequivocal leader in outsourced legal services industry, the article notes the growing interest in South Africa, particularly by firms in the UK.
Sunday, January 10, 2010
Technology Applications
Outsourced legal services is not the only innovation in the legal profession helping legal firms and corporate councils manage the cost of legal services. A recent article featured in the Wall Street Journal notes that, technology and software platforms are being adopted at increasing rates to help lower costs, as well.
As noted in the foreword of the book Implementing a Successful Legal Outsourcing Engagement, Bruce MacEwen writes in regard to the adoption outsourced legal services, “I may disappoint you to report that what I believe is far more parochial: the adoption of outsourcing will be firm by firm, activity by activity, year by year. Like much of the march of progress, change will be less drastic in the short run than many imagine, and more revolutionary in the long run than most can foresee.”
The same is true of the adoption of innovative technology applications, as noted in the article. Innovative outsourcing solutions will happen in concert with technology developments. Often changes begin slowly at first, but expand into a number of exciting possibilities as they mature.
Links between these innovative technology platforms and outsourcing include improved monitoring and collaboration with remotely based outside vendors. With increasing transparency, general counsel will have greater capacity to monitor the productivity of their outside counsel and thus, their outside legal spend.
As noted in the foreword of the book Implementing a Successful Legal Outsourcing Engagement, Bruce MacEwen writes in regard to the adoption outsourced legal services, “I may disappoint you to report that what I believe is far more parochial: the adoption of outsourcing will be firm by firm, activity by activity, year by year. Like much of the march of progress, change will be less drastic in the short run than many imagine, and more revolutionary in the long run than most can foresee.”
The same is true of the adoption of innovative technology applications, as noted in the article. Innovative outsourcing solutions will happen in concert with technology developments. Often changes begin slowly at first, but expand into a number of exciting possibilities as they mature.
Links between these innovative technology platforms and outsourcing include improved monitoring and collaboration with remotely based outside vendors. With increasing transparency, general counsel will have greater capacity to monitor the productivity of their outside counsel and thus, their outside legal spend.
Monday, January 4, 2010
Challenges in 2010 for UK firms and others
For many, the new year means a new start. But that is not the case for some major law firms who are still slogging through flagging legal markets. As noted in a recent article featured in The Lawyer, many lawyers still seem to be holding their breath watching uncertain markets in the coming year. The article does point to the impact on outsourced legal services, particularly in the UK legal segment, which is expected to change fairly significantly in the coming year in anticipation of the implementation of the Legal Services Act.
Developments likely to have an impact on the market over the next 12 months include the expansion of the legal process outsourcing (LPO) market, changes in fee models and the impact of the Legal Services Act.
Efficiency has quickly become the watchword for those with their hands on the purse strings at major firms. Whether this means changes to outsourcing policy, client charging or further rounds of redundancies remains to be seen.
Despite the concerns expressed in this piece, many of the firms that we have talked with remain positive on the new year.
Developments likely to have an impact on the market over the next 12 months include the expansion of the legal process outsourcing (LPO) market, changes in fee models and the impact of the Legal Services Act.
Efficiency has quickly become the watchword for those with their hands on the purse strings at major firms. Whether this means changes to outsourcing policy, client charging or further rounds of redundancies remains to be seen.
Despite the concerns expressed in this piece, many of the firms that we have talked with remain positive on the new year.
Thursday, December 24, 2009
Holiday Wishes
We would like to wish all of our readers a happy holiday season and a prosperous new year. Thank you for your contributions to this blog and the support you’ve given lposouce.com in the past year.
Wednesday, December 23, 2009
Temerity in the Face of Turbulence
In a recent newsletter Andrew Hedley, founder of the UK legal strategy consultancy Hedley Consulting, discusses changes set to impact the legal market in the UK (US legal firms are also facing similar pressures). One of the core changes, emanating from the cost pressure on law firms, will be in the law firm structure with the most apposite change being the “significant acceleration in the use of legal process outsourcing for increasingly complex work.”
Hedley’ piece is posted in full below.
"The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic."
-Peter Drucker
The legal sector faces a number of unprecedented challenges in the year ahead. The one with potential to disrupt most widely and deeply is a wholesale move to fixed-fee pricing. Surveys of in-house counsel show that they are resolute in demanding fundamental change over the next twelve months.
Delivering profit from fixed-fee work requires wholesale changes to historic operating models and has far reaching implications.
One inevitable consequence will be the demise of associate lockstep, the process by which salary (and hourly rate) increases are pegged to years of qualification rather than any objective measure of increased ability to add value for the client. Another will be a significant acceleration in the use of legal process outsourcing for increasingly complex work.
An emphasis on better management skills will also be necessary as firms disaggregate the legal process, undertake individual work components at the lowest price point and then reassemble the “legal product” at its point of delivery to the client.
The effect on firm culture, talent management and the psychological contract between partner and associate will be hugely significant. However, these are nettles which must be grasped to emerge from the recession with businesses that are viable in the longer term.
Simply hoping that one can hold out long enough for better times to return is not a strategy. Temerity in the face of turbulence is unlikely to deliver the desired result!
Hedley’ piece is posted in full below.
"The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic."
-Peter Drucker
The legal sector faces a number of unprecedented challenges in the year ahead. The one with potential to disrupt most widely and deeply is a wholesale move to fixed-fee pricing. Surveys of in-house counsel show that they are resolute in demanding fundamental change over the next twelve months.
Delivering profit from fixed-fee work requires wholesale changes to historic operating models and has far reaching implications.
One inevitable consequence will be the demise of associate lockstep, the process by which salary (and hourly rate) increases are pegged to years of qualification rather than any objective measure of increased ability to add value for the client. Another will be a significant acceleration in the use of legal process outsourcing for increasingly complex work.
An emphasis on better management skills will also be necessary as firms disaggregate the legal process, undertake individual work components at the lowest price point and then reassemble the “legal product” at its point of delivery to the client.
The effect on firm culture, talent management and the psychological contract between partner and associate will be hugely significant. However, these are nettles which must be grasped to emerge from the recession with businesses that are viable in the longer term.
Simply hoping that one can hold out long enough for better times to return is not a strategy. Temerity in the face of turbulence is unlikely to deliver the desired result!
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