A Tweet earlier this week asks “Weekly LPO articles in the UK?” which, extended from its native (and necessarily abbreviated) Tweet-speak, means “Are we seeing at least one article a week about legal process outsourcing in the UK?”
The question was triggered by an article in Legal Week headed Pass it on which looks at the growth of interest in outsourcing. What is being passed on (thus giving the article its title) is some part of a legal process which cannot be done cost-effectively by the law firm with conduct of the matter or by the client directly. The article covers more than the litigation work which is the main focus of my interest. It also embraces more than sending the work beyond the seas, pointing out (as I have more than once) that the principles of outsourcing apply to any task which can be done more cost-effectively (which may also mean “more cheaply”) in other hands; those hands may be round the corner, at least when compared with Mumbai.
The article focuses, as one might expect, on matters of security and quality. It leads, however, with observations on “how little focus there has been on clients’ comfort with their external counsel outsourcing their work”. The latter point is not fully developed in an article whose primary sources are the bigger firms – those who use the established players in the outsource market or who set up their own facilities. Those interviewed for the article have clearly made substantial investments in training and in establishing a supervisory framework within which their outsource operations work. The client quotations in the article emphasise the client view that the law firm continues to take responsibility for the work – one would have thought that this is too obvious to be stated, and particularly in respect of the firms which are discussed.
Jonathan Kelly of Simmons & Simmons, which has recently started outsourcing work to Mumbai with Integreon, is clear both as to the benefits to clients and as to the need to involve them in the discussion. Mark Surguy of Pinsent Masons, whose outsourcing to South Africa with Fronterion was amongst the first to draw attention to this area in the UK, was similarly forthright about the benefits at a recent conference. Those benefits, he stressed, were reaped by the firm as well as by the clients – the scheme was already showing positive benefits for both.
The most interesting thing about the article, from my point of view, are the references at the end to regional outsourcing, that is, to passing part of the work to the firms in Birmingham, Manchester or Leeds whose cost-base is much lower. I have referred to this in most of my articles on outsourcing without, I have to say, any evidence that anyone is actually doing it – it just seemed a sensible compromise for city firms whose hourly rates preclude cost-effective handling of routine work, who baulk at sending work far afield, but whose costs are disproportionate to the work’s value to the clients if done at City rates.
There is a potential here for regional firms, and it comes at two levels. There is an opportunity to compete with the international outsource market by offering to support the litigation work of bigger firms (and possibly the clients direct) by providing a UK-based document review service at lower rates. This could be attractive to London firms who can win big ticket work on the basis of their skills and experience but cannot provide the basic components of the service at a rate which simultaneously brings them a profit and is attractive to their clients.
These smaller firms might go one further step and offer broader e-Disclosure services to other firms. They could become skilled in the whole business of e-Disclosure, from the rules through to the technology, particularly if they joined forces with a provider of litigation software and / or services. This, properly structured, needs no great investment in anything other than skills and relationships. Although akin in some ways to the large conveyancing operations which came so badly unstuck at the beginning of the recession, what I envisage here does not involve large premises, capital outlay or the recruitment of armies of permanent staff.
In this context you may care to look at yesterday’s article in the Orange Rag headed Top 10 outsourcing predictions for 2010 which reports on Fronterion’s predictions for the outsourcing market. Like Charles Christian, I do not necessarily accept all of the predictions as applicable to the UK, but the one which caught my eye was number 9, summarised as “Talent development and migration”. Christian says (quoting the report itself) that “as legal outsourcing vendors gain prominence in 2010, they will have much greater access to talent as more lawyers consider outsourcing as a genuine career path”.
“Genuine” in this context means, I think, rather more than that lots of lawyers have been laid off and will do anything for a job. The report talks of “an attractive alternative career path [with outsourcing vendors] for entrepreneurial and global-minded legal professionals as pay, positions and prestige increase” and of “increased training opportunities”. I expressed puzzlement, even before the recession, that UK law firms were not making more use of their former staff who, having taken a career break to have children, were willing and able to be involved in litigation projects (whether from home or in the office) without necessarily having the responsibility and time commitment required to be the lead lawyer on them. That pool of talent appeared to me to be neglected, possibly because firms have been slow to realise that web-based document review systems can be accessed from anywhere.
That force has been supplemented with those (not necessarily with a litigation background) whose services have not been required in the recession, and by those who have had enough of the high-pressure existence of a private practice lawyer. It seems likely that firms who offer the kind of services referred to above could find able people who would relish a role in such a venture. This does not necessarily have to involve large teams of drudges sitting for weeks on end in airless rooms as is common in the US. Sure, productivity must be measured, but Fronterion’s reference to a “genuine career path” implies a less mechanical and more thoughtful approach to electronic disclosure.
From the point of view of the bigger firms and their clients, the key element is a process. The word is off-putting perhaps. All I mean is that firms need to know what they would do if a large new case was offered to them tomorrow. There is still some litigation where it is enough to deploy your existing resources of partner, associates and paralegals to do the work in the way you always have done it. If that seemed a viable option three months ago, it no longer looks so attractive to clients when the legal press is full of articles about firms thinking through alternative ways of tackling the problems in a way which preserves profitability whilst being attractive to clients – both existing clients and those who might be won from less forward-thinking firms.
The article makes clear that outsourcing involves more than just bunging all your documents at one of the hundreds of Indian vendors who clutter your InBox with offers of services whose quality you cannot measure. It requires either an arrangement with a specialist such as Integreon or Fronterion or an arrangement of your own which is carefully researched and heavily policed. The latter may be with an international supplier of services but it might equally be with a regional UK firm which can offer the primary components of the service at a rate lower than yours. As I have said before, the only mistake is not to consider any of it.