Integreon

by John Croft, President, Global Sales and Marketing, Integreon

On Tuesday I attended Centaur’s legal process outsourcing (LPO) conference, hosted by The Lawyer. Panelists from both law firms and in-house counsel made for a well-balanced discussion. Most noticeable was an underlying change in tone from debates at prior LPO conferences. Whether a result of the economic climate, the unbundling of legal services, or clear directives such as the one by Rio Tinto’s Managing Attorney Leah Cooper – it is now clear that no longer was anyone talking about ‘if’ but ‘when’.

Ms. Cooper led the charge against law firms, challenging their reasons for using the same old model – junior associates at £300 an hour – for repetitive aspects of legal work,  for which she now refuses to pay. What does she propose instead? Unbundling and re-distributing legal work among her in-house team, her outside counsel and an LPO provider. “The trick to doing this well”, she said, was “we all have to do our bit and work together.”

Whilst this idea might have shocked the market just six months ago, the conference saw well-considered and pro-active responses by some big UK law firms who are heeding her call.

Lovells partner Neil Mirchandani explained that his firm had been working in a three-way relationship with their corporate client and Integreon for nearly three years. Lovells previously created what we can now view as an early-stage LPO: their ‘Mexican Wave’ outsourced legal work to lower cost domestic law firms starting in 1999.

Allen & Overy shared that Integreon is now their preferred LPO partner and they use this LPO offering as part of a “suite of options” that they offer clients. Unlike Simmons & Simmons, which has a dedicated team at Integreon for LPO work (see our press release), A&O has chosen to deal with Integreon on a project-by-project basis. This approach provides the benefits of scalability when needed and no overhead when not.

Add these firms’ names to the likes of Slaughter & May and Pinsent, which have both publicly stated that they are working with LPO providers, and it is clear that the message is not only being heard – but acted upon.

At the same time that firms are moving from talk to action, the LPO competitive landscape is shifting. According to conference speaker Arun Jethmalani, CEO of analyst firm ValueNotes, 140 companies claim to provide LPO services. He says, however, that the reality over the last year  is that only a couple have emerged as the dominant players. Many smaller players have pulled out of the market or simply disappeared. ValueNotes reports that the important attributes of the dominant players include scalability; global footprint; referenceable clients (i.e. they actually do LPO on some scale!); and the ability to forward invest in technology, strong Western domain management, and onshore offices near the client.

Jethmalani compared LPO today with business process outsourcing (BPO) 20 years ago. Back then, there were hundreds of companies that claimed to operate in that space but today there is only a handful of dominant, global players. Now that law firms are joining the in-house counsel in discussing not ‘if’, but ‘when’, expect to see similar growth for a couple of LPO providers and a significant change in the way legal services are unbundled and delivered.